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Museum Case Study

This museum has been a national landmark in their community for over 40 years. Due to a recent spike in visitor growth and public attention, the museum's president decided it was time to review the risk management program to ensure they were properly protected as their exposures flourished and evolved.

They had been in the same broker relationship for over 15+ years and felt a high sense of loyalty due to quality customer service and responsiveness. Sovereign was one of four competing brokers invited into the review process, which uncovered coverage areas that were both deficient in limit and altogether missing in other key areas. Due to their size and scope, the museum's board was simply unable to ignore the errors in protection despite years of satisfactory customer service. They decided that Sovereign offered a program that most efficiently achieved their risk management objectives while doing so at the most competitive price of all the competing brokers.

17%

Total Rate Reduction

$25M

Protection for Liquor Liability Exposure

$20M

Increase in Board Protection

Problems Identified
  • Deductibles: in effort to offset premium increases, the previous broker raised deductibles beyond average levels
  • Property Valuation: museum building was underinsured by 32% without the Agreed Value Endorsement, leaving it highly susceptible to coinsurance penalties at the time of a covered property loss
  • Unique Risk Exposure: client had high risk exposure uncovered by prior insurance program. Risk to assets and reputation for uncovered claim was significant.
  • Board Protection: benchmarking analysis yielded low levels of protection versus other institutions of similar size & scope of operations.
Solutions Provided
  • Lowered Deductibles: reduced deductibles by over 50% to match those in their peer group
  • Broadened Property Protection: adjusted building values to adequate levels while adding the Agreed Value Endorsement, effectively suspending the coinsurance penalty at time of a covered property loss 
  • Liquor Liability: client hosted events where alcohol was provided served by museum staff. Since the furnishing/distributing of alcohol was excluded from Host Liquor liability, we added Liquor Liability.
  • Board Protection: provided $25M of protection for board members & administrators