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The Anchor

SPRING 2020

THE INDEPENDENT INSURANCE AGENTS OF RHODE ISLAND MAGAZINE


Trusted Choice® Big “I”

MEMBER RESOURCES

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CONTENTS

SPRING 2020 | DIGITAL RELEASE ONLY

Independent Insurance Agents of Rhode Island

President Perspective ............................................. 7 Executive Vice President Perspective ...................... 9 Case Law Notes.......................................................

13

Legal Briefs ............................................................

14

E&O Corner ............................................................

16

Human Resources Corner ........................................

19

Worker’s Compensation...........................................

20

Government Affairs Update ......................................

22

Marketing Corner.....................................................

24

Emerging Leaders....................................................

28

Special Features

7 Changed Times

216 Possible Coronovirus Claims

24 Crisis Communications

Independent Insurance Agents of Rhode Island Spring 2020 3


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OFFICERS President

Denise T. Smith, CIC

President Elect

Kenneth Thompson, Jr.

Vice President

Michele Calabrese

State National Director

William J. Hunt, CPCU

Immediate Past President

John Kaull, AAI

DIRECTORS Terms Expire 2020

INDEX Trusted Choice ................................................ 2

Terms Expire 2021 Terms Expire 2022

ADVERTISERS

Thomas. J. DiSanto, JD, LLM, CIC Christopher Slocum, CIC, CPIA

EMC Insurance ............................................... 4

Anthony Bucci, Jr., CPCU, AIS Sean P. Daly, CPCU

Big I Advantage

Margaret Longolucco, CIC Joseph Paiva

STAFF Marcia L. Berthiaume, AAI, ACSR, AIS, CPIA State Account Manager, Emerging Leaders Liaison Helen Collins, AAI, AIS, CPIA Director of Professional Liability Sean R. Donaghey, CPCU Senior Vice President, State Account Executive

............................................ 6

Arlington Roe Cyber.......................................... 8 Big I Professional Liability

............................... 12

Servpro®......................................................... 16 Big I Flood . .................................................. 18 JH Communications

........................................ 23

PS&H ............................................................ back

Toni Drowne Communications & Marketing Manager Jack Hutson, CAE Senior Vice President, Business Development Lori Kaufman Executive Assistant, Membership Services Coordinator Maureen McNamara, AIS, ACSR Assistant Treasurer, Director of Finance Mark A. Male, MLIS Executive Vice President, Secretary/Treasurer

EDITOR’s NOTE (SPRING 2020): Due to the ongoing COVID-19 pandemic, we have decided to publish this edition digitally.

Jean E. Nagle, AAI, ACSR, AIS Assistant Vice President, Director of Education Sarah Ribera Assistant Director of Education & Membership The Anchor is published by the Independent Insurance Agents of Rhode Island (IIARI). Statement of fact and opinion is made based on the responsibility of the authors alone and does not imply an opinion on the part of IIARI, it’s officers, directors or members. Subscription rate for members is $15, which is included in dues. Subscription rates for non-members is $75 per year. (single copies $10). Reprint requests should be referred to IIARI. Copyright © 2020 Independent Insurance Agents of Rhode Island. Independent Insurance Agents of Rhode Island Spring 2020 5


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PRESIDENT PERSPECTIVE

Changed Times As quoted from the president and CEO of IIABA, “Life has changed, for you, for me, and for our members”. Our industry will no doubt be impacted in the coming months as policyholders struggle to pay premiums, adjust to new lifestyle changes, and move forward with their decisions about insurance needs. Your association is continuing to keep our members updated regarding carrier impact, loan availability, coverage issues, all while continuing to function as the center for service and other state insurance needs. Aside from the daily unfolding events with the spread of the virus, we are focused on offering more on line courses and continuing our search for new programs, monitoring progress on IMS (Independent Marketing Solutions) which has been delayed just a bit, and reactivating our plan to personally visit agencies to understand your individual needs. As an agency force, we need to think about what comes next. Most of us have lived through several recessions in our lifetime. The future, as we know, is uncertain. However, the young adults who have entered the workforce within the past 10 years may not know what to expect in the coming months or years. There will be bumps in the road; however, we need to reassure our younger generation, our future clients, by educating, nurturing, and guiding them through this road ahead. They will be starting families, purchasing homes, and some will be starting new businesses. They are our future and we need to let them know we are here for them through personal touch.

“Life has changed, for you for me and our members” Please be diligent and practice the appropriate amount of social distancing and face coverings. I look forward when we arrive at a “new normal” and know we will establish new ways of doing things while we wait for a treatment and vaccine. Be safe! One last note. I would like to personally thank Mark Male and the staff of the Independent Insurance Agents of Rhode Island and the Rhode Island Association of Insurance Agents for operating, without skipping a beat, from their homes. They have provided our agencies with guidance as well as continuous updates from the State and as needed.

I received a message from one of my clients just yesterday and it struck me because of what she said. “By the way, just want to say how much I appreciate your hands-on approach and speedy response. My mother growing up always said to have an agent! And she was right! Talk soon”. Besides feeling good about what she said, I loved the fact that she “listened to her mother.” Denise Smith, CIC IIARI President 7

Spring 2020


PROTECT YOUR AGENCY

WITH THE BIG “I” CYBER SECURE PROGRAM You’re in the business of protecting others, but who’s watching out for you? We are. Responding to a breach is a complicated process requiring the assistance of many different professionals. Failing to notify your clients “without unreasonable delay” could cost your agency hefty fines plus additional costs to comply with notification laws, legal liability and reputational harm caused by the breach.

Managing General Agents | Wholesale Insurance Brokers

If handled improperly, this exposure could be devastating to your agency. CYBER SECURE 2020 PROGRAM ENHANCEMENTS: •

Increased Fraudulent Instruction from $100k to $250k

Added Contingent Bodily Injury with Sublimit Endorsement

Increased Funds Transfer Fraud from $100k to $250k

Increased Telephone Fraud from $100k to $250k

Removed Amend Continuity Date - implemented use of no known loss letter

NEW Endorsement: Computer Hardware Replacement Cost (akabricking). Sublimit: $100

Increased Criminal Reward from $25k to $50k

Updated Post Breach Remedial Services Endorsement- better explains the services

Increased Consequential Reputational Loss sublimit to Match

Removed PCI verbiage under Risk Controls section; PCI will be added for every risk

Elected Limit. $2M aggregate limit will only have $1M max

Amended the Definition of Dataremoves the requirement for regular back up.

Updated Endorsement: Voluntary Shutdown Coverage - updated version to remove the requirement for the underwriter’s prior written consent

NEW Endorsement: Invoice Manipulation Coverage (Sublimit: $50k) indemnifies the Insured Organization for Direct Net Loss resulting directly from the Insure Organization’s inability to collect payment for any goods, products or services after such goods, products or services have been transferred to a third party as a result of Invoice Manipulation that the Insured first discovers during the policy period.

Added Other Insurance Clause Endorsement - Primary With Respect to First Party Loss

NEW Endorsement: CryptoJacking Endorsement (sub-limit: $100k) This endorsement covers financial loss incurred by the insured

organization for additional utility costs as a result of crypto jacking

PROGRAM TAKEAWAYS •

Exclusive Membership Program

Notification on record count

3 Aggregate limits

Coverage for accidental release of PII

Coverage for dependent business interruption

Coverage for fraudulent instruction

Cryptojacking coverage Invoice manipulation

Extortion payment for eCards

CONTACT FOR MORE INFORMATION Helen L. Collins, AAI, CPIA Director of Professional LiabilityPrograms 401-732-2400 | Helen.collins@iiari.com


EXECUTIVE VICE PRESIDENT PERSPECTIVE

Agency Pandemic Issues When IIARI first alerted membership about

the coronavirus (COVID-19) by email on February 28, it may have felt like much to do about nothing. Little did anyone know how or comprehend how much this would change our lives – everyone’s lives – and hurl the world into uncharted waters. No one has been immune from the fallout - personal to economic - and there is no clear end in sight. From an Association perspective, the initial flow of communication began as small bits and pieces and quickly evolved into a tsunami of information. We endeavored to separate the wheat from the chaff and provide the most important and imperative information needed to navigate the storm. While the storm still rages it will take more collected data and

“Acting responsibly means even more now as your customers will rely on you for counsel and direction. ”

analysis to shed some clear light on the spread of the virus. Until then we will move forward very slowly, cautiously, and with some fear and trepidation. Regardless of the those who chant about the infringement on personal liberties and freedoms, the harsh reality is no one wants this virus – I do not want this virus. To some the precautions being taken are over the top and ridiculous, but to err in this case might be fatal. We’ve had to cancel our convention for the first time in over 100 years. This was not a decision that the IIARI Board took lightly. We closely monitored the situation (and guidelines set by the state) and decided that cancelling the convention for 2020 was the only course of action. Over the coming weeks and months we will offer RI Agents Live, an eLearning series that will allow you to secure the CE credits you would have obtained by attending our annual event. Stay tuned for more details! We are fortunate to be in an industry that should sustain throughout the pandemic, but we are not immune either. If a second wave befalls the nation, our state, and our world, the economic reality will reach us all. Customers will not be able to afford the basic coverages they need to exist, and the domino effect will begin. Bright future, huh? Do not despair. We have a role to play as the country and world begins to reopen. It is incumbent on us to do all we can to ensure our employees safety and our customers. Acting responsibly means even more now as your customers will rely on you for counsel and direction. We have a role and it is to be strong and vigilant in our commitment to safety.

Robert J. Pettinicchi, Mark Chief Male Lending officer, Executive Vice President Independent Insurance Agents of Rhode Island Spring 2020 9 Insurbanc


Thank you! 2020 IIARI PARTNERS

Without their continued support, the ability to deliver membership benefits would be significantly compromised. Please help us thank them for continuing to support us over the year.

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Spring 2020

The Anchor


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GET WISE about your agency RISK MANAGEMENT.

Swiss Re Corporate Solu ons policyholders: Don’t miss out on the invaluable risk management resources available exclusively to you. Log in to www.iiaba.net/EOHappens to access claims sta s cs, preven on tools, insigh ul ar cles and more.

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CONTACT FOR MORE INFORMATION Helen L. Collins, AAI, CPIA | Director of Professional Liability Programs 401-732-2400 | Helen.collins@iiari.com Insurance products underwri en by Westport Insurance Corpora on, Overland Park, Kansas. Spring 2020 Westport is a member of the Swiss Re group of companies and is licensed in all 50 states and the District of Columbia. © 2014 .

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SPRING 2020

CASE LAW NOTES K&W Automotive, LLC v. Town of Barrington, C.a. No. P.C.-2018-0471 (Jan. 31, 2020) The R.I. Supreme Court recently issued a decision on a local issue of increasing interest to many in the midst of the current worldwide health crisis: can a municipality enact sciencebased public health laws to protect its residents from a known risk of disease and death? What if such a law is more restrictive than similar state laws? What are the limits we impose on a local health ordinance?

purchase of tobacco, nor authority to restrict the sales of certain tobacco products (in this case, flavored products). The court conceded that it “welcome[d] a review up on the seventh floor [at Supreme Court] . . . There’s some [times] that I wouldn’t mind being told I’m wrong; this would be one of them.” As the hearing justice anticipated, the matter was appealed, and the Supreme Court weighed in.

Background On June 5, 2017, the Town of Barrington, Rhode Island enacted Ordinance No. 2017-7 (the “June Ordinance”), making it “unlawful to sell or possess with the intention of selling tobacco products without a tobacco dealer’s license.” The June Ordinance imposed conditions upon license holders, including a prohibition of sales to anyone under twenty-one (21) or the sale of flavored tobacco products.

The Rhode Island Supreme Court wrestled with a question of authority – did the Town of Barrington, under its constitutionally authorized Home Rule Charter, have the authority to enact such an ordinance? A bit of history: in June 1951, Rhode Island ratified the 28th Amendment to the Rhode Island Constitution [now the 13th Amendment]. It granted municipalities the right to self- government in all local matters. R.I. Const., art, 13, § 1. Specifically, the Rhode Island Constitution provides:

In November 2017, Barrington repealed the June Ordinance and enacted a new ordinance, No. 2017-17 (the “Tobacco Ordinance”) intended to reduce access to tobacco products by young people and to generally reduce the appeal of tobacco to younger people. The Tobacco Ordinance prohibited the sale of tobacco products to persons under the age of 21 (rather than 18) and limited the sale of flavored tobacco products. The Tobacco Ordinance provided for enforcement by an increasing series of fines for a first and subsequent offenses. A number of local businesses, including gas stations and e-cigarette and cigar vendors, challenged the Tobacco Ordinance, arguing that it constituted a violation of the Rhode Island Constitution, and was preempted by state law.

“Every city and town shall have the power at any time to adopt a charter, amend its charter, enact and amend local laws relating to its property, affairs and government not inconsistent with this Constitution and laws enacted by the general assembly in conformity with the powers reserved to the general assembly.” R.I. Const., art. 13, § 2.

In June 2018, several public health organizations, including the Campaign for Tobacco-Free Kids, filed an amicus brief at the Providence Superior Court in support of the town’s authority to enact the ordinance. Other “friends of the court” filers included the American Cancer Society Cancer Action Network, the American Heart Association, American Lung, and the City of Providence. On July 19, 2018, the Rhode Island Superior Court ruled that, despite the fact that tobacco control and efforts to protect youth are “an absolute necessity” the Town of Barrington lacked authority to pass such an ordinance. The court reasoned first that the Tobacco Ordinance primarily concerned public health and safety and that, therefore “the [state’s] police power [was not] implicated.” From there, the court applied a threepart test set forth in a 1992 R.I. Supreme Court case, Town of East Greenwich v. O’Neil, 617 A.2d 104 (R.I. 1992). Essentially, the Superior Court’s decision on the Tobacco Ordinance was premised on the idea that the town had neither express nor implied authority to set age limits to qualify for

Rhode Island’s highest court has long held that Home Rule allows a municipality to legislate on matters of “purely local concern.” They may not, however, legislate on matters of “statewide concern,” which are exclusively within the power of the state’s general assembly. Matters of “statewide concern” include areas such as education, elections, police powers, conduct of business, and taxation. The O’Neil case, relied on by Superior Court in its decision on the Tobacco Ordinance, set forth criteria for deciding whether an issue is of local or statewide concern: 1.

is uniform regulation throughout the state necessary or desirable?

2. is a particular matter traditionally within the domain of one entity? 3. will the action have a significant effect upon people outside the town or city? The Rhode Island Supreme Court reasoned that the Superior Court had analyzed these issues correctly in its initial decision, ruling that Barrington’s home rule charter did not give the town the authority over issues of statewide concern, and that regulating tobacco sales is just such a matter. The Supreme Court further held that, as Barrington did not have regulatory authority in this area, an analysis of any state preemption of local ordinances was unnecessary.

This feature of The Anchor reviews recent case law involving the insurance industry. Please contact the author for more information: Travis J. McDermott Partner., Partridge Snow & Hahn LLP, (401) 861-8200, tmcdermott@psh.com

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Spring 2020


SPECIAL BULLETIN - LEGAL BRIEFS

Dos and Don’ts of COVID-19 E&O Suits

RISK MANAGEMENT.

What You Do and Don’t Do When a COVID-19 E&O Suit Arrives COVID-19 has changed the agent’s errors and omissions (E&O) landscape for the next several months. While we can’t predict the number of agents who may have E&O claims at this point, the odds are high that if you don’t get sued, an agent you know will. Proper actions and reactions when threatened or served with an E&O suit arising out of this pandemic are of utmost importance. Once a threat is made or a suit filed, the allegedly improper act or omission has already occurred - don’t worsen the situation by making bad decisions. Remember these “dos” and “don’ts” if you find yourself in an E&O situation. Let’s start with the first MAJOR don’t: Do not overreact to the claim. Understand that there is no shame in being accused of an error or omission, especially given the weird aspects of this COVID-19 situation. Even the best practices and procedures may not protect the agency right now. Anger, either toward yourself or others, is counterproductive and serves only to increase the weight of the situation.

Do Not Do These Things Do not, under any circumstances, alter the client’s file. What’s done is done. Making changes creates the appearance that there is something to hide. Accept what is there and prepare for what comes next. Do not discuss the claim with anyone other than the claims representative, defense attorney or any other member of the office directly involved in the claim. The only individuals who need to be involved in any discussion related to any E&O claim are those personnel directly related to the care of the plaintiff’s account and those defending the agency. Do not make any admission of liability or wrongdoing; and do not offer or make payment. Do not provide any written or recorded statement to the plaintiff without your E&O carrier’s claim representative present. Do not allow inspection, copying or removal of client files and records without consulting with your E&O claim representative. Do not try to manage the claim on your own. The E&O carrier has more experience and is better able to manage the process. Allow those with more experience and resources to manage the suit.

Spring 2020

14


What to DO What should your immediate and ongoing “do’s” be following an E&O claim? Notify the E&O carrier of a “claim” or potential claim immediately. Provisions in the E&O policy require the insured to notify the insurance carrier as soon as practicable following the receipt of a “claim” or any indication of a potential claim. Listen for “trigger” words or questions. Some words, phrases or questions just don’t seem normal, in fact, they sound like something a lawyer would say. If your client uses terms like “duty,” “breach” or “breach of duty,” assume they have been talking with a lawyer. Also pay attention to the questions that are asked, does it seem like they are trying to trap you into admitting something? Notify the carrier of a potential claim if words or phrases seem to indicate a lawyer is already involved. Assume every conversation is being recorded. Regardless of the legalities of recording a conversation, assume your answers are being recorded. Pick responses carefully. Gather and organize all pertinent records related to the insured and the situation. But when doing this, remember the second “don’t” - don’t alter them. The claim representative needs all the information to conduct an investigation and prepare and provide a proper defense. Write down all the information known about the incident surrounding the claim. Each member of the team directly related to the client and the incident giving rise to the E&O claim should record all they can remember about the incident or incidents on which the claim is based. This should be a factual narrative statement in chronological order. Leave out opinion and emotion. This is the time to act like you are talking with Joe Friday from Dragnet – just the facts. Who, what, when, where and why is all that should be contained in these accounts. Assign one person as the claim leader. One person should be assigned the duty to report, track and manage all COVID-19 E&O claims within the agency. Cooperate with the E&O carrier. This includes providing information and facts that look bad for the agency. Hiding or hedging certain aspects of the facts surrounding the situation on which the claim is based creates distrust between you and your insurer; it also makes the agency look guilty. The insurer is on your side. Make sure you comply with all policy conditions and requirements. If the agency fails to comply with all E&O policy conditions, coverage may be jeopardized.

Hopefully, You Will be Spared Hopefully, you and your agency will not need this information. If not, that’s great. But given the uncertainty of this current situation, it’s better to be prepared.

15 Independent Insurance Agents of Rhode Island Spring 2020


E&O Corner

Possible Coronavirus Claims How to Handle Questions Concerning Possible Coronavirus Related Claims During the past few months the world has

been severely impacted by the coronavirus pandemic. The effects on individuals and businesses have been many and far reaching. Due to the spread of the virus, sporting and concert events have been cancelled, schools have been closed, and the restaurant and travel business has been hit hard. During this time, many insurance agents and brokers have reached out to us to ask how they should handle inquiries from their insureds concerning coverage for potential claims that they may have related to the effects of the coronavirus. There is no doubt that the coronavirus will result in insurance claims being made. But, will there be coverage for those claims? The answer is not entirely clear, but most insurance policies contain exclusions that would exclude coverage for coronavirus

related claims. But, whether there is ultimately coverage for a particular claim will depend upon the individual circumstances involved and the language contained in the subject insurance policy. Insurance agents and brokers should be prepared for an influx of claims and remain diligent in their claims handling procedures in order to both help the customers through the process and also protect the agency or brokerage from an E&O Claim during this very uncertain time. As we have cautioned repeatedly over the years, since the insurance company is the one that will ultimately make the determination of whether or not to cover a particular claim, the question is most appropriately answered by the insurance company and not by the agent or broker. If you

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are faced with a customer who is asking about coverage for a particular type of coronavirus related claim, the best practice would be to have that the customer put the inquiry in writing to you. Having the request in writing will avoid any confusion as to what information is being sought and will provide an easier means for transmitting the inquiry to the insurance company. The quickest and most efficient way to transmit the written request for information is by e-mail or fax. As a general rule, do not summarize or editorialize the inquiry that you receive from the customer. While this may be done with all the best intentions, it might lead to an inaccurate translation of the question or possible confusion. Keep in mind that the more specific the inquiry is that you receive, the more likely an accurate response can be provided whether there is coverage or not.

the person who has asked for the information. Once again, this helps to avoid any miscommunication or information getting lost in translation.

After providing the written inquiry concerning coverage for the potential claim to the insurance company, it is prudent to then request that the company provide its response in writing. If a request for a written response is rejected by the insurance company, this should possibly raise some red flags. Nonetheless, to exercise caution, it may be wise to confirm any conversations in writing, and then be sure to save that writing.

Careful handling of coverage inquiries will help guide the customer in connection with any claim that they may potentially have, even if it is related to the coronavirus. In addition, allowing the insurance company to respond to the inquiry will help the insurance agency or brokerage protect itself against possible E&O claims and lawsuits related to the claim.

As with any communication that concerns issues of coverage, the agency or brokerage should be certain to retain in the customer’s file the writing containing the inquiry, along with the transmittal email or telefax and the response from the insurance company, so that information is available in the event an issue arises later on. One additional thing to keep in mind is that any potential claim or potential claim that you receive from an insured should be submitted to all insurers an insured may have that may possibly provide coverage for the claim. Again, it should be the insurer that makes the coverage decision and not the insurance agent or broker.

It is also wise to forward the verbatim response that is received from the insurance company back to

Keidel, Weldon & Cunningham, LLP

concentrates its practice in the defense of insurance agents’ and brokers’ errors and omissions claims and litigation, errors and omissions loss control counsel and education, insurance coverage analysis and litigation, and insurance regulatory matters. Please direct any comments or questions to James C. Keidel, Esq., Christopher B. Weldon or Robert Walker Lewis either by mail at the firm’s Rhode Island office located at 303 Jefferson Boulevard, Warwick, Rhode Island 02888, by email at jkeidel@kwcllp.com or cweldon@ kwcllp.com, or by telephone at 401-773-7730.

James C. Keidel, Esq. Partner, Keidel, Weldon & Cunningham, LLP

Christopher B. Weldon, Esq. Partner, Keidel, Weldon & Cunningham, LLP


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HR CORNER

You Have to Make the Right Hire This is a continuing article in the series of human

resource articles for the “Independent Agent”. My goal is to bring value to your organization in the accomplishment of the Essentials of Human Resources. In past articles, we have dealt with a variety of topics. Recruiting is not just hiring the right people but creating a community where great talent wants to work. As an owner, manager or your role is Human Resources, recruiting is a huge part of your job. If you are not hiring now, you will be soon but, we’re recruiting our current employees to make sure they’re happy and staying put. After all, our employees are our most important asset. Of course, recruiting is so much more than posting a job listing and waiting for resumes to flood into you. The organization has to take active role in making sure the organization is a great place to work and getting that message out to its employees. But how can your small business compete with the Googles and the Apples—and their thousands of unsolicited job applications? Consider how your company is on display all the time—on your website and blog, through each email contact, all your social networks and pretty much everywhere (including product review sites and ad campaigns). Your messaging affects who wants to work for your company. A recent LinkedIn study showed that all over the world people cared most if the company was perceived as a great place to work or not when considering a job.

change the dynamic of an entire team. It will cost you more than money when you have to replace one of these hires. Your company may be paying with lost productivity, lost time and the expense of recruiting and training a replacement as well as the negative impact on employee morale. We must have a great culture already in place so these new hires can jump on board. The best way to encourage passion is to surround new hires with passionate people. People love to be part of something great and do meaningful work! In closing, Mary Kay Ash has a great message… “People are definitely a company’s greatest asset. It doesn’t make any difference whether it’s product is cars or cosmetics or in the service business. A company is only as good as the people it keeps.” If you have a question or need clarification, please contact Dave Nichols or a Human Resource or legal professional.

Two key points in making the right hire: 1. Hire people who have the right skills to fill the need you have. Be patient, Manpower’s recent recruitment survey shows that over 50% of employers are having problems filling job openings. 2. Bring on people who fit the culture and have the skills to do the job right away. What exactly is a cultural fit? It boils down to hiring the right people who will map to your company’s culture, vision and values. These hires should be cooperative and add to the creative atmosphere to make workdays easier and work more fun. We must hire for culture fit because just one bad apple can Dave Nichols is the principal of a human resource management business, Quality Transitions, Inc. located in Charlestown RI. He has 25 years of experience in the field and also retired from the U.S. Army as a Lieutenant Colonel. If you are interested in learning more, please visit his website at www.qualitytransitions.net. 19

Spring 2020

Dave Nichols Quality Transitions, Inc.


Worker’s Compensation Corner

Emerging Issues THE CORONAVIRUS AND ITS EFFECT, TO DATE, ON THE WORKERS’ COMPENSATION INSURANCE INDUSTRY I wrote on the coronavirus in my last column for the Anchor. I posited that the workers’ compensation insurance industry may face a new challenge; the compensability of claims arising out of injuries suffered by health care or other employees who contract COVID-19. The world has certainly changed since I wrote that column and compensability has not been the only workers’ compensation challenge. This article will summarize where workers’ compensation stands in Rhode Island and nationally on all issues workers’ comp. The General Assembly has not been meeting due to the pandemic. So the legislative process is on hold. The Advisory Council will be meeting remotely in May to be prepared to make recommendations for legislation to the General Assembly in the event they do convene before the end of the year. The Medical Advisory Board has cancelled its meetings until the state of emergency is over. The pandemic caused the Rhode Island Workers’ Compensation Court to suspend hearings beginning March 17, 2020. With the permission of the Chief Justice, the Court was allowed to develop a process to do remote telephonic pretrial hearings and settlements by agreement of the parties commencing March 24, 2020. A robust telephonic hearing process followed. Effective April 20, 2020, video hearings became available and all matters, including status conferences, initial hearings and mediations, are now heard, not just by agreement, but as scheduled by the Court. Trials are the only matters not being held and they are a small percentage of the proceedings at the Court. With lightning speed, Chief Judge Ferrieri and his staff transformed our Workers’ Compensation Court from exclusively an in person court to a multidimensional dispute resolution system that is a model for any state. The pandemic is not in the way of most matters being heard at the Rhode Island Workers’ Compensation Court. While the changes at the Court have been transformative, litigation has been affected in many other ways. Depositions of injured workers, witnesses and experts

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have been delayed. The closure of many businesses and health care offices has interfered with the ability to secure records by subpoena; in the service of the subpoena by a constable, the acceptance of the subpoena by a business or keeper of records, and in the production of the records by a remote workforce. While the Secretary of State has authorized the use of remote notary publics (which is an essential element in the use of affidavits and in the settlement of claims) this has added expense and delay to the process. Thus, in the more complicated litigation at the court, the pandemic has added delay and resulting expense to the system. The pandemic has also changed the way injured workers are being treated for their work related injuries. Most elective surgeries have been cancelled, and office visits and physical therapy have been a challenge. The Court suspended all its impartial medical examinations and the Arrigan Center rehabilitation facility has closed. In an effort to encourage ongoing treatment, the Department of Labor and Training has followed the Governor’s Executive Order 20-06 and issued a Bulletin allowing providers increased fees under the Rhode Island Medical Fee Schedule for telephone consults and allowing telemedicine (typically video communication between provider and patient) to be billed at the same rate as an office visit. DLT Information Letter 20-03. I began my prior column by stating that the primary claims question for employers, agents and the insurance carrier is whether the employee making a claim contracted the coronavirus in the course and scope of his or her employment. I also proposed that

The Anchor


coronavirus patients are likely to have an impact on all sorts of employers and employees, especially health care personnel, and that the directives from public health authorities and the employer will impact the compensability determination. The Rhode Island Department of Health, the Centers for Disease Control and Prevention and the Occupational Health Care Administration have all spoken on the danger of COVID-19 exposure to health care workers. We see this every day in the news. In Rhode Island, our Act makes compensable a “disability arising from any cause connected with or arising from the peculiar characteristics of the employment”. RIGL 28-34-1, et. seq. Direct repeated exposure to COVID-19 patients is particular to health care employees and peculiar to their employment. While health care workers are one class of employees who may very well prove compensability, with the community spread of the virus, other employees will likely have a more difficult time establishing the necessary casual relationship between work and the disease. We will see.

To conclude, the effects of the coronavirus on workers’ compensation will be far and wide and they continue to develop every day. The prudent employer will continue to heed all the public health directives. The attentive agent will source every element of government involved in the administration of the Rhode Island workers’ compensation system to best serve their customers. We at Beacon remain available to answer any questions you or your customers may have on this or any other issue involving workers’ compensation.

“The pandemic has also changed the way injured workers are being treated for their work related injuries”

Finally, the National Council on Compensation Insurance (NCCI) is expected to make recommendations to states insurance regulators on the interplay between COVID-19 and states workers’ compensation systems very shortly. As of this writing, nothing has been announced but their anticipated recommendations could very well impact rates, premium and reporting going forward.

Mike Lynch has more than 30 years of experience in workers’ compensation law. Prior to Beacon, Mike was a partner at Higgins, Cavanagh & Cooney where he practiced primarily in the area of workers’ compensation defense.

Michael Lynch, Vice-President, Legal, Beacon Mutual 21

Spring 2020


GOVERNMENT AFFAIRS CORNER

UBER Insurance Coverage in Legal Dispute UBER CLAIMS NO RESPONSIBILITY FOR BODILY INJURY TO PASSENGERS CAUSED BY AUTHORIZED UBER DRIVER. An Article in the February 10th edition of

Rhode Island Lawyers Weekly newspaper highlights the murky world of liability insurance for Uber drivers. A law suit brought because of bodily injury to passengers against Uber and it’s authorized driver was the subject of a ruling in the federal District Court of Rhode Island. Uber’s attorneys filed a motion for summary judgement seeking to have the suit against Uber dismissed claiming the Uber authorized driver was “not an agent, servant, or employee of Uber as a matter of law” according to the federal District Court MEMORANDUM AND ORDER. The motion for summary judgement was denied by Chief Judge John J. McConnell, Jr which set up a jury trial, unless the case was settled out of court. The case stems from a family that flew into T F Green Airport and used their Uber app to summon an Uber vehicle to provide a ride from the airport. The authorized Uber driver picked up the family and subsequently collided with a vehicle owned by Balise which had broken down and was abandoned by the roadside. All three members of the family were injured.

The family is represented by Attorney Joseph Marasco of the law firm Marasco & Nesselbush. Mr Marasco was quoted in the Rhode Island Lawyers Weekly stating the case “is important because Uber is trying to avoid responsibility for their driver’s conduct in causing truly catastrophic harm”. Marasco is also quoted as saying “it’s really hard to distinguish Uber and it’s drivers from any other employer/employee relationship”. Attorney Marasco is a principal in the law firm of Marasco & Nesselbush. His principal partner in the firm is state senator Donna Nesselbush (D-Pawtucket). Attorney Nesselbush is also a municipal court judge in Pawtucket. For insurance agents this case is of particular importance because we are often asked “what will I have for liability insurance” if I drive for Uber? As we know the standard personal auto policy excludes all coverage as soon as the Uber driver turns on the app making themself available to give a ride. A Transportation Network Company (TNC) statute that was passed in 2016 seemed to answer the insurance question, but based on Uber’s motion, apparently not so. The 2016 legislation was titled Transportation Network Company Services. Uber through their lobbyists called the legislation a “model act”. It was Uber’s model act, promoted nationwide, they wrote the language and it was strongly backed by insurance company lobbyists. IIARI opposed the legislation for several reasons, chief among them was the fact that vehicle owners aren’t notified by Uber of all the personal auto policy exclusions when the registered Uber driver is not the owner of the vehicle, only the driver is notified of all the insurance hazards. Other objections IIARI had were the minimum uninsured motorist bodily injury coverage prescribed (25/50) and the low liability limits

Robert J. Pettinicchi, Chief Ernest Lending Shaghalian, officer, Jr., CPCU, AAI Insurbanc Affairs Committee Chairman Government

Spring 2020

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provided in phase 1 which is after an Uber driver turns on their app making themself available to give a ride but has not yet agreed to provide a ride. The liability limits in that phase are 50/100/25.

To make things just a little more murky some personal auto insurers offer a TNC endorsement for an additional premium. The endorsement acknowledges that the vehicle is used for TNC purposes however it doesn’t provide any liability coverage in phase 2 or 3 of the process. This seems to leave the TNC driver with; (a) the standard personal auto policy that excludes all coverages once the app is turned on; (b)if they bought a personal auto TNC endorsement it doesn’t cover liability during phase 2 or phase 3; (c) and Uber who made the motion in court that claimed they’re not responsible for their approved drivers.

The language in the statute, 39-14.2-14 prescribes different limits of liability for the different phases of the TNC process. The limits mentioned above are for phase 1. Once the driver has agreed to provide a ride for the customer and is in route to pick up the passenger or when the passenger is in the vehicle (phases 2 & 3) the law prescribes; “Primary automobile liability insurance that provides at least one million five hundred thousand dollars ($1,500,000) for death, bodily injury, and property damage”. The law states that the $1,500,000 “may be satisfied by any of the following: (i) Automobile liability insurance maintained by the TNC driver; or (ii) Automobile liability insurance maintained by the TNC; or (iii) any combination of” (i) or (ii). Apparently Uber’s interpretation of the statutory language that they promoted is that “may be satisfied” could also mean may not be satisfied by the insurance maintained by the TNC.

Since the February publication in the RI Lawyers Weekly the case against Uber was settled out of court and because of the standard confidentiality agreement we’ll never know the outcome. If asked by customers, all we know for sure is that the personal auto policy doesn’t provide any coverage and Uber filed a motion in court claiming they’re not responsible for their drivers.

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MARKETING CORNER

Navigating through a Crisis with the Right Communications

You don’t need another article of

platitudes and cliches. I hope to provide you with some practical advice for crisis communication that you can use now, or when you face that next catastrophe. I’ll give you my background in this niche PR discipline towards the end of this column. I want to get right to the point. 1. Designate one person as your spokesperson. You can’t have different managers, owners, and staff spouting off to reporters and customers giving mixed messages, and even worse, contradictory messages. 2. The spokesperson should be the CEO. As Hyman Roth said to Michael, “This is the life we’ve chosen.” If you’re a CEO, this is your moment. People want to hear from you. The buck stops with you. It’s your company, so own the message too.

“It’s your company, so own the message too.” 3. Tell the truth. The American public is way too smart to buy BS anymore, and you will most likely be found out anyways. We’re much more forgiving to people who own up to it and ask for forgiveness than people who try to deceive us. 4. Take your medicine, then move on. I know I said no cliches, but you really need to rip off the band-aide, and I don’t know how to say it more directly. You’re better to take that initial pain earlier on, than to let that problem get infected and kill you. 5. Get out in front of it. It’s better to be the deliverer of bad news than for your staff and clients to hear it from someone else. You need to get your facts out as the narrative rather than let someone else define it for you. 6. If you’re hit, then hit back. I know this contradicts what we’re told as kids, but don’t let yourself be “swiftboated.” You don’t want your opponent to express one side of the story without your explanation.

John Houle JH Communications

John Houle is the president of JH Communications, a marketing-communications agency in Providence RI specializing in the insurance industry. He can be reached at 401.831.6123 or at john@jhcom.net. Spring 2020

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7. Don’t shoot from the hip. Think before you speak, because most of the problems come from a person speaking too much, giving away too many details, and ultimately veering off message. Think precisely on what you want to say and deliver that message with clarity. 8. Keep the circle closed. You should have a few core advisors around you including legal counsel but also your PR pro. Your lawyer will help you with lawsuits, but your PR pro will help you with the court of public opinion and ultimately whether your brand can emerge from the crisis. 9. Pitch like a pro. If you want to be taken seriously, please make sure you proof your pitch and take the few minutes to customize the pitch with tailored information for the reporter rather than a blanket statement to everyone. When you send the press release to a reporter make sure the release is part of your email rather than sent as an attachment. 10. Remember the Golden Rule - Do to others as you would have them do to you. Reporters are people too and deserve your respect. They’re just doing their jobs. Remember that you catch more flies with honey than you do with vinegar. Reporters are under tight deadlines and more pressure so they will take better care of you when you return their calls and treat them like fellow human beings.

What do you do when the crisis is beyond your control, like the coronavirus? Use your website as the tool it was always meant to be. List your updated hours, whether you’re working remotely, and how people can make payments. Post useful information on social media but be mindful of the news source so you don’t share inaccurate information. Take advantage of new communications tools. There are many good virtual meeting softwares like Zoom and WebEx out there, as well as FaceTime and Skype to communicate face to face with staff and clients. You may even find that this software improves your communications with staff and clients, and you could discover new applications, like using Zoom to record video when you’re not able to shoot in person. Let’s be nice to everyone. We’re all in this together. Everyone is on edge, and doing 2-3 jobs right now from home-schooling to figuring out how to pay the bills. If someone is short with you, or quick to react, maybe right now is the time to give them a pass. So, what about me? I’ve been doing PR from the front lines for over 20 years, helping elected officials, CEO’s and small business owners craft their message. I started a business from scratch so if I didn’t produce, I didn’t eat. I am committed to helping my clients navigate through a crisis, and I’m here for you if you need a sounding board.

25 Independent Insurance Agents of Rhode Island Spring 2020


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RHODE ISLAND EMERGING LEADERS

Pandemic

As I sit here at my kitchen table during my work

An Horizonit made me wonder what it means to not fromEvent home mandate only be an independent insurance agent but an emerging leader during this global pandemic. It has certainly not been easy transitioning to working from home as there are technological issues and other distractions that must be dealt with. Also, not being able to meet with client’s and discuss and review their needs has been a challenge. We as agents not only service the communities we live in, we live and are members of the same communities. That is what makes us different than a big box direct writer insurance company, it is the fact that we face the same challenges as our clients. So how can we help? We can be a valuable resource and a shoulder to lean on when times get tough. Although on the commercial side coverage may not always apply for what we are facing, we can give honest answers and point our insureds in the right direction and help them get setup with the resources that are available to them. This week we had our first Emerging Leaders committee meeting over Zoom. Even though it wasn’t live and in-person it was great to see the familiar faces of my fellow committee members. What we discussed is how as Emerging Leaders can we step up during this crisis. Some great ideas that were brought up is to donate much needed medical supplies such as masks, gloves, or sanitizer. We are also hoping to take advantage of the technology that is available to us and we will be scheduling virtual CE classes and virtual networking/happy hours, so please be on the lookout for more information.

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In closing I just want to wish everyone health and happiness as we move forward. We as Emerging leaders had a great start to the year with a sold out kick-off event and we were hoping to build off that momentum, this pandemic has certainly thrown a curve ball to that but we will have to adapt and keep things moving forward. We will be in touch, take care everyone.

“We can be a valuable resource and a shoulder to lean on when times get tough.” Timothy Mailloux Emerging Leaders Chair 27

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Spring 2020 Anchor  

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