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SUMMER 2012

BIG I The

Official Publication of the Independent Insurance Agents of Virginia

Virginia

Nettie Ardler, CPIW, DAE, AIAM Insurance Account Executive aardler@iiav.com Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134 Teresa Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com Sherry Grubbs, AISM Chief Financial Officer sgrubbs@iiav.com Joe Hudgins, CPCU Vice President of Education & Technical Affairs jhudgins@iiav.com cell (804) 929-4138 Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com Melanie Kjar Communications/Website Director mkjar@iiav.com Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133 Danny Mitchell Vice President Business Development dmitchell@iiav.com cell (804) 929-4135 Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com Kristina Preisner IIAV Education Marketing Coordinator & VAIA Executive Director kpreisner@iiav.com Lori R. Reed, CISR, CPIA Insurance Account Executive lreed@iiav.com Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 James West Director of Finance jwest@iiav.com

THE BIG “I” VIRGINIA • Summer 2012

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA 23294 Phone: 804.747.9300 / Toll-free: 800.288.IIAV (4428) Fax: 804.747.6557 / E-mail: members@iiav.com Website: www.iiav.com

Inside this issue

IIAV STAFF

IIAV is an organization devoted to promoting, enhancing, serving and assisting independent insurance agents.

6 Message from the Chairman of the Board - John O. Watson 8 Message from the State National Director - James P. Bradner 10 Message from the President and CEO - Bob Bradshaw 12 Project CAP - The Difference Between Marketing and Dominating 20 What is Trusted Choice®? 22 Project CAP - Get the Point 26 Emerging Products for 2012 31 Cyber Liability - One of the Fastest Growing Concerns of Business Today 32 Where to Find It - A Resource Guide to Trusted Choice® Benefits 34 Learned Lessons - Cases with Happy Endings 38 New Swiss Re Corporate Solutions for Insurance Agents 39 2012 IIAV Convention 40 Big “I” Insurance Agents Umbrella Program 41 Health Proponent - Medical Coverage for IIAV 42 Care to Share? How Joining a Car or Bike Share Program Could Impact Your Business 44 Sales Versus Customer Service - Natural Conflicts in the Marketplace 46 Benefits of Living the Trusted Choice® Brand

IIAV extends our appreciation to the following sponsors of this publication: Allstar Financial Group

JMWilson 45

AmTrust NA

Jackson Sumner & Associates

Astonish Results

Johnson & Johnson

Atlantic Specialty Lines

2 24, 25

Keystone Insurers Group

Builders Mutual Insurance

Millers Mutual Group

Burns & Wilcox

Penn National Insurance

Delta Dental

Preferred Property Program

Eastern Insurance Holdings

RPS Rollins

FCCI Insurance Group

SIAA 28

GNY Insurance Cos.

TAPCO Underwriters

GUARD Insurance Group

The Iroquois Group

Harford Mutual

Utica National Insurance Group

Indiana Lumbermens Mutual Ins. Co.

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For information on advertising please contact: Jim Aitkins, Blue Water Publishers, LLC / 22727 161st Ave SE, Monroe, WA 98272 phone: 360.805.6474 / fax: 360.805.6475 / jima@bluewaterpublishers.com

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly by Blue Water Publishers, LLC. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers.

Strong Agencies Made Stronger

For 35 years Iroquois has helped make strong, independent agencies even stronger and more independent. And it shows.

TEAMWORK As a group, Iroquois Member Agents have earned the following honors from our Carrier Partners: ACE Private Risk Services Chubb Personal Insurance Encompass Fireman’s Fund The Hartford MSA Group MetLife Auto & Home Ohio Casualty Safeco Travelers Zurich Small Business

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Summer 2012 • THE BIG “I” VIRGINIA

Chairman of the Board John O. Watson john@hanckelcitizens.com

s it really coming to an end? My tenure as chairman of IIAV that is; the year has flown by so quickly. I can’t believe this will be my last article for this publication.

It has been a true honor to serve as chairman this year. I would like to thank all of those who made my job so easy, from the Executive committee to the Board of Directors, the truly dedicated staff and the President and CEO Bob Bradshaw. Not to mention the number of members volunteering on various committees. Thank you each and every one. One of the advantages of being chairman is being involved with the staff of our Association. We are truly blessed with talented and dedicated people working for the membership. I don’t know how many hours Joe Hudgins and Bob Bradshaw put into the creation of IIAV’s Certificate Bill. The legislation, now law, should assist all agents with an age old problem with certificates. I would encourage all members to sign up for the certificate webinar when available, which explains the law in depth. The Young Agents program is yet another area of our association that is extremely dedicated and hard working. Kristina Preisner, from the IIAV staff, has been tireless in her efforts to organize and support the Young Agents. As I have said before, we owe it to ourselves to encourage and support our Young Agents’ involvement in IIAV. Yes, they do have a good time. Didn’t we? But those involved are professional, hard working, and dedicated members of our association. Tommy Via will be taking the reins come June. I have been teaching him how to play the harmonica for the convention at the beach this year! Seriously, I have no doubt that Tommy will lead us well into 2012/13. I would like to thank all the members who have helped me along the way, and there have been many. I consider myself to be extremely fortunate to have been able to serve the Association in this capacity. I look forward to continuing my service in the future.

THE BIG “I” VIRGINIA • Summer 2012

people

From the friendly voices of our customer service staff to the personal visits by our territory managers and underwriters to the promptness of our claims adjusters, we are told time and again …

Our people set us apart. That’s just one of the reasons we’ve been ranked among the top 10 carriers in ease of doing business. Business • Surety • Auto • Home

www.PennNationalInsurance.com Visit our website to find out more. Summer 2012 • THE BIG “I” VIRGINIA

State National Director James P. Bradner

jbradner@towneinsurance.com

Two New Resources for IIAV Agencies & Carriers

n January 2012, Project CAP introduced a new Industry Website that provides independent agencies with all of the digital marketing tools, training, systems, and services they need to build their brands and enhance their online presence. From introductory self-instruction to advanced professional services, each element is integrated with the next to develop agency marketing strategies that dominate local online markets while reinforcing national brand values. These programs also prepare participating agencies to manage prospect relationships that will be generated through the new Consumer Portal. All Project CAP agency marketing programs include automatic enrollment in the new Consumer Portal – and the basic Bronze package is available to IIABA member agencies at no additional charge. For more information regarding these programs, please click the icon on the home page or visit www. projectcapmarketing.com. Scheduled for launch in mid-2012, the Project CAP Consumer Portal will address the insurance customer’s collective desire for knowledge, choice, and comprehensive service. While some other online options may also offer consumer research and rate

THE BIG “I” VIRGINIA • Summer 2012

comparisons, none present the unique combination of benefits that will be available here. Aside from the ability to evaluate dozens of insurance companies, the opportunity to select an independent agent who will advocate on their behalf is an advantage most consumers will find irresistible. Every agency participating in the new Consumer Portal will receive an online profile visible to all visitors to showcase your key producers and all the benefits they provide. Whether consumers choose to request an online quote or not, they’ll always have the option of reaching out to your agency for assistance in determining or completing the right coverage. To help ensure effective conversion, all agencies participating in the portal are automatically enrolled in the introductory Bronze marketing program, and prospects generated through the portal will be delivered and managed through each agency’s Project CAP dashboard. Of course, basic participation in these integrated programs is available to IIABA member agencies at no additional charge. For complete details on these and all other Project CAP initiatives, please visit www.projectcapmarketing.com.

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President and CEO Bob Bradshaw rbradshaw@iiav.com

The Internet. Because that’s where the money is! Independent agents – taking personal lines back.

eryone’s heard it before. When Willie Sutton was asked why he robbed banks, it is said that he replied, “because that’s where the money is.” Over the course of his career – he did pretty well, collecting over $2 million in his illgotten-gains and in the 1950’s, that wasn’t petty cash. So let me ask you, if qualified market research shows that over 75% of the consumers looking for auto/home insurance first start their research on the Internet, why we should accept that the Internet is the purview of the direct writers? Actually, name me one company that is NOT trying to hedge their bets with market access through the Internet? And why shouldn’t they? I was speaking with a company president a year to two ago who had just completed an agency meeting. He told everyone in the meeting that if the agency did not have at least a website in the coming year, then the company would have no choice but to pull the agency agreement. The president told me that he was approached by an agency principal following the meeting who said that they should take their agency agreement then, as they had no intention of doing a website. So let me ask this question. If you’re trying to sell your agency and a prospective buyer asks about your web presence, which agency has the most value? • Agency A) Has no web presence but has a lot of loyal customers. • Agency B) Not only has a web presence, but a completely interactive social media presence that complements each of their busy producers. Seriously, which has the most future value? Which agency would YOU invest your money in? I’ve made it no secret that I’m not particularly web savvy and completely don’t understand social media. In fact, at this very moment I’m organizing a “Facebook 101” session for my association counterparts who also don’t understand Facebook. This is one New Year’s 10

THE BIG “I” VIRGINIA • Summer 2012

Resolution that I intend to keep. If I am to remain relevant….if IIAV is to remain relevant to the future leaders of our industry and profession, then we sure as heck need to understand the power of the Internet and that of Social Media. Our national association is taking a leadership role in this area with Project CAP – Consumer Access Portal. This project capitalizes on the market presence of over 22,000 agency members, over 160 licensed producers and 27,000 local offices across America. No direct writer has anything close to this market presence and if we can aggregate just a sample of this membership market presence on the Internet….guess who’s going to come up first when you search for “insurance, Richmond” in Google? Project CAP is NOT a “lead generator”. It is a “buyer” generator! This IIABA program takes our agencies to where the buyers are so you get a contact from someone who has done their research and now wants to purchase their insurance from you and you alone. Moreover, Project CAP is designed for the novice agency who has limited or minimal web presence, or the advanced agency with an active web presence. The entire program is predicated on exploiting the market presence of independent insurance agencies across the country and in this Commonwealth. With half the year left to go, it’s not too late to make your resolution for 2012 to get your agency actively on the Internet with a fully functional income generator instead of a static brochure ware page. Both IIABA and IIAV have contacts with those who can assist you in getting your agency a dynamic web presence, so the next call you receive is from someone who has done their research and found your agency and is ready to buy insurance from you. No doubt they “have a few more questions”, and now need to speak to a professional.

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Summer 2012 • THE BIG “I” VIRGINIA

The Difference Between Marketing and

DOMINATING

f you just want a new website and a few tips on tweeting, there are plenty of organizations that will take your money. But Project CAP isn’t one of them. However, if you want comprehensive online marketing strategies and tactics that actually expand your visibility and dominate your market – then we’re the only one. Because Project CAP isn’t just an Internet company that decided to get into the insurance business. We’re experienced insurance professionals with real digital marketing expertise. Our team has been delivering solutions on behalf of the independent insurance agency system for 20 years. After building, growing and selling a successful insurance software business, we spent years learning how to maximize Internet principles to revolutionize insurance marketing. And the more we learned, the more we realized how these strategies and tactics could change the game for independent insurance agents. Project CAP Programs Include:  Consumer Portal  Trusted Choice® Mobile App  Self-Directed Agency Marketing Programs  Full-Service Agency Marketing Programs  Local Results Optimization Services Project CAP Consumer Portal Scheduled for launch in mid-2012, the Project CAP Consumer Portal will address the insurance customer demand for knowledge, choice, and comprehensive service. While some other online options may also offer consumer research and rate comparisons, none present the unique combination of benefits that will be available here. Aside from the ability to evaluate dozens of insurance companies, the opportunity to select an 12

THE BIG “I” VIRGINIA • Summer 2012

independent agent who will advocate on their behalf is an advantage most consumers will find irresistible. Every agency participating in the new Consumer Portal will receive a comprehensive online profile that showcases your key features and all the benefits you provide. Whether consumers choose to request an online quote or not, they’ll always have the option of reaching out to your agency for assistance in determining or completing the right coverage. Although initial online quoting services will focus on personal auto insurance, information regarding homeowners and other personal lines will be presented. And agencies receiving prospect referrals through the Portal will be able to discuss and address these other needs offline. To help ensure effective conversion, all Portal prospects will be delivered and managed through each participating agency’s Project CAP dashboard. Perhaps best of all, basic participation in the Consumer Portal is free to members with a nominal fee for each agency prospect received. Enrollment in the Portal also includes free enrollment in our Bronze Agency Marketing Program and discounted rates for the new Trusted Choice® Mobile App. Project CAP Consumer Portal  Free Participation for IIABA Agencies  Nominal Per-Prospect Fee  Includes Free Bronze Agency Marketing Package  Add New Mobile App for Just $20/Month Trusted Choice® Mobile App Created through collaboration of Trusted Choice®, the IIABA and Project CAP, our new mobile app is a powerful tool for reaching and serving today’s online

ExpErtisE you can lEvEragE. , it s that simplE.

A simple machine like the lever redirects and multiplies the force applied to it â&#x20AC;&#x201C; making a job easier. Builders Mutual has been taking that same approach to construction insurance since 1984, simplifying and streamlining whenever and wherever possible. Agent tools like BOB 2.0 allow you to issue and service policies online with ease. When youâ&#x20AC;&#x2122;re quoting construction-related accounts, the insurance choice is simple.

consumers – wherever they are. Designed to work on iOS and Android platforms (with Blackberry versions planned for Spring 2012), this amazing resource allows consumers to find a local Trusted Choice® agent, create their home inventory, document an accident, ask a question and read relevant headlines – all from their smartphone, tablet or other mobile device. Since real marketing is all about building relationships that build your brand, this app is available in a customized format with your agency’s color scheme and logo. It’s also integrated with both Project CAP and IIABA online systems to provide single sign-on and easy account administration. So don’t wait another minute to start leveraging this timely technology. The new Trusted Choice® Mobile App is included in most Project CAP agency marketing packages (for a limited time) or available separately for a nominal fee to IIABA member agencies. Trusted Choice® Mobile App  Works on iOS and Android Platforms  Blackberry Edition planned for Spring 2012  Customized for Each Agency  Free with Most Agency Marketing Programs  Free with QuickStart Plus Package  Just $20/Month with Bronze-Portal Program  Stand-Alone Service for $50/Month March to 1,000! With hundreds of agency digital marketing programs already claimed, Project CAP anticipates hitting the 1,000 mark in March. In fact, we’re planning on it! To celebrate this milestone, we’ll be giving away a free iPad 4G LTE through a random drawing among all participating agencies. Yes, even those that have signed up for the free Bronze program. In other words, there’s no purchase necessary, but agencies must be enrolled in at least one Project CAP program to be eligible. So, if your agency still hasn’t signed up, do it now. Already enrolled? Thank you. Now, spread the word about the March to 1,000 -- and keep an eye on our Facebook page for updates. If we hit our goal, you could hit the jackpot! Agency Marketing Programs Developed with the endorsement of the IIABA, Project CAP’s graduated medal agency programs deliver a level of digital marketing services, products and proficiency you simply can’t get anywhere else.

THE BIG “I” VIRGINIA • Summer 2012

Four Pillars. One Result. What makes Project CAP agency digital marketing programs different? For one thing, every program we produce is built on the four pillars of Education, Tools, Content and Services. So, whether you choose to do it yourself with our basic Bronze package or have us do it all for you through our ultimate Diamond program, the results are always the same: More Internet prospects. More insurance leads. More agency growth. Just as with the Consumer Portal, basic participation in our Agency Marketing Packages is free to members of the IIABA. Medal Level Marketing Programs  Bronze, Silver & Gold Do-It-Yourself  Platinum & Diamond Full-Service  Education  Tools  Content  Services Insurance Marketing Education Education and training are the foundation of every Project CAP agency marketing program. Regardless of your previous experience, we offer a full curriculum of digital marketing courses on a broad array of topics and tactics that meet you where you are right now and take you where you want to be. Most programs also employ a multi-media approach to ensure information and ideas are presented in a format that matches the way you really like to learn.       

Video Courses PowerPoint Presentations Webinars Audio Downloads Workbooks White Papers Instruction Sheets

Insurance Marketing Tools Project CAP agency marketing programs go far beyond simple technology to include a full complement of tools chosen or developed specifically to meet the needs of today’s digital agent. We begin by helping you design a solid sales and marketing plan – then provide all the resources you need to construct your program with ease. From email opt-on widgets to blog-posting templates, Project CAP shares a variety of attention-grabbing, prospect-attracting, time-saving tools. Best of all, we help

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Summer 2012 • THE BIG “I” VIRGINIA

you measure your efforts and results to ensure you’re on the right track to digital marketing success.  Dashboards  Templates  Widgets  Directories Insurance Marketing Content Tools and technology are critical in attracting the attention of new prospects, but what do you say once you have it? Project CAP Agency Digital Marketing has the answer. In fact, we have thousands of them. Don’t know what to post on your Facebook page? We do. Not sure how to start that client email? We are. Thanks to the insurance content specialists at Project CAP, you’ll never be at a loss for words again.  Copy Templates  Posting Libraries  Thought Starters  Image Banks  Email Designs  Reference Materials Insurance Marketing Services Even if you never graduate beyond our basic agency package, you’re sure to receive the kind of service you’d be proud to provide your own clients. Our digital marketing experts really shine when you take advantage of our Platinum and Diamond service programs. In addition to designing and developing your new agency website, blogsite, social media pages and email marketing programs, the Project CAP team can also create and execute your content applications, search marketing, blog postings, social media messages, paid media campaigns – and more. All so you can concentrate on writing more business.  Websites  Blogsites & Postings  Local Results Optimization  Link Marketing  Social Media Pages & Postings  Paid Media Ads  Email Marketing  Analytics Agency Marketing Dashboard It’s common knowledge that you can’t manage what you can’t measure. So, your Project CAP agency dashboard is more than just the access point for your marketing tools and training. It’s also the control panel for your digital marketing and client management systems. Whether you choose to participate in the Consumer Portal or not, 16

THE BIG “I” VIRGINIA • Summer 2012

your agency dashboard is designed to deliver all the data you need to effectively measure, manage and maximize your marketing efforts. Just point, click and prosper. At a glance, you’ll be able to assess:  Which tactics are working and which aren’t  Which channels are creating the most activity  Where your best prospects are coming from  How your activities measure up against your plan  Much more The Most Powerful Marketing Programs Online If you already have all the business you can handle, these programs aren’t for you. They’re for agencies serious about getting online and getting more response. They’re for independent agents ready to adopt new ideas and absorb new information. They’re for independent-minded professionals eager to leverage their expertise and take back their fair share of the market. If that sounds like you, then we want to share the insurance marketing strategies, insights, tactics and techniques Project CAP has invested thousands of hours collecting and perfecting. They’re revolutionizing the way leading insurance agencies grow their business - and they’ll work for you. No matter who you are, where you are or how much time you have, Project CAP has an agency marketing program that can help you generate more Internet prospects and more agency revenue. But you must act now. These programs are available exclusively to IIABA agency members, and pricing may change soon. Bonus! Sign up for a Silver, Gold, Platinum or Diamond program and we’ll include access to our new “Super Agent’s Guide to Facebook Success” webinar – featuring ideas and information you can start applying immediately. But don’t wait. This offer is limited to the first 50 new clients.

Consumer Portal Participation Project CAP Consumer Portal This incredible new website will present your agency profile to consumers nationwide and encourage insurance prospects in your market to contact you - before or after receiving your comparative quote. Exclusive prospects will be provided for a nominal fee and processed through each agency’s free Project CAP dashboard. Enrollment in the Consumer Portal also includes automatic enrollment in the Bronze agency marketing package and entitles participating agencies to discounted rates on the Trusted Choice® Mobile App.

Their businesses are as different as the tools they use. Insure them accordingly with AmTrust. Think AmTrust for all your small business insurance needs. We offer workers’ compensation and commercial package products in a variety of classifications, including specialty niche segments such as: Fine Dining | Lumber Specialty | Auto Service Plus | Businessowners Policies

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Your Success is Our Policy. SM Summer 2012 • THE BIG “I” VIRGINIA

Member Pricing $0 Down / $0 Month (Portal Only)

Add $20/Month (Portal + Mobile)

Mobile Options Trusted Choice® Mobile App Compatible with iOS and Android platforms, this new app allows consumers to find a local Trusted Choice® agent, create their home inventory, document an accident, ask a question and read relevant headlines - all from their smartphone or mobile device. The customized format includes your agency logo and color scheme. It’s also integrated with Project CAP and IIABA online systems to provide single sign-on and easy account administration. Discounted rates with Portal-Bronze enrollment.

Member Pricing $20/Month (Mobile + Portal-Bronze Pkg)

$50/Month (Mobile Only)

Bronze Agency Program The introductory Bronze program offers a complete overview of Internet marketing with content, training and tools you can start using immediately. In addition to its seven educational modules, this program also features the Project CAP agency dashboard with marketing planner, profile manager and more. It’s available to IIABA member agencies at no additional charge, includes automatic enrollment in the Consumer Portal and entitles agencies to discounted rates on the Trusted Choice® Mobile App.

Add $20/Month (Bronze + Mobile)

Silver Agency Program Once you are ready to start building your own online marketing program, the Silver package will show you how. Including everything in the introductory Bronze program, the Silver program adds seven more intermediate educational modules, expanded marketing tools and content and an enhanced agency dashboard. It also features new training sessions every month, includes automatic enrollment in the Consumer Portal and entitles agencies to discounted rates on the Trusted Choice® Mobile App.

THE BIG “I” VIRGINIA • Summer 2012

Add $20/Month (Silver + Mobile)

Gold Agency Program If you are serious about building your brand and dominating your market, the Gold package provides the ultimate in do-it-yourself digital marketing. Starting with all the tools, training, content and services of Silver, the Gold program adds seven advanced educational modules, a premium agency dashboard, unlimited content library, custom widget builder, two monthly training sessions and more. It also includes enrollment in the Consumer Portal and discounted rates on the Trusted Choice® Mobile App. Self-Directed Programs

Medal Packages

Member Pricing $0 Down / $0 Month (Bronze Program)

Member Pricing $197 Down / $47 Month (Silver Program)

Member Pricing $297 Down / $147 Month (Gold Program)

Add $20/Month (Gold + Mobile)

Platinum & Diamond Agency Services Our full-service Platinum and Diamond programs make you feel like you have your own digital marketing agency because you do. From custom-designed websites to professionally written content, these comprehensive programs couple all the tools, training and content of the Gold program with expanded services that ensure your agency deploys superior digital marketing campaigns - while you focus on selling more policies.

Member Pricing Available Call 855.372.0070.

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Summer 2012 • THE BIG “I” VIRGINIA

What is

arketing whiz Michael Dell’s last name We urge member agents and brokers to get involved: is placed on everything connected with • Fully integrate Trusted Choice® into your firm’s the company: office signs, ads, website, culture, operations, workflow and marketing. bills, computer boxes—and, of course, the • Use the Pledge of Performance to educate computers themselves. consumers and prospects about what you But you’ll also see something else connected with deliver to them—it will help you close sales. the Dell brand: “Intel Inside.” As an “ingredient brand,” • Be visible in the community with the Trusted Intel Inside provides value to the “host brand”—in this Choice® logo—on your advertising, signage, case Dell. business cards and letterhead. To be successful as a recognizable consumer • Leverage the logo and Pledge of Performance brand, Intel relies on national advertising (maybe you’ve on your website. seen the Blue Man Group spots), computer makers, • Use the tag-able ads for your local print, radio distributors and retailers to use Intel Inside wherever and TV campaigns (information available at they can. www.TrustedChoice.com/agents). A similar strategy is being employed to build the Trusted Choice® consumer brand. Trusted Choice® is a long-term branding Trusted Choice® is an ingredient adding value to your agency. It doesn’t replace your strategy to position participating agents and agency’s brand—it enhances your agency’s brokers as the preferred consumer Choice® brand because it delivers to consumers and for insurance and financial services. businesses exactly what they say they want from an insurance provider. Still, we continue to see confusion among agents and brokers over what Trusted Choice® offers. • Run local print, TV or radio ads that are timed This isn’t a market-access program or an online MGA. with nationwide Trusted Choice® advertising It’s not simply a logo. It’s not just a national advertising flights. Check www.TrustedChoice.com/agents or public relations program. Nor is it an association for dates of upcoming ad flights. name. • Make sure your information is updated at the Instead, Trusted Choice® is a long-term branding Agency Locator on www.TrustedChoice.com strategy to position participating agents and brokers because all leads from national advertising ® as the preferred consumer Choice for insurance and and public relations campaigns are driving financial services. Whereas Intel Inside reminds us of consumers there. ® smarter, better and faster computers, Trusted Choice represents advocacy, customization and choice. Be smart like Michael Dell. Burnish your agency’s ® Like Intel Inside, the key to the Trusted Choice brand by actively participating in Trusted Choice®, your strategy is participation: We depend on an integrated ingredient brand. team of participating agents, brokers, local boards, state affiliates and carriers to consistently remind For more information on branding and Trusted Choice®, consumers of its value. visit www.trustedchoice.com/agents. 20

THE BIG “I” VIRGINIA • Summer 2012

King Arthur and THE KNIGHTS OF THE ROUND TABLE shared one extraordinary quality in common:

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Get The Point! Project CAP Urges Independent Agents to Join the Cause to Recapture Market Share

ebruary 13, 2012 (Minneapolis, MN) – In an age when many lament the intrepid rise of direct writers and their effect on personal lines insurance, the IIABA and its strategic partners have stepped up to refocus attention on this critical market and reclaim the independent agent’s rightful share. Created through an alliance of the IIABA, Trusted Choice®, State Associations and key insurance carriers, Project CAP is an industrywide initiative with the vision and resources to elevate the independent channel’s online presence and enhance the independent agency’s digital marketing expertise. “Not long ago, independent agents owned a majority share of the personal lines insurance market,” said IIABA Vice Chairman, Tom Minkler. “Today, it’s more like 34 percent. And every point of that personal lines market adds up to about $2.8 billion in written premium – or roughly $300 million in agency commissions. That’s our market. That’s our point. We want the independent channel to get that point and more.” Most would agree that the independent channel still offers insurance consumers more choices, better service and greater advocacy than direct writers or captive agent carriers. But the way in which consumers seek and evaluate their options has changed, and the IA channel hasn’t changed to keep up. According to Project CAP CEO, Scott Deetz, “roughly 75% of today’s personal auto insurance shoppers begin their search for new coverage online, but independent agents are virtually invisible. We’re not showing up where customers are looking, so we’re missing the chance to tell our story. That’s where Project CAP comes in.” Guided by a senior team of specialists with both insurance industry and Internet marketing experience, Project CAP has established a two-pronged strategy to help independent agencies leverage digital marketing, and help consumers find and connect with independent agents. To help drive this strategy, the organization is rallying all 22,000 IIABA member agencies to “join the cause” and participate in two key initiatives: 22

THE BIG “I” VIRGINIA • Summer 2012

•

A new Consumer Portal that allows online insurance shoppers to compare coverage options from multiple carriers and connect with a local independent agent. A comprehensive Industry Website that provides independent agencies with all of the digital marketing technology, tools, training and services they need to attract and relate to today’s online consumer.

“If there’s one thing I’ve learned during two decades in this industry, it’s that no agency can win alone,” remarked Deetz. “We all compete better when we all compete together. So, Project CAP is empowering independent agents to leverage digital marketing in new ways that will grow their own business locally while strengthening our channel nationally.” Last month, the organization opened enrollment for its muchanticipated agency marketing programs through the new industry website at www.projectcapmarketing.com. Developed by some of the best marketing minds in the industry, this new resource provides a broad selection of digital marketing products and services for every independent agency – regardless of size, experience or expertise. Current agency offerings range from introductory and advanced selfdirected packages to fully customized programs with accompanying professional services. In fact, the Platinum and Diamond marketing programs offer a level of service equivalent to hiring a full-time marketing agency, but at a fraction of the cost. Perhaps best of all, every Project CAP agency marketing program also includes early enrollment for participation in the new consumer portal – and the basic Bronze package is available to IIABA member agencies free of charge. In addition, to its on-going agency marketing programs, the organization also offers independent agents occasional short-term opportunities – like its QuickStart packages. Designed to help independent agencies jumpstart their year, these programs include a unique array of online webinars, tools and services delivered within

a 60-day period for a one-time, specially-reduced rate. However, the significant discount attached to such packages requires Project CAP to offer them to a limited number of agencies for a limited time. Although enrollment for the QuickStart program closed February 17, the team anticipates introduction of similar, short-term opportunities later in the year. Scheduled for launch in mid-2012, the Project CAP consumer portal will address the insurance consumer’s collective desire for knowledge, choice, and comprehensive service. While some other online options may also offer consumer research and rate comparisons, none present the unique combination of benefits that will be available here. Aside from the ability to evaluate dozens of insurance companies, the opportunity to select an independent agent who will advocate on their behalf is an advantage most shoppers will find irresistible. Every agency participating in the new Consumer Portal will receive an online profile visible to all visitors to showcase your key producers and all the benefits they provide. Whether consumers choose to request an online quote or not, they’ll always have the option of reaching out to your agency for assistance in determining or completing the right coverage. In its effort to provide something for every IIABA agency, Project CAP has also become the industry source for the new Trusted Choice® Mobile App. Designed to work on iOS and Android platforms (with Blackberry versions planned for Spring 2012), this amazing resource allows consumers to find a local Trusted Choice® agent, create their home inventory, document an accident, ask a question and read relevant headlines – all from their smartphone, tablet or other mobile device. Since digital marketing is all about building relationships that build brands, this app can be customized with an agency’s color scheme and logo. It’s also integrated with both Project CAP and IIABA online systems to provide participating agencies with single sign-on and easy account administration. To encourage adoption and use, the new Trusted Choice® Mobile App is available as an added component of most Project CAP agency marketing packages or separately for a nominal monthly fee. According to Project CAP, all of its agency programs, products and services are not only designed to employ the best practices of digital marketing, but to deliver real results in the real world specifically for independent insurance agents. But these programs are just part of a much larger initiative to reunite the independent channel as one collective voice and one Trusted Choice®. In summary, the organization

believes that if every agency will raise its hand and join the cause, then the independent channel will raise its presence with online consumers and return its agents to a position of leadership in personal lines. According to Deetz, that’s more than just a prediction; it’s a matter of Internet protocol. “Today’s search results rankings are all based on the number of connections each entity enjoys. With our 22,000 agencies all pointing to the portal – and each other – the IIABA can’t help but dominate its category.” To help spread the word, Project CAP has established an informational website at www.projectcap.info and also recently launched its own page on Facebook. IIABA association members who would like to receive regular updates on any of the above initiatives may sign up through either of these resources. Independent agents who would like more information about Project CAP agency marketing programs are invited to call 855372-0070, email info@projectcapmarketing.com or visit www. projectcapmarketing.com. Association Contact: Paul Martin, CPCU State Association Liaison Project CAP Mobile: 512-762-8338 / paulmartin@projectcap.info Media Contact: Tim McDonnell Vice President I Corporate Relations & Communications Office: 952-500-8614 / Mobile: 612-850-6009 timmcdonnell@projectcap.info

Summer 2012 • THE BIG “I” VIRGINIA

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s the New Year begins, talk of the economy, politics and a hoped-for insurance market hardening will become prevalent in insurance circles. In the midst of change—and in some cases, as a result of changes— certain insurance products may generate increased interest among agents and brokers and their clients in 2012. Medical Tourism Health care changes over the past few years have led to more Americans going abroad for medical treatment and procedures. The Deloitte Center for Health Solutions’ 2008 report, Medical Tourism: Consumers in Search of Value, said that outbound medical tourism could reach 1.6 million patients in 2012, up from 750,000 in 2007. Tracy Simons, president of Custom Assurance Placements, Ltd., says the trend to access medical care in other countries is driven by “an increase in uninsured people, a drive to reduce medical care costs, patient access to care or procedures, and the effect of governmental changes on health care.” To remove some uncertainty from such travel, Simons’ firm provides access to two insurance policies: a travel accident policy, including coverage for accidental complications for the medical tourist; and a liability product for facilitators or employers who engage in medical tourism. “Travel accident policies pay participants directly for eligible expenses related to an accident or complication,” Simons explains. “The need arose from medical tourists asking, ‘What if something goes wrong?’ In a foreign country, patients may not know how to handle expenses associated with a complication, but of course the providers 26

THE BIG “I” VIRGINIA • Summer 2012

Finding and offering new “value-addeds” to clients need to be paid.” The policy also includes coverage for death, disability, family coordination, loss of reproductive function, residence modification and more. The second policy helps other stakeholders in the process. “Medical tourism facilitators help patients find the correct facilities, arrange trips and assist patients in the medical tourism process,” Simons explains. “In addition, some self-funded employers offer a medical tourism benefit in their policies. Both have a need for liability insurance.” Retail agents may have among their existing client base firms with a medical tourism liability exposure. “These could be travel agents, medical tourism facilitators, employers or even hospitals,” Simons notes. “Agents and brokers can access policies to help these firms cover liability associated with their involvement.” In addition, she notes, use of a travel accident policy can provide direct benefits to the patient and help make the patient whole if a complication arises. Simons encourages agents and brokers to find a knowledgeable partner to learn more about the products and their use. “We are happy to help any agent assess a client›s exposure,” she notes. “Without formal education programs addressing the subject, it’s important to deal with people with experience in this new and emerging field.” Cyber Risk Growth in cyber attacks and increased legislation could boost interest in cyber coverage in 2012. “Headlines have raised awareness,” says Tim Francis, Enterprise Cyber Insurance Lead for Travelers, “and most states are passing or have passed legislation on how companies with data breaches must respond.”

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Attacks don’t just target large companies with lots of customer information. “Cyber events may even be more likely to happen with smaller firms,” he notes. “Criminals are opportunists, and may perceive smaller firms as having less sophisticated systems or more potential vulnerabilities.” Hackers aren’t always after money. “Some look to gain access to cause trouble or make a point,” Francis explains. “We’ve seen a rise of so-called ‘hacktivism,’ where people have an axe to grind.” Such attacks are sometimes politically motivated, often associated with ideology. Also, he adds, disgruntled former employees “may create mischief within a company’s computer system” to get back at the firm. Cyber risk insurance helps manage financial and reputational risks associated with a host of cyber events, Francis says. “These can range from an employee causing economic harm by inadvertently transmitting a virus to another party, to organized criminal operations hacking into a company’s system.” Insurance policies can help customers manage the event and pay for some expenses associated with it. “This has led more and more companies to purchase the insurance,” he notes. “Any type of company that uses technology to do business has some degree of cyber exposure. It’s not just tech companies or companies that aggregate a lot of personally identifiable client data.” Agents and brokers can help clients address potential exposure. “First, they need to really understand their clients’

needs,” Francis advises. “Particularly in the cyber arena, needs may differ depending on the size of the company, its industry and how it uses technology.” Second, he says, know the market. “Learn about the cyber coverages and find a partner that understands various clients’ needs,” he adds. “Partner with someone who can, if needed, customize coverages, limits and retentions based on the particular risk.” Finally, he tells agents and brokers, “Don’t let this be daunting. This is a relatively new risk area, and providers are willing to work with you to help you understand exposures, coverage and how it fits with other insurance you provide.” Contract Litigation The need to bring certainty to an uncertain process— contract litigation, the most common form of civil litigation in the United States—may drive interest in a relatively new coverage: contract litigation insurance. According to Kevin Martin, CEO of Sonoma Risk, “Today, contracts that govern most transactions, whether they’re with employees, employers, customers or vendors, contain something called a ‘prevailing party’ or ‘loser pays’ provision. “Any time someone is involved in a lawsuit, there’s a certain level of fear and uncertainty surrounding the outcome of the litigation,” he adds. “It doesn’t matter whether you’re the plaintiff or the defendant.” Besides simply worrying about winning or losing a case, parties are now concerned about

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the added cost of paying the winner’s attorney’s fees. According to Martin, contract lawsuits are common. “There are reportedly 4.5 million filings each year,” he says, “and more than half contain a ‘loser pays’ provision.” Such suits aren’t limited to certain types of business. “Because business is conducted through contracts, contract litigation is a risk that runs across all industries,” he adds. Standard insurance policies exclude coverage for contract disputes. “In many cases, the attorneys’ fees awarded to the winning party far exceed the damages,” Martin notes. “The financial burden for litigants paying their attorneys’ fees, plus those of the other party if they lose, can be devastating.” Contract litigation insurance protects litigants from the risk of having to pay their adversary’s attorneys’ fees. All businesses and individuals involved in a breach of contract dispute where a prevailing party provision exists in the contract or state statute are eligible for the product, which is underwritten by Zurich. “Coverage can be purchased when customers actually need it—after litigation begins, and up to 12 months thereafter,” Martin notes. As litigation progresses, the ability to offer coverage decreases as the uncertainty of the lawsuit increases. Contract litigation insurance is available nationwide with no premium commitment through US Assure Insurance Services, Inc., a national insurance brokerage and program

administrator that is distributing the product Sonoma Risk developed. Martin says comprehensive marketing support and training opportunities are available to those interested in incorporating the program into their business offerings. Martin encourages agents and brokers to take advantage of these opportunities to learn more about the product and its advantages to their customers. “Contract litigation insurance represents a valuable tool agents and brokers can use to help mitigate client risk by reducing their financial exposure,” he says. LexArcheology Another product gaining interest can protect owners of North American construction projects from the unexpected— unexpected finds, to be exact. “Brokers and insureds came to us citing specific examples of archaeological discoveries within a project site, which caused construction delays and subsequent increased expenses, along with potential loss of revenues,” says Frank Tricamo, product line manager— construction property, for Lexington Insurance Company. Such finds range from Native American artifacts and burial grounds to ships and more. “Contractors have come across artifacts, particularly in the early stages of the projects, when sites are cleared, excavated and graded,” he adds. “Of course, these unexpected discoveries may stop a project or slow it down. And that can cost the owners money. “The product is definitely generating interest, in large

Summer 2012 • THE BIG “I” VIRGINIA

part due to its uniqueness,” Tricamo says. An endorsement of Lexington’s builders risk policy, LexArchaeologySM, as it’s called, extends coverage for delay in completion, rental income, gross earnings, soft costs, archaeological expenses, and extra expense losses incurred during a delay resulting from unexpected discoveries. Similar coverage is available in Canada, through Chartis Insurance Company of Canada. To be covered, projects must be federal undertakings subject to Section 106 of the National Historic Preservation Act of 1966. Plus, Tricamo says, they must have had a cultural resource survey conducted in the planning process and received written approval from federal agencies and authorized lead agencies (Army Corps of Engineers, Department of Energy, Bureau of Reclamation, National Park Service) to start construction under Section 106. Canadian projects are subject to similar requirements. “The unique factor of this coverage is that, unlike traditional property coverage that requires direct physical loss or damage as a trigger for time element coverages, the trigger for the LexArchaeology endorsement is simply the discovery of archaeological resources at the project site,” Tricamo explains. “Buyer interest is strong when, in the early stages of planning, it is determined that the project may have an exposure,” he adds. “Retail and wholesale brokers and agents can recognize the particular details of projects on behalf of their clients and work with them to complete the application

form. Remember, though, that the product is not available on a stand-alone basis. Certain eligibility requirements exist and there are minimum premiums and maximum limits available, subject to risk factors identified through the application.” Conclusion As agents and brokers serve clients and work to attract prospects in the coming year, they should continually seek out differentiation opportunities. By working closely with insurance providers, seeking out information online and at industry events, and combing trade publications and their marketplace guides, agents and brokers can find new ways to bring value to insurance buyers in 2012 and beyond. For more information: Medical Tourism Web sites: www.customassurance.com www.globalprotectivesolutions.com Cyber Risk Web sites: www.travelers.com www.travelers.com/business-insurance/managementprofessional-liability/cyber-risk.aspx Contract Litigation Web site: www.usassure.com/contractlitigatio LexArchaeology Web sites: www.lexingtoninsurance.com www.lexcasts.com/ viewCast.php?lexcastId=123 Reprinted with permission from the December 2011 issue of Rough Notes magazine.

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THE BIG “I” VIRGINIA • Summer 2012

CYBER LIABILITY

CYBER LIABILITY:

One of the Fastest Growing Concerns of Businesses Today Make Sure Your Agency and Your Clients Are Protected

By Linda S. Loving, CIC, AISM, AIAO IIAV Chief Operating Officer and VFSC Executive Vice President

yber liability is becoming one of the fastest growing concerns of businesses who handle personal and protected information. Exposure can be through employee theft, hacked computer systems or even through a lost smart phone or laptop. Responding to a breach can be expensive, time consuming, and even shut down a business. The average cost for a compromised exposed record is approximately $214, and if you multiply that cost by the number of clients that a typical agency has that could be lost or stolen, you are talking about some serious exposure in terms of both time and money which can add up quickly. “Why would my agency need cyber liability insurance?” As an insurance agent, you collect, use and store personal information about your clients on a daily basis and in doing so you have an obligation to secure this information whether it is in electronic or paper form. Many insurance policies such as general liability, property, crime and even E&O don’t provide proper coverage for your cyber liability exposures. Most agencies, regardless of size, have an exposure to cyber risks and these same exposures can pose a significant financial threat to your agency. Also, keep in mind the cost of a cyber liability policy can be much less than the total cost of handling just one data breach. The Independent Insurance Agents of Virginia, through its for-profit arm VFSC, has a data breach coverage product for IIAV member agents. By purchasing Data

Breach Liability coverage, agencies are not only protecting their assets, they are also showing their customers they care about the security of their personal information thereby increasing client confidence in their agency. Data Breach Liability is designed to mitigate an organization’s exposure if protected information is lost or stolen. While many companies are adding some minimal data liability coverage to their forms, they are not intended to cover the full scope of a data breach. Our Data Breach policy can provide Data Breach & Privacy Liability (3rd party coverage), Data Breach Loss to Insured (1st party coverage), Electronic Media Coverage, and Supplementary payments in addition to the limit of liability for breach mitigation costs and reward reimbursement. The minimum premium for a $1,000,000 limit is $1,500. Our Data Breach product is also available for agents to provide to their clients who have data exposure. Offering this coverage to their clients provides a valuable service as well as protection to them, and brings additional revenue for the agency. Furthermore, if agents are not offering this coverage to their clients, they can be exposing themselves to an E&O exposure due to failure to procure coverage which is the number one cause of E&O claims. Insurance agents need to keep abreast of new emerging risks and have a duty to protect their customer’s personal data. Visit our website for a data breach application to obtain a quote for your agency as well as your clients. Go to http://www.iiaba.net. Summer 2012 • THE BIG “I” VIRGINIA

Where to Find it – A Resource Guide to Trusted Choice® Benefits

Benefit #1 – Licensed Use of the Trusted Choice® Logo and Pledge of Performance  Trusted Choice® Logo and Logo guidelines: go to www.trustedchoice.com/agents, mouse over the ‘Logos/Pledge’ tab until the dropdown menu is revealed, in the dropdown click on either ‘Logo Examples’ for logos OR ‘Logo Rules’ for guidelines.  Pledge of Performance: go to www.trustedchoice. com/agents, mouse over the ‘Logos/Pledge’ tab until the dropdown menu is revealed, click on ‘The Pledge of Performance’ in the dropdown.  Value of the Pledge, including ideas for the 24/7 pledge point: go to www.trustedchoice.com/agents, mouse over the ‘Logos/Pledge’ tab until the dropdown menu is revealed, click on ‘The Value of the Pledge’ in the dropdown. Benefit #2 – National Advertising and Public Relations Exposure  National Ad schedule: go to www.trustedchoice. com/agents, mouse over the ‘Advertising’ tab until the dropdown menu is revealed, in the dropdown click on ‘Ad Flight Schedules’; click on the article ‘Ten Tips for Creating a Media Plan’.  Facebook presence: go to www.facebook.com/ trustedchoice. . Benefit #3 – Customizable Advertising Materials  Creating a media plan: go to www.trustedchoice. com/agents, mouse over the ‘Advertising’ tab until the dropdown menu is revealed, in the dropdown click on ‘Advertising Articles’; click on the article ‘Ten Tips for Creating a Media Plan’.  Trusted Choice® tag-able TV, radio, billboard and print ads: go to www.trustedchoice.com/agents, mouse over the ‘Advertising’ tab until the dropdown menu is revealed, in the dropdown click on the advertising media that is of interest. Benefit #4 – Inclusion in the Agency Locator on the Trusted Choice® Consumer Website  Viewing your agency profile on the Trusted Choice® agency locator: go to www.trustedchoice .com, enter your zip code in ‘Find an Agent’ and click ‘Go’. 32

THE BIG “I” VIRGINIA • Summer 2012

 Creating/Updating your agency profile for the Trusted Choice® agency locator: go to www.trustedchoice.com/agents and click on ‘Updating your company profile’. Benefit #5 – Informative Consumer Articles  Consumer oriented articles (content) for use in newsletters, website and Facebook: go to www. trustedchoice.com/agents, mouse over the ‘Public Relations’ tab until the dropdown menu is revealed, in the dropdown click on ‘Public Relations Articles’. Benefit #6 – Customizable Press Release Templates  PR – press release templates: go to www.trustedchoice.com/agents, mouse over the ‘Public Relations’ tab until the dropdown menu is revealed, in the dropdown click on ‘Press Release Templates’. Benefit #7 – Syndicated Content Feed on Website  Automatic content feed for website (RSS feed): go to www.trustedchoice.com/agents; see information on the home page.  Sample website containing RSS feed (integrated into the feel of the site): go to http://afsinsurance. com/articles.php. Benefit #8 – Trusted Choice® Company Partners  List of company partners: go to www.trustedchoice. com/agents, click on the ‘Companies’ tab; scroll down.  Company co-op funds: go to www.trustedchoice. com/agents, mouse over the ‘Advertising’ tab until the dropdown menu is revealed, in the dropdown click on ‘Advertising Articles’; click on the article ‘Leveraging Company Co-Op As Dollars’. Benefit #9 – Marketing Reimbursement Program (MRP)  Marketing Reimbursement Program (MRP) complete details: go to www.trustedchoice.com/ agents and click on the link on the home page OR go to www.trustedchoice.com/mrp.  Getting MRP reimbursement for adding the logo and pledge to your website: go to www.trustedchoice.com/agents and click on the link on the home page (OR go to www.trustedchoice.com/mrp); click on ‘MRP Guidelines.

17148 Tapco Ad- Big I VA Summer 2012.pdf

Getting the Trusted Choice® Brand Started in your Agency  Zoom in on Branding guide: go to www.trustedchoice.com/agents, mouse over the ‘Branding Basics’ tab until the dropdown menu is revealed, click on ‘Zoom in on Branding’ in the dropdown (available on the page are a PowerPoint and the individual phases in PDF format). Phase 1: Getting Started: Educating and engaging your agency personnel and forming a brand team. Phase 2: Evaluate Your Brand: Review your agency’s current image in the marketplace. Phase 3: Redefine Your Brand: Develop a brand promise and examine your agency’s brand identity. Phase 4: Integrate Trusted Choice®: How your agency can benefit from this national brand. Phase 5: Rethink Your Infrastructure: Review products, services, workflows, employees & technology. Phase 6: Create a Marketing Strategy: Develop a comprehensive marketing plan. Phase 7: Direct Marketing: Begin branding promotions with a direct marketing campaign. Phase 8: PR & Special Events: Learn to utilize “free media,” both in print and broadcast, to tell your story. Phase 9: Print, Web & Outdoor Advertising: Make the biggest impact for the smallest amount of money. Phase 10: Broadcast Advertising: Advertise wisely and effectively on both radio and television.  Member branding checklist: go to www.trusted choice.com/agents, mouse over the ‘Branding Basics’ tab until the dropdown menu is revealed, click on ‘Branding Articles’ in the dropdown; under the ‘Live the Brand’ headline, click on ‘Branding Checklist’.  Live the Brand guide: go to www.trustedchoice.com/ agents, mouse over the ‘Branding Basics’ tab until the dropdown menu is revealed, click on ‘Branding Articles’ in the dropdown; under the ‘Live the Brand’ headline, click on the ‘Live the Brand guide’.

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Summer 2012 • THE BIG “I” VIRGINIA

Lessons Learned:

Cases with HAPPY

.......... ENDINGS

ake a look at these examples of E&O claims and what the agency did well. Share these with your staff and talk about how your agency would fair if it happened to you.

 FLOOD WAIVER – An insured suffered a flood loss, then sued its agent for damages for failing to advise that her homeowner’s policy did not cover all hurricane damages, including flood, since it had a “hurricane deductible.” The agent’s customer file included a signed flood insurance waiver. When provided with a copy of this waiver, the Plaintiff’s counsel in turn provided us with an order of dismissal with prejudice.  LESSER COVERAGE – The agent was accused of changing the renewal policy to one of lesser coverage. The agent sent a letter outlining the prior year’s coverage and confirming the differences in the new reduced coverage requested by the customer. The confirmation letter reflected the agreement between the agent and customer of the lesser coverage. The customer never contested the written agreement until suit was filed.  DECREASE REPLACEMENT COST VALUE – The agent met with the plaintiff at renewal to review the insurance for the plaintiff’s commercial building. The plaintiff decided to reduce the RCV of the building based on the decreasing property assessments. A CSR for the agency sent two letters after the meeting confirming the plaintiff’s decision to decrease the RCV of the building. After a loss the plaintiff insisted that he did not instruct the agent to decrease the RCV and claimed that the confirmation letters from the agency were not received. The agent made a persuasive witness and the two letters confirming the reduction of coverage provide an excellent defense. 34

THE BIG “I” VIRGINIA • Summer 2012

 FOR THE 5TH TIME, DO YOU WANT FLOOD COVERAGE? – An agent insured a small manufacturing facility. During the first visit with the customer the agent observed a creek about 50 yards behind the building. The agent recommended flood insurance in the proposal on the first visit and on every subsequent visit to the property. Each year the customer file was documented to show the recommendation and subsequent rejection by the customer of recommended flood coverage. In the 5th policy year the insured suffered significant flood damage when the creek overflowed its banks during a “storm of the century”. The insured alleged that the agent failed to adequately explain the “water” exclusion in his policy thereby confusing him about the necessity of flood coverage. The documentation of offering flood coverage won the day.  DON’T ROCK THE BOAT – The plaintiff alleged failure to procure liability insurance coverage for its rental of small boats. The agency file (all contained on the agency management system) clearly documented that the customer called and canceled the insurance on the rental boats stating that the business was no longer renting boats. Then later, when the business again sought to procure the insurance, the agency well-documented its requests for information from the client to underwrite the policy. The customer file documented the customers repeated failure to provide the information, including an inquiry on the day of the accident wherein the customer said they were busy and would get back to the agency later in the week with the underwriting information. The agency documented well the customer’s original decision to cancel the coverage. The file also contained all of the agent’s attempts to get the required information to reprocure the coverage, which efforts might have been successful but for the client’s failure to timely provide the underwriting information. The agency personnel made good impressions during the deposition.  UNDERINSURED AND STILL TRYING TO SAVE MONEY – The insured was grossly underinsured for the value of property stored at their record storage facility. Using faxes, emails and letters, the attorney was able to show that whenever the insured had requested info on buying more coverage, a CSR for the agency had responded with the requested information within 24 hours. There was a pattern where the insured would request information, get it, then start questioning ways to reduce the cost as opposed to the original reason of increasing limits. The policyholders would then inevitable drop the inquiry. This

happened in fits and spurts over a period of years, and the insured just never pulled the trigger to buy the additional coverage needed. The agency was always prompt in providing the appropriate information needed to do so. The attorney was able to show a pattern and practice for the insured calling and not acting on the information provided by the agency. The case settled for a fraction of the underlying damages. This case demonstrates how the agency’s conduct and record-keeping brought about a favorable result.  A TOUCHY SUBJECT – An agency was sued by its customer, a boat manufacturer, because the manufacturer had an EPLI claim but no EPLI coverage. The boat manufacturer was seeking reimbursement of attorney fees spent to defend the claims and the amount paid to the claimant to settle the manner. The combined amount the manufacturer was suing the agent for was well over $100K. After reviewing the agency’s customer file the attorney found that the proposal had clearly listed the fact that the policies available had no EPLI coverage. In addition to clearly listing in the proposal that the coverage available did not provide EPLI coverage, the agency had the customer sign and date the proposal and also had the customer initial each page. This documentation got the lawsuit dismissed.  EXACT COVERAGE REQUESTED: AGENT MEETS LEGAL DUTY – This case summary highlights the need for agents to know their state’s duty to advise and standard of care. The agent gave the customer the precise coverage he had requested. The agent’s file was well documented and demonstrated that they had in fact obtained the coverage exactly as it was requested by the customer. However, when the customer sustained an uncovered loss, he sued the agent claiming that the agent should have not only procured the coverage that he had specifically requested, but the coverage that would have covered this specific claim. While the agent had clearly met his obligations under current state law, and a summary judgment in favor of the agent was obtained, counsel for plaintiff proceeded with an appeal to the State Court of Appeals in an effort to expand the agent’s duty to suggest coverage according to the insured’s business operations. When agents go beyond their legal duties as a normal business practice, make sure that employees are careful to execute in the risk exposure assessment process and in offering and appropriate coverage for the customer. Document files accordingly. Summer 2012 • THE BIG “I” VIRGINIA

 COINSURANCE EXPLANATION DOCUMENTATION TO THE RESCUE – An agent sold a builder’s risk policy and asked the insured for the completed value. The insured initially advised it was $3 million and then reduced it to $1.5 million. As a result of the reduced value, the very astute agent provided a letter fully explaining the co-insurance penalty one could face if they were underinsured. A loss occurred and sure enough the customer was underinsured. The case was tried and the jury returned a defense verdict in favor of the agent. The jury advised the court that the one piece of evidence that influenced them to side with the agent was the letter from the agent explaining what would happen if the insured was underinsured. A suggested best practice could be that all customers receive with their policy a letter explaining co-insurance.  CONCRETE EVIDENCE - STOP-GAP/EMPLOYERS LIABILITY DOCUMENTATION – An agent was asked to quote a concrete statue manufacturing company for liability. The company had been insured with Carrier A for 25 years, however, their agent representing Carrier A died and they found the new agent. Not representing Carrier A, the new agent provided a liability coverage proposal for coverage with Carrier B. Midway through the first policy term with Carrier B, the owner of the concrete statue manufacturing company decided that he felt more comfortable being insured with Carrier A. He knew what to expect with carrier A and wanted to return to them for coverage. It was purely a comfort issue with the carrier and not the agent. The owner had his office manager call the home office of Carrier A and obtained the name of an agent that could write the coverage for them with Carrier A. The new agent representing Carrier A met with the owner and the owner provide the history of being a long time insured and asked for a quote from Carrier A. The agent was instructed to set up a meeting with the office manager which he did. The office manager gave the agent a copy of their current policy with Carrier B and instructed him to quote with Carrier A the same coverages and the limits currently written by Carrier B. The agent did exactly that and was instructed to order the policy. When the agent reviewed Carrier B’s policy, he mistakenly thought there was a Stop-Gap Employers Liability Endorsement for operations in a monopolistic state. The agent’s quote request to Carrier A included request for Stop Gap coverage. Carrier A would not provide a quote for the coverage as the concrete manufacturing facility class code did not qualify for a Stop-Gap endorsement. The agent advised the insured that Carrier A refused to write the Stop-Gap 36

THE BIG “I” VIRGINIA • Summer 2012

Coverage endorsement. The insured acknowledged the lack of coverage but still ordered the policy. The policy was renewed the next three years, with each year the insured asking the agent to duplicate the prior year’s limits and coverage. Each renewal the agent followed the instructions of the insured. The customer reviewed the policy form and paid for the policy, but never requested any other changes to the policy nor addition of the Stop-Gap coverage. In the fourth policy year an employee died in a work-related accident and the insured was sued for intentional tort for which there was no coverage. The concrete statue manufacturing company owner sued the agent alleging he failed to provide the “full coverage” requested. The agents file documented every interaction with the customer and the carriers. In summary agent’s file contained all of the documentation necessary to defend the agency.  COMPLETED PRODUCTS CREATE LIABILITY? – The agent procured products liability insurance for a shocks and struts manufacturing company. The owners of the company were nearing retirement, sold the company to another firm and then canceled their products liability insurance. Subsequently, a person was injured due to a failed strut. The insurance company denied the claim on the basis that the company’s product liability did not cover the products after the coverage was cancelled. The company and its owners were sued for the personal injury. The agent was sued for failing to properly advise and obtain coverage for products after the sale of the company was finalized. Unfortunately, the agent’s lack of experience was a challenge in defending the claim. Furthermore, the company and owners argued that the agent assured them that they were properly covered for products liability after the sale. The attorney of the owners failed to show that the agent had a special relationship with the company which would have increased the duties owned by the agent, thus the court granted partial summary judgment in favor of the agent on the issue of failure to advise. The trial resulted in a jury verdict in favor of the agent on the issue of failure to obtain the proper coverage. The jury sided with the agent because they felt the company owners were the ones who made the decision to not purchase the additional coverage. Visit www.iiaba.net/eohappens for more free risk management tools and resources. Copyright 2012 SwissRe Corporate Solutions and IIAA Agency Administrative Services, Inc.

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Summer 2012 • THE BIG “I” VIRGINIA

New Swiss Re Corporate Solutions for Insurance Agents E&O Policy Approved in Virginia

s the endorsed Agents Professional Liability carrier of IIABA and Independent Insurance Agents of Virginia, Swiss Re Corporate Solutions is committed to protecting policyholder business, assets and reputation. In collaboration with the Big “I”, Swiss Re Corporate Solutions has developed a new coverage form containing updated features and enhancements designed to reflect the evolving needs of agents and brokers. This new policy form is effective in Virginia June 1, 2012. Here are some of the new features: • Personal Data Protection for a breach of the agency’s network security o New first party coverage provided with limits of $10,000 per incident/$25,000 policy period aggregate for agency expenses incurred subject to a $1,000 each incident deductible. • Breach of Personal Data o New third party coverage provided with sub-limit of $1,000,000 per breach and aggregate if agency meets conditions set out in policy – subject to underwriting approval. • Deductible Reduction o Deductible reduction applies to claims alleging failure to procure coverage where Swiss Re determines that the agency has written documentation in file refuting such claim. 50% reduction up to a maximum of $12,500. • Subpoena Expense Reimbursement o Limit increased from $5,000 to $10,000 per policy period. • Loss of Earnings Reimbursement o Increased to $500 per insured per day/maximum of $10,000 per policy period. • EPL Coverage endorsement limits o Added limit options of $1MM and $2MM in addition to existing limits of $250,000 and $500,000. • Investment/Securities Products Endorsement limits o Added limit option of $2MM in addition to existing limits of $500k and $1MM. If you are not one of the numerous insurance agencies in Virginia that have their E&O insurance with Swiss Re through IIAV, contact us at members@iiav.com or visit www.iiav. com for an application. There couldn’t be a better time to obtain a quote with these coverage enhancements and competitive pricing.

THE BIG “I” VIRGINIA • Summer 2012

Don’t Miss These Events at the 2012 IIAV Convention!!

•

Monday, JUNE 18, 10:00 AM -- “CROSSFIRE” Steve Pearson, Chris Lagow and Doug Palais discuss legal issues of our industry. Moderated by Bob Bradshaw, President, IIAV.

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Monday, June 18, 3:00 PM -- The Trade Show – “IT’S 5:00 O’CLOCK SOMEWHERE” Reception at 5:00 PM in the trade show. Agents are eligible to win a $1,000 gift card! Lots of door prizes from the many exhibitors!!!

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Monday, June 18, 12:00 NOON -- The Virginia State Police present “Insurance Fraud Training” (2 hours OGI CE)

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Tuesday, June 19, 10:00 AM -- Concurrent sessions “Best Practices” & “FEMA” (2 hours OGI CE)

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Tuesday, June 19, Golf at Broad Bay Country Club

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Tuesday, June 19, Awards Dinner & THE EMBERS!

SEE OUR ONLINE CONVENTION BROCHURE AND AGENDA AT www.iiav.com

Summer 2012 • THE BIG “I” VIRGINIA

Big “I” Insurance Agents Umbrella Program

he Big “I” Insurance Agents Umbrella Program, underwritten by Penn National Insurance, offers the most comprehensive and affordable excess insurance protection available, packaged into one easy-to-manage policy. Most importantly, the umbrella can extend excess coverage for underlying insurance agents’/agencies’ professional liability policies. COVERAGE HIGHLIGHTS & AVAILABILITY

Coverage is available up to $10 million for commercial and professional liability and $5 million for personal exposures of owners and officers. (Higher limits may be available.) Core coverage includes: 1. Business Operations – Broadened coverage and excess limits protection for agent/agency’s business and employees for liability incurred as a result of normal business activities. The policy provides coverage over an agent/agency’s CGL, Business Owners, Employers Liability and Commercial Auto. Coverage features available: a. Personal Injury b. Libel, Slander and Advertising Offense c. First Dollar Legal Defense provided for claims not covered by underlying insurance 2. Professional Liability – Excess limits protection on a following-form basis for errors and omissions in the course of the agent/agency’s business as an insurance professional. Coverage can be written over occurrence or claims-made forms of a variety of primary E&O carriers. Coverage features include on a following- form basis: a. Full Prior-Acts Coverage b. Covers any person acting in a capacity as a real estate agent or notary. Options unique to this program: (available for an additional premium) 1. Personal Coverage – Broadened and excess personal protection for owners, partners and officers, including members of their families. 2. Employment Practices Liability – Excess limits protection on a following-form basis, for liability incurred by named insured and/or employees for wrongful employment practices. Coverage can be written on a claimsmade basis over a number of approved EPL carriers. (Subject to prior approval) Personal Umbrella Extension: This extended personal excess coverage is available for owners, partners and officers, including members of their families and includes two vehicles written on a Personal Auto Policy, one residence and any watercraft under 26 feet in length and less than 60 horsepower. LIABILITY LIMITS (available up to 5 million)

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Let us provide you with a quote today. Applications are available on our website at www.iiav.com under the Member Products & Services section – Coverages for Your Agency. 40

THE BIG “I” VIRGINIA • Summer 2012

Summer 2012 • THE BIG “I” VIRGINIA

Care to Share?

How Joining a Car or Bike Share Program Could Impact Your Insurance

cross the country car and bike share programs are gaining in popularity as a way to ease congested traffic patterns in urban areas while at the same time providing more flexible transportation alternatives to public transit. These programs are a great alternative for urban dwellers and college students who may not own a car or bike but occasionally need one to run errands, or to use as an alternate means of commuting. Members who join one 42

THE BIG â&#x20AC;&#x153;Iâ&#x20AC;? VIRGINIA â&#x20AC;˘ Summer 2012

of these programs pay a membership fee for a period ranging from a few days to a year. Members then are given access to the cars or bikes in the program for short term use (a few hours), so it can be cheaper and more convenient than renting a car from a traditional rental car company. Companies such as Zipcar are already set up in 34 states, primarily in cities, but increasingly on college campuses, including suburban campuses. Bike share programs are growing in popularity in these same places, and as we move into the spring months their popularity can only grow. But how does your insurance work with these types of bike and car share programs? Insurance and Car Share Programs Zipcar, and programs like it in specific cities (See an independent program in Philadelphia at www. phillycarshare.com), typically offer their members some insurance coverage and roadside assistance. But is their insurance enough to cover you on the road? In most cases the membership fees for the car share programs

will insure drivers for up to $300,000 in liability and physical damage, though members need to be aware that there’s usually around a $500 damage fee on any physical damage to the vehicle (so try not to hit anything with the car!). The question consumers need to ask themselves is whether the insurance you receive as a member is the appropriate amount of coverage for you. If you were to be the cause of a 20 car pile-up or if you were in an accident where someone was severely injured, how far would $300,000 go to cover your liability? A Trusted Choice® Independent Insurance Agent can help you determine how much insurance might be the most appropriate for your situation, and can help you obtain additional coverage if it’s needed. You may be pleasantly surprised that additional liability coverage may not cost too much more in premium. Let’s look at different scenarios regarding potential car share program members and how they would or wouldn’t be covered. Situation One: You already own a car and have auto insurance but joined a car share program. Maybe you already own a car but occasionally need access to a larger vehicle like a van or SUV for errands like picking up materials for a home improvement project, moving furniture or even to transport the little league team across town. Car shares can be a great solution if you live near a local car share “station” and need a car for a few hours on the weekends. Another situation where you may already have auto insurance for cars you own would be if you joined a car share program for your son or daughter who is a college student living away from home. In either case, since you already have a policy it would likely provide you and your family members with additional insurance coverage if the $300,000 wasn’t adequate. It would provide protection for medical payments and coverage for you in the event you were in an accident with another driver who was uninsured. Family members are also covered by this provision, including college students, provided they are still dependents who live at home when they are not in school. Make sure that you discuss what your current policy would cover with a Trusted Choice® insurance agent when you join a car share program under either of these circumstances. Situation Two: You do not currently own a car and have no auto insurance. If you are a true urban dweller or a student who may not be covered by someone else (i.e. a graduate student no longer covered by your parents’ policy), you still have

options to make sure you have appropriate insurance coverage when joining a car share program. In this case you should talk to a Trusted Choice® insurance agent about a Named Non-Owner Policy, which provides you with insurance coverage for liability, medical payments and uninsured motorist coverage, in addition to the coverage you have as a member of the car-share program. It’s important to recognize, though, that this type of policy would not provide additional coverage for physical damage to the car beyond what you have as a member of the car share program, though additional coverage for physical damage may not be necessary. It’s best to review your options with a Trusted Choice® agent. Insurance and Bike Share Programs Unlike car share programs, most bike share programs do not provide you with any insurance as part of the membership, so it’s important to understand how other insurance policies you may have would apply. In most cases, if you were in an accident involving a bike from a bike share program, your homeowners insurance or renters insurance would cover your liability if you were to injure someone with the bike. Damage to the bike would typically be covered if it was a result of another vehicle or vandalism, but it may be subject to a deductible, which could exceed the cost of the damage. If the bike is stolen while it’s in your possession you should be covered for theft, but it’s important to report the theft both to the police and to the bike share program as soon as you are able. Finally, make sure when you use a bike, you return it in a timely fashion, as some of the bike share programs will consider a bike “stolen” if it is kept for more than 24 hoursand they could subject you to a replacement fee for the bike, which would not be covered by your policy. It’s important to make sure you’re aware of what your homeowners or renters policy will and won’t cover as it relates to participating in a bike share program by reviewing your homeowners or renters insurance policy with a Trusted Choice® agent. Care About What You Share The best way to enjoy car and bike share programs is by obeying the terms, conditions and rules of the program, and the best way to feel confident on the road is by making sure you have the right insurance coverage. Whether you’re a weekend warrior, have a son or daughter away at college or are an urban professional, make sure you’re covered appropriately by speaking with a Trusted Choice® independent agent.

Summer 2012 • THE BIG “I” VIRGINIA

Sales vs. Customer Service

Natural Conflicts in the Workplace

By Claudia St. John, President, Affinity HR Group

client called recently with a major worry. “We have a big problem with our customer service representatives (CSRs) not getting along with our sales people. Our CSRs are not being supportive of the new insurance agents that we just hired,” she shared. “If our company is to survive, we need these new agents to be motivated and productive and I’m worried they may quit. Can you do anything to help?” Ah yes, the old “customer service vs. sales professional smackdown” – a frequent source of headache for many companies. So why does it happen and how can it be resolved? The simple answer to why these breakdowns occur relates to behavioral style. Behavioral styles are the natural ways that individuals process information, make decisions, solve problems, and relate to one another. We all have behavioral preferences and there is no such thing as a “right” or “wrong” style. That said, certain styles do have competing preferences and, unfortunately for my client and others like her, clashes in style between sales and customer service professionals are often result. One tool for assessing personal behavioral preferences is the DISC assessment. It is the brainchild of William Moulton Marston, who also created the lie detector and the Wonder Woman comic book character. Fascinated with the way our personalities affect workplace performance, 44

THE BIG “I” VIRGINIA • Summer 2012

in 1923 he developed an inventory of personal behaviors and classified these behaviors into four basic categories: Dominant (problem solvers), Influencer (people oriented), Supporter (team players), and Controller (process oriented) – hence the acronym DISC. According to Target Training International, Inc., three quarters of successful sales professionals are either highly Dominant, Influencers or some combination of the two. These behavioral preferences make them wonderful at what they do – they are friendly, establish relationships easily and are confident, enthusiastic, articulate and strategic. They are also competitive, extroverted, have a high sense of urgency and are able to handle adversity with optimism. This makes them natural born sellers. They also are not detail oriented and require frequent change and personal interactions to be happy. Meanwhile, most CSRs are natural Supporters and Controllers, opposites from Dominant and Influencer types. CSRs are organized, structured and methodical. They are logical thinkers, detail oriented, good listeners by nature and are very private. They don’t like change, are introverted, have a low sense of urgency and need time to process information and make decisions. They are the ones that get things done. And this is where the conflict arises. While the sales agent has a high sense of urgency and is willing to take

risks, the customer service representative is committed to processing all that is on his or her plate in an orderly fashion. The CSR is naturally risk averse and made uncomfortable by the fast-acting, fast-talking sales professional. Despite these differences, the two rely upon each other. Without the vitality, confidence and energy of the sales agent, there are commissions or revenues. And without the CSR’s eye to detail and commitment to process, sales agent would be forced to execute their own orders – something they are behaviorally ill-equipped to do. Fortunately, there are some things you can do to help bridge these differences and ensure your teams function well: 1. Understand style – Most conflicts that exist between sales people and CSRs relate to behavioral preference, not personal animosity. The CSR’s lack of urgency isn’t because he or she doesn’t care, nor is the sales professional’s “dump and run” an act of disrespect – instead each is simply hard-wired to be this way. By understanding these things about each other, your team can begin to appreciate both their differences and value that each brings to the company.

COMMITMENT A PROMISE WE DON’T TAKE LIGHTLY

“Volunteerism is a rewarding commitment. This same feeling of gratification comes from my 16-year career in the insurance industry, working with experienced managers and underwriters and assisting our agents in being successful.”

2. Appreciate differences – I have yet to meet a CSR that would be happy prospecting for new clients. Likewise, few sales professionals would be fulfilled by the detail work required of the CSR position. Try to change the dialogue from conflict to appreciation. When sales and CSR teams have the opportunity to express their appreciation of each other, it leads both to deeper recognition and improved morale. 3. Learn to flex – Encourage your teams to flex to accommodate the style of each other. How can your CSR accommodate the sales professional’s difficulties with details? How can sales people accommodate your CSR’s seemingly low sense of urgency? They can’t change each other (despite their greatest efforts), so they should learn to accommodate each other.

Chuck Craycraft Branch Manager in Westerville, Ohio—and Habitat for Humanity volunteer Connect with Chuck on LinkedIn!

4. Repeat steps 1-3 – Don’t make conversations about style a one-time occurrence. Use them every time important conversations occur- either in conflict or in celebration. Understanding style is a powerful management tool. With a better appreciation of behavioral strengths, weaknesses and differences, your sales and customer service teams will transform. I guarantee it. Affinity HR Group is IIAV’s human resource and partner. To learn more about their services visit www.affinityhrgroup.com.

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Summer 2012 • THE BIG “I” VIRGINIA

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