Oregon Agent | Summer 2021

SUMMER 2021 OREGON AGENT

Join us at

INSURCON 2021

October 10th-12th

Eagle Crest Resor t | Redmond, Oregon

Question: Is writing E&S insurance always this difficult?

Answer: Not if you come to Griffin.

P: 800.562.8095 I F: 425.453.8696

We make it EASY!

Griffin Underwriting Services has the expertise, customer service, and product availability to help you navigate the excess and surplus lines market with ease.

submissions@gogus.com Serving over 2,200 agents throughout Washington and Oregon, and a proud supporter of IIABW.

“I love spending hours trying to quote online.”

SAID NO AGENT EVER. No agent ever said they enjoy wasting time.

But they have said fast online quoting with a clear understanding of appetite is key to a successful partnership.

UFG Insurance listened.

Welcome to a better way to work online — because you deserve it.

BOP-Pro Get down to (small) business with this robust businessowners policy, including select endorsements to take coverage to the next level.

Pro-Quote Get from start to bind with fast efficiency thanks to smart tools and straight-forward appetite within this enhanced quoting experience.

Simple solutions for complex times

UFG’s rejuvenated online experience isn’t about being better than others — it’s about being better for agents like you. Explore our simple solutions for complex times and experience service aimed to exceed expectations.

ufginsurance.com/online © 2021 United Fire & Casualty Company. All rights reserved.

CO N T E N T S JOIN US FOR INSURCON 2021!

Big I Oregon Office 6 Centerpointe Drive, #430 Lake Oswego, OR 97035 Phone: 503-274-4000 Fax: 503-274-0062 Toll Free: 866-774-4226 Big I Oregon Staff Tyra Dressel | Executive Director tyra@bigioregon.com LeeAnn Smelley | Director of Member Services LeeAnn@bigioregon.com Melissa Reed | Director of Agency E&O oregoneoteam@bigioregon.com

Mark your calendars for our annual convention on October 10th-12th. Join us in-person at the Eagle Crest Resort in Redmond, Oregon.

PRESIDENT’S MESSAGE....................................5 Digital Innovation STRATEGIES.................................................................8-9 All in With Trust THE DIRECTOR’S CORNER..............................10 Save the Date: InsurCon 2021 AGENCY GROWTH..................................................18-19 The Next Normal: Staying on Top of Your Relationship Building Game VIRTUAL UNIVERSITY...........................................22-23 COVID and the Cost of Building Materials

April Pitz | RLI Administrator April.Pitz@iiaba.net

E&O.....................................................................................25-26 E&O, ADA Compliance, Customer Experience: Reviewing an Agency Website

Roger Beyer | Big I Oregon Lobbyist roger@rwbeyer.com

GOVERNMENT AFFAIRS....................................28-29 Virtual Oregon Legislative Update

A DVE RT I S E R I N D E X ACUITY...........................................................20 acuity.com

Mutual of Enumclaw...................................31 mutualofenumclaw.com

Applied Underwriters.................................32 auw.com/us

Risk Placement Services............................13 rpsins.com

Aspera Insurance Services........................26 asperains.com

Rothert Insurance.......................................9 rothertinsurance.com

Berkshire Hathaway GUARD.....................19 guard.com

UFG..................................................................3 ufginsurance.com

Griffin Underwriting Services..................2 goGus.com

Western National.........................................10 wnins.com

Imperial PFS.................................................23 ipfs.com

For more information on advertising, contact Kaylyn Zielinski at kaylyn@iiaw.com.

The Oregon Agent is a publication of the Independent Insurance Agents and Brokers of Oregon and is published quarterly by Independent Insurance Agents of Wisconsin. Big I Oregon reserves the right in its sole discretion to reject advertising that does not meet Big I Oregon qualifications or which may detract from its business, professional or ethical standards. Big I Oregon and IIAW do not necessarily endorse any of the companies advertising in the publication or the views of its writers. The publisher cannot assume responsibility for claims made by advertisers, context provided by the editor, or for the opinions expressed by contributing authors.

4 | SUMMER 2021 |

D I G I TA L I N N OVAT I O N

PRESIDENT’S MESSAGE

The Summer of 2021 will be one for the history books, as we round the corner in Oregon with Covid 19 restrictions and after many month’s of what psychologists By: Mark Atkinson call “languishing” Big I Oregon President some where between Atkinson Insurance Group depression and hope, we can finally see the light at the end of the tunnel.

While life may not be quite the same there are many things we have learned during this pandemic.

Covid-19 put us to the test of the century, and I am proud of how we were able to adjust and pivot during an extraordinary time. I recognize that so many businesses have been negatively impacted, many to the point of closure. This time has reinforced that our industry is uniquely resilient and vital. This is a little ironic given that our industry has historically been seen as slow to change and innovate. We have always been the trusted advisers to our clients. But for the past year we have been the “reassurers” as well as the focus of a spin-off industry, InsurTech.

Atkinson Insurance Group has prided itself in being innovative in the digital space. A recent report released on the Rise of the Digital Insurance Agency, a study commissioned by Liberty Mutual and Safeco Insurance, surveyed 600 independent agents and brokers and have concluded staggering support for agency digitization.

• The customer of the present and the future will demand a better client experience. One that is uniquely possible through the independent agency channel’s ability to blend deep personal relationships and competent advice with streamlined client experiences that can only be offered through maximizing digital capabilities in service of the insurance consumer.

• Digital Adoption leads to faster growth

• Low digital adopter agencies average

growth rate year over year was 7.4%

compared to high adopters growing at 12%.

• This means highly digital agencies grow at a

60% higher growth rate.

• Growth is driven through various digital

capabilities:

• Social Media Marketing and interface

• Online Quoting capabilities

• Self Service Portals

• Live on-line chat capabilities

• Paid Social Media Ads

• Video Quotes and policy reviews

• AI and Chatbots • Marketing will hit its tipping point in the transition to digital in 2021

• 81% of high digital adoption agencies plan to increase their digital marketing efforts but more importantly, 48% of the low digital adopters are planning to increase their digital marketing efforts.

• COVID has proven to the doubters that they truly can and MUST learn to sell and service clients in a more digital and virtual way.

• Video remains a largely untapped opportunity

• Much of the Insurtech solution sets to date

have focused on data and workflow

efficiencies but there is a growing trend to

use more video to create deeper client

connections and develop a sense of trust

that is not as easily portrayed by a photo or

written words.

• Digital agencies can invest more in the customer and employee experience

• High Digital Adoption Agencies are hiring at

twice the rate of Low Digital Adopters and

they are increasing their geographic area

from which they draw new clients.

As the president of Big I Oregon I am extremely excited about the future of our association as they constantly are investing in resources that enhance and support growth minded agencies to be better and do better for their clients. Big “I” has rich resources for agencies of all sizes through ACT (Agency Council for Technology). This includes the industry’s leading technology with blueprints on customer experiences, cybersecurity and disaster planning as well as addressing many of the areas of expertise including social media marketing through Trusted Choice. This is indeed a time for stretching our capacity and realizing our greatest potential.

Connect with Tyra Dressel our Executive Director or LeeAnn Smelley our Membership guru to see how you can supercharge your agency through utilizing your Big I Oregon Membership! | SUMMER 2021 | 5

BOARD OF DIRECTORS 2021 EXECUTIVE COMMITTEE

MARK ATKINSON

LYNDSAY KOOISTRA

RUSS SCHWEIKERT

President President, Atkinson Insurance Group Portland, Oregon 38 years

President-Elect Shareholder, LaPorte Insurance Portland, Oregon 19 years

Vice President Ashland Insurance, Inc. Ashland, Oregon 27 years

DEBBIE FLORES Immediate Past President KPD Insurance, Inc. Springfield, Oregon 35 years

BOB ROSSON

ED DAVIS

Finance Chair President, Timmco Insurance Portland, Oregon 27 years

National Director Maps Insurance Services Salem, Oregon 56 years

BOARD OF DIRECTORS

TYRA DRESSEL

TJ SULLIVAN

MICHELLE GALLARDO

Executive Director Big I Oregon Lake Oswego, Oregon 28 years

Legislative Chair BH Insurance Salem, Oregon 24 years

NextGen Chair The Partner's Group Portland, Oregon 17 years

6 | SUMMER 2021 |

BOARD OF DIRECTORS 2021 (CONTINUED...)

DALLAS ROSS

KRISTON CORRELL

TIM CUNDARI

PayneWest Insurance Group Personal Lines Account Manager Beaverton, Oregon 7 years

JUUL Insurance Agency North Bend, Oregon 23 years

Cundari Insurance Portland, Oregon 26 years

TRISH FULWILER

GREG HORNER

MARTY KANTOLA

J.D. Fulwiler Insurance & Co. President Portland, Oregon 24 years

Insurance Partners, LLC Commercial Lines Producer Portland, Oregon 31 years

Chet Hill Insurance Owner Ashland, Oregon 37 years

STEVE LACESA

MATT PIDCOCK

JOHN POWELL

Oak Tree Insurance Owner/Agent Lake Oswego, Oregon 37 years

Valley Insurance Co-Owner LaGrande, Oregon 17 years

Hopp Insurance Owner/Agent Newberg, Oregon 11 years

BRETT SLATER

STEPHEN SMELLEY

JENNIE WEILAND

Slater & Associates Insurance, Inc. Tualatin, Oregon 28 years

Goldfinch Consulting President & CEO Beaverton, Oregon 34 years

PayneWest Insurance Managing Director, Small Busines Beaverton, Oregon 20 years

| SUMMER 2021 | 7

STRATEGIES

ALL IN WITH TRUST: NEGOTIATE BETTER DEALS, INCREASE CONFIDENCE, AND BUILD BETTER RELATIONSHIPS

Trust is regarded as one of the most critical and essential ingredients in By: Pamela Barnum business, especially M.P.A., J.D. in collaborative Trust Strategist & Nonverbal Communications Expert buyer and supplier relationships like insurance. Unfortunately, trust is eroding at a catastrophic rate around the world. It has become much harder to discern what is and isn’t true. We must work to rebuild trust within our organizations.

Businesses communicate trust with their everyday actions. Insurance professionals who communicate trust to their customers, employees, and shareholders build lasting and mutually beneficial relationships.

Research confirms that most of our communication is nonverbal and that trust is primarily expressed by what we don’t say. Nonverbal communication, or body language, is an elaborate secret language used by everyone but fully understood by few. Those who are fluent in this secret language build trust and gain influence faster than their competitors.

1. Power posture. Sitting or standing with good posture signals confidence and reliability. Here’s an insider tip; if you’re offered a selection of chairs, choose the straight-backed chair over the comfy sofa to maintain your posture better.

2. Allow silences. There is nothing wrong with a bit of silence, and it doesn’t have to be awkward. Use silences to your advantage. For example, allow a beat in the conversation to show that you listened. Silences allow for consideration, and they show that you’re confident.

3. Impeccable manners. Our nonverbals often convey messages of respect, or a lack thereof. Attending a meeting late could be interpreted as disrespect for the person you’re meeting, or at the very least, that you’re disorganized.

Integrity means behaving in a way that is consistent with your values.

Communicating integrity through facial expressions and gestures is cost-effective and easy to implement.

Without investing additional time or money, nonverbal techniques that express confidence, integrity, and empathy are used to increase influence and build trust with customers, employees, and stakeholders.

Eye contact is one of the most valuable indicators of integrity because it can signal interest, openness, and honesty.

To effectively establish eye contact, the research recommends:

Confidence can be expressed nonverbally in several ways that build trust without appearing brash or arrogant.

1. Use the 50/70 rule. Maintain eye contact for approximately 50% of the time while you’re speaking and 70% of the time while you’re listening.

8 | SUMMER 2021 |

2. Establish eye contact immediately.

Before you begin speaking, focus on the listener’s eyes and do not look down or away.

3. Practice. Excellent eye contact comes naturally, so some, but for others, it is a challenge. Practice looking at an eyebrow or space between the eyes and mouth.

Empathy is critical in building trust with others. Using empathetic body language facilitates openness and creates an environment that encourages collaboration over competition.

Try these simple strategies to communicate empathy and build lasting trust with others: 1. Move from behind your desk. Removing a perceived barrier increases empathy and creates a bond of trust naturally.

2. Smile. A Penn State University study found that people who smiled were perceived as more likable, competent, and empathetic, and as a result, were better paid.

3. Mirroring is adopting similar gestures, expressions, and temperaments, and it is one of the fastest ways to express empathy and build trust.

For more in-depth techniques and strategies, join Pamela Barnum at the Big I Oregon InsurCon 2021.

INSURCON 2021: October 10th-12th Eagle Ridge Resort Redmond, Oregon

Helping Big I Producers find insurance solutions for 60 years!

Commercial - Personal - Flood For fast competitive quotes Find us Online, Email, or Call your Rothert Insurance Underwriter Today

800.452.7726 TOLL FREE | 800.473.8731 FAX

|

| SUMMER 2021 | 9

If they can dream it, we can place it.

A TREE HOUSE RENTAL? THEY SAID, “BRING IT.” Every risk starts with a big, bold idea. And at RPS, we believe that every risk deserves the most secure placement. That’s why we never say no when it comes to finding trusted markets for unprecedented business ventures. Let’s talk about what’s new, what’s next and what’s possible.

To learn more, contact: Joe Kelsch 480.758.6503 Joe_Kelsch@RPSins.com www.rpsins.com

RPS 39399 1120

Trusted Choice® MARKETING REIMBURSEMENT PROGRAM Trusted Choice has funds available to help Big “I” member agencies offset the cost of marketing expenses when leveraging the Trusted Choice brand. Members have three ways to access funds: Co-brand with the Trusted Choice logo* General Co-branded Marketing: Up to $750 in reimbursement when co-branding with the Trusted Choice logo on any consumer facing items. This could include Co-brand with the advertising costs, event sponsorship, branded giveaway business cards, store signage, logo has a lifetime max value of $750 per agency location) itemsTrusted and more.Choice (This program Digital Marketing Incentive: Additional $750 in Funds Available for 2021 Only!

Open to all members. Must be used towards digital marketing efforts (video, social or web ads) and must include the Trusted Choice logo. Members can use any of the Trusted Choice customizable campaigns or can create their own ad.

*Co-branding funds and additional 2021 digital marketing funds are reimbursed at 50% of cost to agency with a max of $750 for each option.

Website Upgrade: Receive $500 for building a new site with one of our preferred partners. Partners include ITC, Forge 3, Titan Web, Advisor Evolved and Marketing 360. $500 is a flat reimbursement and does not require member to spend above that amount. Option 2 reimbursement funds can only be used towards new websites created in 2021 and excludes add on services.

TrustedChoice.com Advantage Subscription Upgrade your agency’s listing on our lead generation site trustedchoice.com to an Advantage profile and start getting referrals today. Upgrading will give you a premium profile and allow your agency to begin receiving leads of active insurance shoppers.

Trusted Choice will reimburse you $125 if you purchase an annual subscription.

For full program details or to submit a reimbursement request visit trustedchoice.com/agents today! | SUMMER 2021 | 11

THE DIRECTOR’S CORNER

SAVE THE DATE: INSURCON 2021 By: Tyra Dressel Executive Director of Big I Oregon

It is an old adage that to work for an association, you wear many hats. And as your Executive Director, I can honestly say that this adage holds true. While we have had to deliver our value differently during COVID times, the importance of supporting our members has never been more crucial. We continue to work diligently to bring added resources and advocacy to our agency members.

Almost a year and a half has passed since we made the decision to move to a virtual version of “MidWinter” Education Symposium in March 2020. As an association, I have been proud of our ability to pivot, connect and engage with our members in meaningful ways. However, I’ve grown increasingly nostalgic for the days when having in person gatherings were second nature and the cornerstone of our association.

I am thrilled to announce (at the writing of this article) that we are pressing forward full steam ahead with the planning of InsurCon 2021! We are taking advantage of the forced hiatus, to reinvent the Annual Convention, to be more interactive and network based with ample opportunities to interact with our Premier Partners, fellow agencies and the leadership of Big I Oregon. We purposely moved the date from the traditional August timeframe to October 10th – 12th to allow ample time for our state to get back on its feet from COVID-19 restrictions. While we have all gained new skills and appreciation for remote work, virtual gatherings and social distancing, InsurCon2021 will be the event of the year.

12 | SUMMER 2021 |

InsurCon2021 will blend the favorites of Annual Convention while fusing it with a twist. Big I Oregon continues to value high quality education offerings and over the past year we have looked critically at the future of how we deliver our continuing education.

Overwhelmingly the current direction is online and the ability to offer variety and the convenience of timing that works with your schedule. We are excited to give, with every full registration, an education voucher for six (6) hours of CE to take at your convenience ($144 value). We will still have an Ethics course during InsurCon2021, but we are moving to a more fluid event providing multiple “workshops” with topics that are most intriguing to your business such as the digitization of our industry, Insurtech and a panel discussion of the future of our industry with leaders from companies and agencies interacting with Q&A. And, of course, we’ve weaved in high energy fun with a “Kentucky Derby” opening night and a full “Casino” Monday night. So go “All In” and join us at Eagle Crest, October 10th – 12th.

A recent high note, here at your association, occurred when Swiss Re Corporate Solutions awarded Big I Oregon the Insurance “Ninja” award for being in the top eight states with a policy retention rate of over 95%!! We can’t say enough about our quality E&O program and everyone who is a part of it. If you’re not one of the lucky ones who already take advantage of this incredible member program, reach out to Melissa Reed today, oregoneoteam@bigioregon. com. She will be happy to help you become part of this amazing program.

I greatly miss seeing all your smiling faces in person and can’t wait to see you in October for InsurCon 2021!

YOUR CLIENT LOOKS PRETTY CONFIDENT.

Their business must be protected

by Western National Insurance.

Western National carefully crafts policies to fit your client’s unique business insurance needs – so they can feel confident in their coverage.

www.wnins.com

THANK YOU DIAMOND PLUS

DIAMOND

PLATINUM

14 | SUMMER 2021 |

2021 PREMIER PARTNERS

GOLD

SILVER

BRONZE Acuity Insurance Chubb CNA First Insurance Funding Markel Mid Valley General Agency

Mutual of Enumclaw Nationwide Sublimity Insurance Superior Underwriters United Fire Group Western National Insurance | SUMMER 2021 | 15

Eagle Crest Resort Redmond, Oregon

Pamela Barnum TRUST STRATEGIST & BODY LANGUAGE EXPERT

I NSURCON 2 021 AL L RO A D S L E A D T O B IG I OR E G ON' S AN NU A L C O NV E NTION. WE HA V E E L E V ATED T H IS PRE M I E R INS U RA NCE E V E NT IN THE ST AT E . C O M E C O NNE CT AND E NG A GE " INPE RS ON " W I T H I ND US TRY L E A DE R S A ND EXPER T S !

October 10th-12th, 2021 | Eagle Crest Resort, Redmond, Oregon 16 | SUMMER 2021 |

OREGON

MEET

OUR

MONDAY

MORNING

Patrick Galvin

HEADLINERS

CEO,

W E A R E D O U BL I NG -D OWN AND B R IN GIN G Y O U 2 WORL D C L AS S PR ES E NTE R S , P AME L A B AR NU M & P ATRI C K G AL V IN TO T A K E Y O UR BU S INE SS TO THE N E XT LE VEL !

"THE

CHIEF

GALVINIZER

CONNECTOR'S

WAY"

& "TRUST

WAY"

GOLF TOURNAMENT WINE TOUR & TASTE

OREGON

92nd Annual Convention InsurCon 2021

"All In" Casino-Themed A N N U A L C ONV E Event NTION REGISTER ONLINE R EGI S T E R TO D A Y TODAY ON L I NE AT: A T: bigioregon.com

www.bigioregon.com-insurcon2021

NEXTGEN PUTT PUTT INDUSTRY FUTURE PANEL EXHIBITOR SHOWCASES 6 HOUR CE VOUCHER NETWORKING NIGHTS KENTUCKY DERBY CASINO

REGISTRATION PRICES UNTIL 7/1/2021: Prices Until 7/1

Member

269

NextGen

99

Non Member

325

Member Exhibitor

995

Questions? Contact leeann@bigioregon.com | SUMMER 2021 | 17

AGENCY GROWTH

THE NEXT NORMAL: STAY ON TOP OF YOUR RELATIONSHIP BUILDING GAME By: Patrick Galvin Chief Galvanizer

With nearly half of 2021 in the rear view mirror, there is light at the end of the tunnel. Coming into focus is a clearer idea of what the “next normal” will look like both personally and professionally.

There is no denying that the pandemic has altered the way we live and work, possibly forever. What remains unchanged, however, is the importance of building and maintaining strong relationships— something that independent insurance agents and brokers pride themselves on.

But what will relationship building look like in a post-pandemic business environment where there are fewer in-person transactions and more hybrid events, and where more agency employees choose to continue working from home for better work-life balance?

18 | SUMMER 2021 |

These are some of the questions that I will pose in an interactive, 60-minute discussion with a panel of Big I Oregon agency owners on Tuesday, July 13, 2021 (10-11 AM). We will discuss: • Building strategic relationships while working remotely • Leveraging technology to generate the energy and enthusiasm required for authentic connection • Mastering video conferencing to build meaningful relationships • Creating opportunities to connect with others online • Asking for and receiving reviews, recommendations, and referrals to grow your agency • Using low and high-tech approaches to show gratitude and build goodwill Agency owners will share their relationship building strategies and stories, and attendees will have multiple opportunities to connect and engage using breakout rooms and other collaborative online tools.

(If you joined us for the NextGen panel presentation in April, you know that this will be a dynamic and lively virtual event.)

Additional Tools at Your Disposal

Last but certainly not least, I am excited to announce that I will be presenting on the topic of trust-based relationship building at InsurCon 2021 in October. Taking place at the beautiful Eagle Crest Resort in Redmond, Oregon, the convention will be a welcome chance to connect with people face to face and I look forward to seeing you there.

You can learn more about the July event, part of a year-long partnership between myself and Big I Oregon focused on helping members hone their professional relationship building skills, at www. theconnectorsway.com/bigioregon.

This is also where you will find details about The Connector’s Way Online System, a library of 52 online video lessons based on the principles from my book The Connector’s Way (which features an independent insurance agent as its main character). Designed to sharpen the relationship building skills of everyone in your agency, the system features a clean modern aesthetic that incorporates the latest digital learning standards and lets online learners proceed at their own pace.

Each video is less than 5 minutes long and includes downloadable resources and exercises to reinforce the materials presented.

Patrick Galvin (patrickgalvin.com) is a TEDx speaker, presenter, and business relationship building coach who wrote The Connector’s Way: A Story About Building Business One Relationship at a Time (2016) and The Trusted Way: A Story About Building a Life and Business of Character (2021). Patrick is collaborating with Big I Oregon and its partners to give agency members exclusive access to the curriculum and materials of The Connector’s Way in 2021. Learn more at https://www. theconnectorsway.com/bigioregon

Commercial Personal Lines We offer insurance solutions for homeowners and for small, medium, and large businesses with competitive pricing, an easy submission process, and the opportunity for multi-product discounts. Visit www.guard.com to see what we can do for you.

Businessowner’s Commercial Auto Commercial Umbrella Homeowners

Personal Umbrella Workers’ Compensation Pay-As-You-Go options with over 200 payroll partners!

Not all Berkshire Hathaway GUARD Insurance Companies provide the products described herein nor are they available in all states. Visit www. guard.com/states/ to see our current product suite and operating area.

APPLY TO BE AN AGENT: WWW.GUARD.COM/APPLY AmGUARD • EastGUARD • NorGUARD • WestGUARD

| SUMMER 2021 | 19

TOP FIVE REASONS AGENT’S LOVE

WORKING WITH US! 1 2

Dominic Vaandering Territory Director - Oregon 503.724.7621 dvaandering@acuity.com

Acuity has a 20year track record of beating the industry by more than double the growth and a full eight points on the combined ratio.

Unparalleled Financial Strength

COMPANY FOR

World-Class Claims Service

3

Responsive and RelationshipBased Underwriting

4

Stable and Consistent Market

5

Impeccable Culture Interested in representing Acuity?

Contact Dominic today or visit acuity.com/partnership

20 | SUMMER 2021 |

RATED #1 WORK-LIFE

BALANCE DURING COVID-19

Consistently recognized as one of the best places to work in the nation.

NEED A MARKET FOR “TOYS?”

For your clients who work hard and play hard, Big “I” Markets can help you cover a wide range of leisure craft, including: RECREATIONAL VEHICLES MARINE MOTORCYCLES SNOWMOBILES JET SKIS CAMPING TRAILERS Product availability and coverages vary by state.

VISIT WWW.BIGIMARKETS.COM.

June 2020

VIRTUAL UNIVERSITY

COVID AND THE COST OF BUILDING MATERIALS By: Stuart Powell Independent Insurance and Risk Management Consultant and Executive VP, Northport Affiliates, LLC

Several months ago, I had a new roof put on my house (by the way, I paid for the new roof and did not make an insurance claim) and was shocked by the cost estimates. The roofer explained that the cost of shingles had increased substantially over the last year due to production interruptions caused by the Covid response.

Just this week I was informed that the price of lumber has also tripled over the past year. Hopefully, this is a short-term situation, but it does raise a concern regarding the cost of construction compared to the property limits provided by a given f insurance policy. Granted, not all property losses are total losses, however significant increases in construction material could affect a large property loss, possibly exhausting the available amounts of coverage.

What coverage options are available to mitigate a situation of rapidly increasing construction costs?

Homeowners’ Within the homeowners’ program, two options are available: • Attach the Inflation Guard Endorsement; and/or • Attach one of the two “Additional Limits” endorsements.

Inflation Guard (HO 04 46) The inflation guard endorsement increases the initial policy limit on a pro rata basis throughout the policy period.

Unfortunately, choosing an inflation percentage is a lagging indicator and is a guesstimate that may not predict the increases from an event like a pandemic interrupting the material supply chain.

Depending on the inflation guard percentage chosen, the additional premium for inflation guard protection can range from a 2 percent increase to about 6 percent.

“Additional Limits” Endorsements Two “additional limits” endorsements are available; both allow the insured to purchase an additional amount of coverage AFTER a loss occurs.

22 | SUMMER 2021 |

The two available endorsement are: • Additional Limits of Liability for Coverages A, B, C and D (HO 04 11). This endorsement allows the policyholder to purchase the necessary amount of additional limit for Coverage A to equal the property’s replacement costs after the loss.

Increasing Coverage A automatically increases Coverages B, C and D when this endorsement is attached; or • Specified Additional Amount of Insurance for Coverage A (HO 04 20). This endorsement allows the policyholder to buy up to a specified percentage of the Coverage A limit only. If the specified limit is 25% and the policy Limit of Insurance for Coverage A is $300,000 then in the event of inadequate insurance after a loss the policyholder would have the option to buy the necessary additional coverage limit for replacement cost up to $75,000. Two percentage options are available, 25% and 50%, but some carriers may not allow the use of the 50% option.

Of the two, the Additional Limits of Liability for Coverages A, B, C and D is the preferred option because it allows the insured to purchase whatever additional amount is necessary and all other coverage limits increase in relation to the new Coverage A limit. However, some homeowners’ insurance carriers will not use the HO 04 11, limiting the insured to only the HO 04 20.

One major advantage of both additional limits endorsements is the removal of the insurance-to-value (often referred to as the coinsurance) provision in the homeowners’ policy. When either of these endorsements is attached, the insured is not subject to the provision.

As expected, attaching either of these endorsements increases the premium. Use of the HO 04 11 increases the premium approximately 15%; attachment of the HO 04 20 increases the premium between three and six percent depending on which percentage option is chosen (25% or 50%).

Commercial Property For commercial property exposures, there is no option to purchase an “additional limits” type of endorsement.

However, blanket coverage for multiple buildings and business personal property does allow coverage to expand beyond the building limit scheduled on the Statement of Values. In theory, the entire blanket limit could be expended on one component of covered property.

But use of the blanket option does not automatically avoid a coinsurance problem. However, coinsurance can be suspended by using Agreed Value. Blanket Agreed Value is a favored approach to the limits problem and the coinsurance problem.

Beginning in approximately 2007, insurers began attaching an endorsement that diminishes the value of blanket coverage, the Limitation on Loss Settlement-Blanket Insurance (Margin Clause). This endorsement limits the amount available for any one building to a percentage of the amount scheduled in the Statement of Values. For example, a building scheduled in the Statement of Values at $500,000 is damage by a covered cause of loss and the actual replacement cost at the time of the loss is $650,000.

If the damaged building is included on a policy providing a blanket limit of $1,000,000 then, in theory, the full $650,000 replacement cost would be recoverable. However, if the blanket policy is subject to the Margin Clause applying a 120% maximum limit, the recovery would be limited to $500,000 plus 20% - or $600,000. There are some proprietary versions of this type of endorsement that apply a limit per location. Be vigilant when reviewing commercial property policies written on a blanket basis, look for endorsements that can cap the recovery for a given item in the Statement of Values.

One other issue that is not strictly related to the rising cost of building material but was central to a lawsuit against an agent in New Hampshire recently is Ordinance or Law coverage. What the insurance industry understands about the term replacement cost is not what the typical policyholder understands by the term.

What most policyholders want after a loss is, in fact, reconstruction costs not just replacement cost.

If the insurance policy does not pay the full reconstruction cost of the damaged building, the policyholder may be unhappy with the settlement and think that replacement costs as defined by the insurance policy is not what they thought they were getting. The policy did not meet their reasonable expectation.

Where do you think the jury’s sympathy will lie?

This dichotomy between “replacement costs” and “reconstruction costs” is becoming an issue of growing concern. To protect themselves, agents should make sure that policyholders are advised as to what “replacement cost” means and what its limitation are. Additionally, there should be a discussion and offer of Ordinance or Law coverage.

Some property policies are beginning to include limited amount and coverage for Ordinance or Law as Additional Coverages. But these Additional Coverage may not be adequate. “Fore warned is fore armed.”

Watch Out for the Rising Cost of Building Materials COVID has created issues across the country. One that agents must be aware of is how this pandemic has affected the cost of building material. Supply chain interruptions and increased demand have caused the price of “common” building materials to increase dramatically.

Agents must be prepared to address these issues with the available insurance options beyond updated replacement cost estimators. Offer and use the endorsements available.

Technically, replacement cost, as used in most property insurance policies, replaces the damage structure with new materials.

“You get your old building back constructed with new materials.” But most policyholders do not want their old building back rather they want a new building constructed with new materials. This sounds semantic, but the difference in the old building and the new building are the changes in building codes.

The property insurance policy is designed to pay for things that are damaged by a covered cause of loss. If replacing the damaged building requires building features mandated by building codes but not part of the “old” building, then the property insurance policy does not respond to these new building code mandated features. Additionally, if the undamaged part of the building must be demolished, the demolition of the undamaged part is cause by the mandate of the building inspector, not by the covered cause of loss.

DARREN EVERSOLE | 503.957.5460 | darren.eversole@ipfs.com Copyright © 2021 IPFS Corporation. All rights reserved.

| SUMMER 2021 | 23

Virtual Agency Solutions TRUSTED CONSULTING FOR THE INDEPENDENT AGENT

We know how important it is for you to succeed in business.

Virtual Agency Solutions has created a portfolio of solutions built just for you.

OPERATIONAL EVALUATION Evaluate agency workflows and operational procedures with a customized plan for your agency

VISIT VIRTUALGENCYSOLUTIONS.COM TO START YOUR PERSONALIZED EVALUATIONS.

Explore other Virtual Agency Solutions evaluations:

TECHNOLOGY

STRATEGIC

FINANCIAL

MARKETING

Questions?

Contact Mallory Cornell IIAW Vice President mallory@iiaw.com

E&O

E&O, ADA Compliance, Customer Experience: Reviewing an Agency Website By: Mallory Cornell IIAW Vice President & Swiss Re Approved Auditor

Your agency website is arguably one of the most important tools for marketing. It is your first impression with a client or prospect and an opportunity to stand out from competition.

However, your website does come with some risks. For instance, what you say on your website could be used to show an increased duty to advise during an E&O lawsuit, or it could be the focus of an ADA Compliance violation. Nothing good comes easy, right?

The services described on your website should mirror what you actually do as an agency. If your agency’s website says that you review policies and exposures every year or you provide a risk assessment, it’s critical your agency actually completes those actions or at least offers to do so. Furthermore, words and phrases like “best coverage”, “always/will cover”, “comprehensive”, “team of experts”, “We specialize in…”, “all your insurance needs” can create a standard or duty that may be difficult to defend in the unfortunate event that you find yourself in an E&O claim situation.

These words and phrases will be scrutinized by an attorney if an E&O lawsuit arises.

In other words, an agency website typically is not what “starts” an E&O lawsuit, but it can make it very difficult to defend the claims against you. Your website provides supporting evidence and “promises” from the agency.

But what can you do to prevent this? Swiss Re is aware of the exposures an agency website creates and offers solutions and incentives for proactive risk management of your agency website. An E&O Website Review is an easy way for an agency to have their website reviewed by a risk management professional and update language that can create E&O exposures or be used against them. Contact Big I Oregon oregoneoteam@insureoregon.org for more information about an E&O Website Review.

A separate website risk to consider is ADA compliance and website accessibility. You may have noticed the recent buzz surrounding ADA and Fair Housing Act (FHA) violations as it relates to website accessibility requirements.

Law firms in Florida, California, Colorado and Massachusetts have been targeting insurance agency websites for ADA or FHA violations.

Different law groups will send demand letters looking for quick financial compensation for the allegation that the website is not meeting federal accessibility guidelines.

These lawsuits are not new. The plaintiff’s attorneys have been sending demand letters for years.

| SUMMER 2021 | 25

In the past couple of years, insurance agency websites have been brought into the mix. The attorneys are looking for a quick settlement outside of court for alleged violations of the ADA or FHA guidelines. An important fact to point out is that zero of these cases have been decided in a court of law and very few turn into a lawsuit. That may not always be the case, however, so it is important to stay in touch with your state association if you feel you have been targeted.

You may be wondering, “what is ADA website accessibility?”. Well, nobody knows as there is no case law and or legislation regarding website accessibility rules and the Americans with Disabilities Act was created before the internet was a thing. All that is known is that the ADA is now being interpreted to include websites.

While there are no clear accessibility guidelines, the generally accepted level of care to follow is the Web Content Accessibility Guidelines (WCAG). WCAG 2.1 is the most recent version to follow. These guidelines have the goal of making web content perceivable, operable, understandable and robust.

• Free, most basic widget, likely not close to 95% compliance. - UserWay • Starting at $348/year – Neilson Marketing Services • Starting at $490/year - AccessiBe • Starting at $490/year – UserWay with AI Of course, there are many other options out there. These are just a few of the most popular widgets. Regardless of what path or option you decide, you should take action to make your website more accessible to reduce the risk of an ADA demand letter or lawsuit.

Lastly, it is important to note that more than 7 million people in the U.S. are blind or have a visual impairment. Website accessibility is not something to consider merely from a legal standpoint, it is also a customer service for many Americans looking for insurance.

If you have any questions regarding E&O website exposures or ADA compliance issues – please reach out to oregoneoteam@ insureoregon.org! We are happy to help you find the solution you are looking for.

The issue with WCAG 2.1 is that to be 100% compliant, it likely means to redesign and rewrite an entire website.

The cost associated with redesigning a website to be “ADA compliant” is likely thousands, if not tens of thousands, to meet every WCAG 2.1 requirement. The full WCAG 2.1 guidelines can be found online - it’s only 83 pages long.

While 100% compliance may be difficult, other solutions exist to become up to 95% compliant. Enter the world of Accessibility Widgets.

These are text/website overlays that require you to add a short line of code into your website that creates a small button in the corner for web visitors to click on and modify the webpage to meet their needs. With these widgets, you have options.

26 | SUMMER 2021 |

Response in hours, not days.

Aspera delivers quotes within 48 hours 75% of the time.

Aspera specializes in hard-to-insure risks for small and mid-sized businesses.

Making the hard-to-insure easy to please. www.asperains.com

Insurance Agents Errors and Omissions Coverage That’s Right For Your Business Why Big “I” Professional Liability and Swiss Re Corporate Solutions Prompt, local service: Superior customer service from the IIAW, who serves as your agent with underwriting authority offering prompt turn-around of quotes and policy delivery.

More premium discounts: Qualifying agents can save over 50% in premium discounts including the loss control, claims free, agency operations improvement review, efficiency and carrier concentration credits.

Deductible savings: Loss only deductible available along with deductible reduction feature offering up to 100% savings of deductible (up to $25,000) per claim with proper documentation Claims handling: Prompt and thorough claims handling by an experienced staff made up primarily of licensed attorneys that stand ready to support policyholders with any potential incident and claim.

Agency risk management tools: Policyholders have access to a dedicated E&O Risk Management team at IIAW and online tools for agency risk mitigation.

Exclusive: A Big “I” member exclusive policy form and premium credits filed on a Risk Purchasing Group basis giving Big “I” members tailored coverage.

Member oversight: A Professional Liability Committee including IIABA member agents oversees an directly influences the program. Our program was designed by agents for agents.

Swiss Re Corporate Solutions Policy Form Highlights Big “I” Professional Liability program and Swiss Re Corporate Solutions pride ourselves on offering the strongest coverage form in the marketplace that continues to evolve to meet the changing needs of the agents. Review the preferred policy form and you will find that these are just a few of the coverage benefits: • Rate A+ by A.M. Best • Claims-made coverage with full prior acts available • Limits of liability up to $25 million • Broad definition of covered professional services and activities • Comprehensive definition of insured • Aggregate deductibles available • Defense cost outside the limit • $25,000 1st Party Personal Data Breach • $1,000,000 3rd Party Personal Data Breach sublimit available • 60/40 consent to settle clause • Crisis Management coverage; up to $20,000 per policy period for fees, costs and expenses incurred within 6 months of a crisis event • Deductible reduction up to $25,000 per claim with proper documentation, no limitation to the number of claims • Catastrophe Expense $25,000 per incident, $50,000 per policy period • Regulatory defense $100,000 per policy period in addition to the limit of liability • Several options to earn premium discounts up to 30%

If you have any questions, please contact oregoneoteam@insureoregon.org.

The information provided is for general informational purposes only and you should review the policy form and any applicable endorsements for complete policy language. Please note that all applications are subject to review, underwriting and approval by Westport Insurance Corporation, a member of Swiss Re Corporate Solutions.

28 | SUMMER 2021 |

| SUMMER 2021 | 29

Looking for high-quality CE? LIFE IS TOO SHORT TO TAKE BAD CE

Big I Oregon has partnered with Agents &

Brokers Education Network (ABEN) to offer professional insurance training and continuing education using premier live video webcast technology.

IIAOR.ABEN.TV

Independent agents make for happier, better-insured members.

We know independent agents aren’t tied to any one company, and we rely on the objectivity and expertise that comes from that. It means when an agent recommends Mutual of Enumclaw to a member, it’s because we’re the best fit. And that makes our insurance even better.

We show our support for our agent partners by providing dedicated underwriters, competitive compensation, marketing assistance, industry-recognized claims service, and more.

Thoughtful is how we do things.

To see our helpful tools to connect agents and members, visit www.playbook.mutualofenumclaw.com today.

MORE IMAGINATION.

MORE TO LOVE FROM APPLIED.® Workers’ Comp • Transportation Liability & Physical Damage • Construction Primary & Excess Liability Homeowners Including California Wildfire • Fine Art & Collectibles • Structured Insurance • Cyber • Errors & Omissions Directors & Officers • Environmental & Pollution • Shared & Layered Property • Fronting & Program Business • Reinsurance

...And More To Come.

It Pays To Get A Quote From Applied.® Learn more at auw.com/MoretoLove or call sales (877) 234-4450

©2021 Applied Underwriters, Inc. Rated A (Excellent) by AM Best. Insurance plans protected U.S. Patent No. 7,908,157.