Engineering Inc. - May/June 2008 - 5

Some people believe Terra sells its professional liability (PL) insurance products only to geotechnical, environmental, and construction-materials engineering and testing firms. CIVIL ENGINEERING FIRMS. TRUTH: About 25% of the fees generated by Terra’s insureds are for civil engineering services. Some of our insureds perform civil engineering almost exclusively. Others perform it in conjunction with environmental and/or geotechnical engineering. Terra wants to insure more firms that provide civil engineering, alone or in conjunction with other disciplines. Terra’s not huge (our insureds will tell you that’s a major asset), but that hasn’t stopped us from becoming North American engineering’s second-oldest PL insurance provider. TRUTH: Terra has been providing PL insurance since 1969. Terra was the nation’s first PL company to offer environmental coverage to its insureds. Terra is a risk-retention group, meaning the insureds (and only the insureds) own the company. And it’s a good one! According to A.M. Best Company – the internationally recognized insurancecompany rating organization – Terra is “the highest-rated risk-retention group in the United States.” TRUTH: Best has given Terra a stated rating of “A, Excellent” and an implied rating of “A++, Superior.” And Terra’s score on A.M. Best’s “Capital Adequacy Ratio Tests” is one of the highest of all insurers (not just PL insurers!) doing business in the United States. Because Terra is a risk-retention group, Terra gives all its profits to its owner/ ( A Dv E RT I S E M E N T ) TERRA INSURES insureds (on a tax-deferred, capitalgains basis). While past performance may not be an indicator of future performance, it’s worth noting that Terra’s stock value has achieved a new-record high for 79 consecutive calendar quarters; i.e., every quarter since the company became a risk-retention group in 1988. TRUTH: Those who bought stock at $10 a share in 1988 can now redeem it for more than $240 a share. Subtract their capital gain from what they’ve paid for their PL insurance since 1988, and their net cost is $0. Or, in some cases, a negative (which in that case is something to be very positive about). Terra has been so profitable because it’s well managed and because its owner/ insureds are well managed, too. TRUTH: By applying unique risk-management programs developed and/or underwritten by Terra, Terra owner/insureds experience a phenomenally low claim frequency; on average, about one claim per $28 million in revenue they generate per year. And that’s all claims, about half of which are closed at no cost to our owner/insureds. Terra provides a variety of prospectively rated and retro plans to firms that bill from $500,000 to more than $100 million per year. If your civil engineering firm is in that category and you’re ready for a rewardingly different approach to PL insurance, visit Terra’s website, e-mail, or call.

Engineering Inc. - May/June 2008

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