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GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | APRIL 2019

Vermont Insurance Agents Association is a statewide trade association representing nearly 100 independent insurance agencies in Vermont, with more than 900 employees. VIAA member independent insurance agents represent more than one insurance company, and as a result, can offer clients a wider choice of auto, home, business, life and employee benefits.

Green Mountain Agent is a publication of

CONTENT APRIL 2019

04 600 Blair Park Road Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org

Seasons May Change, But Our Commitment to the Independent Agent Channel Remains the Same...

VIAA Officers President Paul Plunkett, CIC Vice President Alan Kinney

ermont Mutual is proud to have served Vermont and the New England market through the longstanding partnership with our Independent Agents. It remains our privilege to work with the finest Independent Agencies in the industry … the only place you can buy a Vermont Mutual policy.

Vermont Mutual is proud to sponsor the Vermont Insurance Agents Association’s new Education Center in Williston, Vermont.

Secretary/Treasurer Dan Rodliff National Director Ron Bixby

Directors Chip Ams

Letter from the President

07 Newsflash

08 On the Hill

10 Under the Dome

12, 16 Features: Knowledge

20 Feature: Opinion

Michael Barrett

Erin Odell, CIC

E & O Corner

Staff Executive Director Mary Eversole mary@viaa.org

GMA Publication Design LONDONmiddlebury londonmiddlebury.com

26 Feature: Sales & Marketing

29 Insurance Commentary

33 Company News

89 State Street, P.O. Box 188, Montpelier, VT 05601 | 800.451.5000 | VermontMutual.com 02

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LETTER FROM THE PRESIDENT APRIL 2019

Did you know as a member of VIAA that you are part of a network of more than a quarter of million independent agents nationwide? This includes every staff member in an agency whether you are the principal, producer, customer service representative, account manager IT Coordinator, or the receptionist.

Consider us your trusted, improve-your-online-presenceand-retain-customers sidekick.

Your VIAA Membership fuels our mission each and every day. Your dues support advocacy with lawmakers at the state and federal level. Your commitment as a member drives us to offer award winning education, agent awareness campaigns and allows us to connect at one of the largest insurance events in Vermont. We want you to get the greatest possible value for your membership, and that means taking full advantage of the many benefits we provide. These are some of your benefits: perpetuation planning, advocacy, market access, insurance for your agency, Trusted Choice, insurance for your staff, networking, awardwinning education, IPFS Premium Financing, InsurBanc, legal counsel, WHAVE, Big “I” Hires, Young Agents Committee and more. Whether it’s a simple question or training session for your staff, we’re happy to help. When you identify a business need —please remember to make VIAA your first call.

Paul E. Plunkett, CIC VIAA President

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NEWSFLASH: GOVERNOR SCOTT APPOINTS KEVIN GAFFNEY AS DEPUTY COMMISSIONER Montpelier, Vt.— Governor Phil Scott and Financial Regulation Commissioner Michael Pieciak today announced the appointment of Kevin Gaffney as deputy commissioner of the Vermont Department of Financial Regulation’s (DFR) Insurance Division. “The Insurance Division’s work is critical in my Administration’s efforts to make Vermont more affordable and protect the most vulnerable through strong regulatory oversight,” said Governor Scott. “Kevin brings years of industry experience and leadership to this role and I know he will serve Vermonters well.”

Vermont insurance industries in marketing, underwriting and product management positions. Kevin began his insurance career as a multi-line (Property & Casualty and Life & Health) insurance agent. “I believe my strong understanding of the regulatory process along with a keen knowledge of the insurance marketplace will enhance my ability to be an effective leader,” said Gaffney. “I’m extremely honored to work alongside such a talented and dedicated staff here at DFR where we remain committed to protect Vermont consumers.” A graduate of John Jay College and a lifelong New Englander, Gaffney is a Connecticut native and has lived in Vermont since 1994. He and his wife, Veronica, have three children and two grandchildren with a third on the way.

Gaffney joined the Vermont Insurance Division in 2007 as director of the Rates & Forms section, where he leads the Rate & Form Analysis team and monitors competition in the marketplace. He also serves as director of Market Regulation, overseeing market conduct for property and casualty lines. Gaffney previously served as director of the Producer & Individual Licensing section. “For the last three years Kevin has overseen Vermont’s workers’ compensation insurance rate filing process, which has resulted in significant rate reductions saving Vermont businesses more than $40 million in insurance premiums,” said Commissioner Pieciak. “His leadership will help the Division build on its success and expertise in support of Vermonters.”

Get to Know AmTrust. Visit d19.amtrustinsurance.com or call 877.215.7577 AmTrust is AmTrust Financial Services, Inc., located at 59 Maiden Lane, New York, NYNY 10038. Coverages areare provided by by its its property and AmTrust is AmTrust Financial Services, Inc., located at 59 Maiden Lane, New York, 10038. Coverages provided property and casualty insurance company affiliates. Consult thethe applicable policy forfor specific terms, conditions, limits and exclusions to coverage. casualty insurance company affiliates. Consult applicable policy specific terms, conditions, limits and exclusions to coverage.

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Prior to working for the State, Gaffney spent 23 years in the Connecticut and

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ON THE HILL: BIG ‘I’ TESTIFIES BEFORE CONGRESS ON NFIP By Jennifer Webb

On Wednesday, Chris Heidrick, chair of the Big “I” Flood Insurance Task Force, testified before the U.S. House of Representatives Financial Services Committee on reauthorization of the NFIP. The hearing comes after the committee released discussion drafts of legislation related to the NFIP late last week. The Big “I” was the only insurance trade association to testify at the hearing. Heidrick’s testimony focused on three points: • The importance of reauthorizing the NFIP on a long-term basis before the program expires on May 31. • The importance of increasing take-up rates for flood insurance—whether through the NFIP or the private market—because an insured survivor recovers more fully regardless of where they obtain coverage. • The importance of modernizing and simplifying the NFIP to make the program more transparent and easier to understand for consumers and agents. Heidrick also fielded several questions from members of Congress. The questions covered a variety of topics, but two themes that emerged were ensuring that flood insurance

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FULL VALUATION REPORT

is affordable for low-income property owners and helping expand the private market. Both steps are necessary to increase flood insurance take-up rates. The hearing also covered issues related to mapping, claims and ensuring people understand their flood risk.

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The hearing included not only a panel of experts from insurance, floodplain management, environmental groups, think tanks and real estate, but also a panel of members of Congress from districts heavily impacted by flooding. These members urged the committee to reform the program and remember that flooding occurs in all 50 states and impacts every congressional district. In 2018, the NFIP paid out claims in every state except Alaska. The Big “I” supports a long-term reauthorization of a modernized and transparent NFIP that would increase take-up rates for flood insurance in both the NFIP and private market. Reforming the NFIP will be a top issue at the upcoming Big “I” Legislative Conference, to take place May 8-10 in Washington, D.C.

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UNDER THE DOME: VERMONT LEGISLATIVE UPDATE By John Hollar, Downs Rachlin Martin passed the medical monitoring provisions alone, and that bill was vetoed by Gov. Scott. The legislature is considering an expansive paid family leave proposal (H.107). The bill would provide up to 12 weeks of paid leave at 100 percent of wage replacement up to $1,067 per week. The bill is expected to pass the full House the week of March 18. The program would be paid for by a .7 percent payroll tax paid equally between employers and employees.

The legislature enters the second half of the session with mixed results on a wide range of bills that would impact the state’s insurance agents and insurance markets. The most troublesome is a bill (S.37) that would hold manufacturers strictly liable for harm relating to the release of toxic materials. The bill would create “joint and several” liability — meaning that a person who contributes one percent of a release that causes harm could be responsible for one-hundred percent of the damages. And the bill would require defendants to pay for medical monitoring of plaintiffs, even where there has been no showing of harm. No other state has eliminated the requirement of negligence in civil toxic release litigation, or imposed joint and several liability. Insurers would have no basis for evaluating the risk that would be created by the adoption of S.37 in Vermont. The result would almost certainly be higher costs and lower availability of insurance products. Nonetheless, the bill passed the Vermont Senate by a vote of 21-8. The House is likely to take a more skeptical look at the proposal in the next few weeks. Last year, the House

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VIAA played an instrumental role in delaying a bill (H.1) that would have banned employers from entering into non-compete agreements with employees. The bill was on the fast track in the House Commerce and Economic Development Committee until VIAA raised substantial concerns about its impact on agencies’ ability to protect customer relationships. The bill has been now been delayed and is unlikely to pass this year. VIAA also had success recently in amending an ambitious proposal (S.131) by the American Property Casualty Insurance Association that would have given the Department of Financial Regulation expansive authority to waive company compliance with virtually any insurance statute, regulation or bulletin. Working with its partner IIABA, VIAA convinced the Senate Finance Committee and DFR to significantly pare back the scope of discretionary authority. The bill as revised by the committee was acceptable to VIAA and is now pending before the full Senate. With businesses and employees located throughout the state, VIAA has a unique ability to shape legislation by engaging with local legislators. Those communications will be critical in the coming weeks as the legislature finalizes work on bills that could have a major impact on insurance agencies.

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WHY RESTAURANTS NEED CRISIS RESPONSE COVERAGE

KNOWLEDGE

By Kyle Rheiner

• Install a panic button under the counter.

Another policy component, crisis incident extra expense, refers to expenses the insured incurs during the period of restoration which they would not have incurred had there been no loss at their covered premises resulting from a covered crisis incident.

• Improve situational awareness by discussing scenarios that may be weird, suspicious or threatening.

But the most useful coverage element in the aftermath of my insured’s incident was crisis incident counseling expense. When we think about our insureds, we need to think about those who work for our insureds—these employees are our responsibility as well, and they were shaken up and worried about what might happen on their next shift.

• Work on developing staff’s memory by asking them to remember one thing about each patron and quizzing them. For example, “What color shirt was the gentleman wearing who came in around 7 p.m. and ordered XYZ?”

All in all, safety and comfort is paramount for your insureds and their staff. Cooperate with the criminal, keep everyone safe and deescalate the situation quickly. Here’s to safety and awareness! Kyle Rheiner is lead craft beverage insurance specialist at Craft Brewery Insurance and commercial lines producer at Strickler Insurance in Lebanon, Pennsylvania.

This type of coverage applies to reasonable and necessary expenses incurred for group crisis counseling services the insured provides in the aftermath of a covered crisis incident at their covered premises. Typically, there’s a limit and a timeframe—usually 60 days from the date the incident occurs—so encourage your insureds to get their employees to counseling as soon as is feasible.

It’s Saturday night and you take the family out to dinner at one of the great restaurants you insure. The place is buzzing with positive energy, and you know it will be a great night of revenue for your insured. When you’re done dining, you take the family home, relax and get some rest. Then, you get a call at 8 a.m. the next morning. Your insured informs you that 30 minutes prior to closing, their 19-year-old hostess and cashier, stationed at the register near the front door, was held up at gunpoint by two criminals in ski masks. The hostess did as she was told, and the criminals escaped with $10,000 in cash. Now what? This situation recently happened to an in-

If patrons fear their safety, that could take a toll on revenue for an insured. With that might come crisis incident communication expense coverage if the insured needs to hire a public relations firm to guide and advise them about how to communicate whether it’s safe for employees and patrons to return to the establishment.

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sured of mine. Fortunately, they had purchased a crime policy which kicks in when there’s a “covered crisis”: a violent act, physical or attempted, that is performed with malice and intent to cause injury or death to a person or persons. At a minimal premium, the insured’s policy also included coverage for abduction, kidnapping, stalking, sexual assault and food contamination shutdown. While this situation didn’t involve any of the above, it did involve use of a firearm, which was also covered. Beyond the cash that was stolen, an occurrence like this one may cause the insured to close its doors earlier than planned or for a few days afterwards. Under this policy, that would trigger crisis incident business income coverage.

The chances of an armed robbery happening at your insured’s establishment may be slim. But it pays to be prepared. Beyond securing the proper coverage, here are a few proactive risk management steps your insureds can take to maintain the security of their restaurant properties: • Create an emergency response plan. • Teach and follow active shooter protocols. • Put signs in the window stating the property is “Monitored by XYZ Police Department.” • Keep less cash in the register. • Take cash to the bank at different times each day, and have more than one trusted individual who delivers the money. Consider using the buddy system. • Install security camera and mirrors. W W W.V I A A .O R G

COULD YOUR CUSTOMERS USE

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The CIC Program is for agency and company personnel -- owners, producers, agents, account managers, brokers, underwriters, and marketing or claims personnel. Participants should be licensed agents, brokers, adjusters, or solicitors; or have at least two years of full-time experience in the insurance industry or as a risk management professional; or have served for at least two years as a full-time insurance faculty member at an accredited college or university. CIC COURSES MAY BE TAKEN FOR CE CREDITS FOR THOSE NOT SEEKING THE DESIGNATION. ATTENDANCE REQUIRED FOR ALL DAYS TO RECEIVE CREDIT FOR INDIVIDUAL CLASSES.

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KNOWLEDGE

DO YOUR STANDARD PERSONAL LINES CLIENTS NEED CYBER COVERAGE?

As the coverage becomes more mainstream, “that will raise education levels, but also raise awareness among clients who might be buying the wrong thing,” Hourihan adds. In the meantime, you can help your personal lines clients be more aware of their cyber risk by encouraging them to take a few risk management precautionswith their private data, says Fran O’Brien, division president, Chubb Personal Risk Services. For starters, be alert to ransomware—an attack on a computer or network that locks up or encrypts data, holding it hostage until the hacker is paid a ransom. “Cybercriminals can easily crack a home Wi-Fi network to gain access to personal data,” O’Brien explains.

By Jacquelyn Connelly The average American household has six devices connected to the internet, such as a security camera, smart home assistant, smart TV or baby monitor, according to a recent study by Grange.

Similarly, watch out for phishing scams, which often start from email. “To defend against them, individuals should not click on emails or links within an email if the message seems urgent for no reason,” O’Brien says. “If it’s coming from an unknown sender or if seemingly from a well-known company and is somehow out of the ordinary, sloppy or poorly worded, it’s likely a scam.”

Any device connected to the internet is at risk of being hacked, so perhaps it’s no surprise that about one in four individuals have been victims of a cyberattack, Grange reports. But that number becomes more startling when you consider that three of four people who have experienced a cyberattack had previously taken safety measures to prevent the attack, like installing security software. While 77% of people are at least somewhat concerned about the risks of accessing the internet from their devices, only 10% would go to a property-casualty insurance company for advice about cyber protection, according to Grange. “Cyber is something consumers still aren’t taking seriously,” says Lisa Lindsay, executive director, trustee and founding member of the Private Risk Management Association. “People are still using password123 as a password, they’re still using their children’s names—what we’re seeing is a need to continue to educate and have that cyber conversation with clients so they take cybersecurity as seriously as they take the physical security of their home.” Cyber endorsements have been available in the high net-worth market for several years, but insurers have not been as quick to respond with coverage developments for the

they’re touted as something that might really solve cyber issues.”

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Note, too, however, that phishing emails “are becoming increasingly sophisticated,” O’Brien adds. “If in doubt, call the company and ask if they are trying to contact you regarding your account.” standard personal lines space. Why? Perhaps the greatest deterrent is that cyber risk is evolving faster than most insurers can develop protection against it, even in the commercial market. “Insurance companies are slow to move as a group,” says Jerry Hourihan, president, AIG Private Client Group. “But as new needs emerge, new products become available, and oftentimes they do get embedded into more mass-market type of products.” Todd Rockefeller, principal of Private Client Services for BNC Insurance & Risk Advisors in Rye Brook, New York, agrees that personal lines carriers will “absolutely trickle this down” from the high net-worth market to their standard clientele—eventually. “As you get down to the middle market, they’ll charge a fair price for it, and because of that huge spread of risk, they’ll make money on

this,” Rockefeller says. “The industry sells on fear. We’re all scared of prying eyes and ransom and people messing around with our data, so protection against that is going to be very valuable.” Personal lines carriers like Grange and Cincinnati have already developed cyber endorsements for the standard homeowners client. “We are rolling out cyber solutions for both the high net-worth and standard personal lines customer segments, just with lower limits for the latter,” explains Will Van Den Heuvel, senior vice president, personal lines, The Cincinnati Insurance Companies. “We think that exposure will be hitting all segments of the population.” In an immature market, Hourihan warns agents to watch out for policies that are more fluff than substance. “Don’t be fooled by the bells and whistles and marketing around some of these coverages,” he cautions. “Many offer very limited reimbursement or very limited services, yet

To prevent access through Internet of Thingsenabled devices, consider “turning off internet-connected toys when not in use and never discussing anything private in front of home voice-activated smart speakers,” O’Brien says. Finally, insist your clients adhere to a number of simple, easy-to-follow best practices, including regularly changing passwords; using two-step verifications; restricting the information they must share to download the latest app or software update; and backing up their data on a regular basis. “Cyber is a risk that affects everyone,” Lindsay says. “If we think about homeowners insurance and how it’s evolved over the years, cyber is something we’ve got to see eventually become part of every policy. The threat is out there, it’s real, and it’s going to become even more and more sophisticated as time goes on.” Jacquelyn Connelly is IA senior editor. W W W.V I A A .O R G

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Helen Collins hcollins@viaa.org

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THE MYTH OF AGENCY MULTIPLES By David W. Tralka Whenever agency principals get together, the topic of agency valuations is sure to come up. Someone will start talking about an agency that sold at an unbelievably high multiple. Pretty soon, everyone’s nodding their head and saying there’s a killing to be made selling your agency.

OPINION

These types of discussions tend to be long on conjecture and short on facts. They remind me of the stories fishermen tell about the big one that got away. Rarely does anyone know the actual price that was paid for an agency. And even if they do, that doesn’t mean yours will sell for the same amount. As we start a new year, let’s all resolve to more fully appreciate what creates agency value and how markets determine price. Mergers and acquisitions may still be going strong, but the steady increase in interest rates is likely to act as a governor on prices going forward. So if you really want top dollar for your agency when it’s time to sell, you need to realistically take stock of your firm and not let those dollar signs go to your head. There are different ways to look at value. Some buyers pay attention to revenue multiples, essentially commission income. Others look at EBITDA (earnings before interest, tax, depreciation and amortization), or cash flow. I’ve always felt the revenue approach is flawed because it doesn’t take into account the cost of generating income. If you’re spending a dollar to make a dollar, that’s not a very efficient operation. The cash-flow model is a better indicator of the quality of an agency’s earning power. That is, your agency’s value comes from your ability to drive sustained cash flow over time. Regardless of how you measure value, higher-performing agencies will always sell for a premium. It’s no different than when the best maintained house in the neighborhood goes on the market. You know it’s going to sell for top dollar. Which brings me to another point: The market is the price at which a buyer is willing 20

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to pay a seller. You may think your fixerupper agency is worth a lot more, but if no one wants it at that price — well, it’s not really worth that, is it? Those high prices you keep hearing about are usually when a large strategic buyer has purchased an agency because it folds nicely into its portfolio. They may not apply to your situation. So how do you increase value so you will get the highest price possible? Here are six tips: 1. Find out what your agency is really worth. Hire a professional to help you assess your firm’s value. This will give you an objective starting point for improving your agency.

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2.Build value in your agency. Invest in ne w office systems and improved servicing. Hire top talent; add producers. This is called organic growth, or sweat equity, and it’s the best way to increase the value of your firm. 3. Buy something. You can also grow inorganically by acquiring a book of business or merging with a smaller agency. Look for opportunities that make strategic sense and that you can afford. 4. Become more efficient. Not every revenue dollar is equal. Look for income streams that don’t cost as much to support. Consider ways to automate processes and streamline marketing and servicing. Reduce unneeded expenses. With each business decision, ask yourself: “How does this affect my cash flow?” 5. Groom your successor. Have a plan for how you will transfer ownership. 6. Don’t wait. Time is a big factor in creating value. The more time you have, the more value you can create. Ten years is a good window. Don’t wait until you’re ready to retire. Country-club multiples, as I like to call them, are fun to talk about — but they should never form the basis for determining the value of your agency. Resolve to get real about the worth of your agency in 2019. Don’t let opportunity slip away because you failed to build value in your firm. W W W.V I A A .O R G

O &

HELP WANTED: Commercial Lines Producer

ER N R O C

Looking to Take Your Personal

STICKS AND STONES MAY BREAK YOUR BONES BUT YOUR WORDS CAN CREATE E&O PROBLEMS Submitted by: James C. Keidel, Esq., Howard S. Kronberg, Esq. Keidel, Weldon & Cunningham, LLP

Back in 1978, the United States Supreme Court issued a landmark decision concerning seven dirty words used by comedian George Carlin in one his monologues that if spoken on the radio would result in fines by the FCC.[1] While we will not say those seven words here, now that we have your attention, we would like to address some of the words that insurance agents and brokers should avoid using in their communications with customers and potential customers in order to help prevent, or lessen, possible E&O claims and lawsuits. In our experience, the use of certain words or phrases by insurance agents and brokers, (especially when used in your website, flyers, advertisements and marketing material, digital or otherwise), should be avoided because they can be used by insureds against the agent or broker in an E&O claim or lawsuit to create duties and responsibilities never agreed upon or intended. In this issue of “The E&O Report”, we discuss some of these words and phrases and why avoiding them is the best practice to follow. We understand that competition is tough. Reaching customers, getting eyeballs and “clicks” is important. Turning those potential customers into insureds is even more important. That goal often requires an aggressive pitch that typically comes with significant puffery. However, what you may deem to be harmless marketing hyperbole, can create a higher legal standard and turn a defensible E&O claim into something much more problematic. No matter the mode or medium, when agents and brokers communicate, verbally or in writing, with customers they should avoid using “loaded” words and/or terms. Examples of some we have seen that have been used against insurance agents and brokers are as follows: “best available coverage,” “broadest coverage,” “full coverage,” “complete coverage” 22

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and the “Cadillac of coverage.” When an insured has a claim that is not covered by their insurance carrier, and these terms have been used by the agent or broker, the insured will often base their E&O claim/lawsuit on their use. Worse still, they will argue for a greater, heightened duty of care, because the words used promise more than the “procure the coverage requested” standard that the Court of Appeals set forth for New York insurance agents and brokers in the Murphy case.[2] For this reason, it is best for you to avoid using these types of words and phrases. Another area that we have seen issues arise with words used against agents or brokers is in the language contained in proposals or quotes provided to insureds. We have cautioned over the years that you should not use the phrase “coverage recommendations” in an insurance proposal. That phrase connotes an assumed duty of analysis not placed upon the broker or agent by force of law in the absence of the assumption. Rather use the term “coverage options” which properly places the responsibility of ultimate decision making on the insured who knows its insurance needs best. We have been involved in many matters where the word “recommendation” was used against our agent or broker clients when an issue or problem arose in connection with coverage for a claim. The insured asserted that the agent or broker should have liability for the uncovered claim because they were the ones that made the “recommendation” concerning the particular coverage that should be obtained. In addition to not using the word “recommendation,” you should also avoid the use of the term “all risk” coverage in proposals or quotes. “All risk” coverage is an insurance term whose technical and legal meaning is not usually known to anyone outside the insurance industry. In E&O litigation insureds, attorneys, and even judges have interpreted that term to incorrectly mean that all risks… of any type…that an insured may sustain are, or should be, covered by the insurance policy.

Wewebsites. Want Over You!the past few you use on your years we have been involved in numerous South VT where the language E&O Burlington, claims and lawsuits employed on agents and broker’s NFP, a leading insurance brokerwebsites, and innocuous to them, is used as a sword to cut consultant that provides employee benefits, at our legal defenses. Never underestimate property & aggressive casualty (P&C), retirement, savvy and attorneys who, like and we do on insurance your behalf,and scour the websites individual wealth management of those suing our clients for usable matesolutions is currently seeking an experienced rial. For example, avoid using, as they can Personal Lines Producer advance his or be problematic, words liketo“professional,” her careeror as“specialist.” a Commercial Lines Producer “expert,” These words can against the agency or brokerage in inbe itsused South Burlington office. This position to argue for a highernew dutysales of care is litigation responsible for generating for and/or a “Special Relationship” to the insured. allThis Commercial Lines policies for andE&O requires will increase the potential lithe ability to work closely with clients, ability. customer service representatives, producers, The prudent insurance agencycarriers. or brokerage management, and insurance The should carefully consider the words that it work environment is professional and very uses to communicate with its customers and supportive. The ideal candidate should have potential insureds. Always remember that the words that you use skills, can and{2+} willyears be used excellent interpersonal of against youand in a ability court oftolaw in connection experience, adapt to emerging with an E&O matter! However, if you handle technology. They will be supported with your words in a careful manner, that is somecommercial lines and mentoring for thing that you cantraining hopefully avoid. prospect/planning, sales calls, proposals and [1] Federal Communications Commission v. Pacifica Foundation, education. A property and casualty license is 438 U.S. 726 (1978). required. NFP offers a highly competitive compensation and benefits package.

Lines Experience to the Next Level? [2] Murphy v. Kuhn, 682 N.E.2d 972 (1997). Keidel, Weldon & Cunningham, LLP concentrates its practice in the defense of insurance agents and broker’s 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 quesPlease sendC. your resume to: tions to James Keidel, Esq. by mail to the main office of Keidel, Weldon & Cunningham, LLP, at 925 Westchester Avenue, Suite Dan Rodliff 400, White Plains, NY 10604, telephone at (914) 948-7000 or eVice NFP mail atPresident, jkeidel@kwcllp.com. The P&C law firm also maintains offices in Syracuse, New York; New York City, New York; Wilton, ConnectiPO Box 2243 cut; Fair Lawn, New Jersey; Warwick, Rhode Island, Philadelphia, South Burlington, VT and 05407 Pennsylvania, Williston, Vermont Naples, Florida.

Free Legal Consultation for VIAA Members – Up to 30 minutes KEIDEL, WELDON & CUNNINGHAM, LLP Attorneys at Law

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Contact: James Keidel, Managing Partner jkeidel@kwcllp.com|914.948.7000 Bar Admissions: Vermont, New York, Connecticut, New Jersey, North Carolina

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A final area we need to address is the language W W W.V I A A .O R G

Leasing: A Seamless Customer Experience

But don’t take it from us. Listen to your peers. Agents Express Leasing is an effective solution to manage your clients needs with today’s best equipment technology. Jay Byrnes of Byrnes Agency experienced how easy our leasing solution is for his agency: “As a longtime member of the “Big I”, I always knew of InsurBanc and their commitment to the independent insurance agent. Recently we wanted to update the agency with a new computer network and desktops, so I turned to InsurBanc for leasing options.

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From start to finish I experienced firsthand how seamless it was to conduct business with them. We have a 35 person agency so to update everyone’s computers was a decent size upgrade. InsurBanc made the process very easy and offered attractive terms and competitive rates which helped to manage the agency’s cash flow”. – Jay Byrnes ~ Byrnes Agency How it works: • Lease terms are 24, 36, 48 or 60 months with a minimum transaction of $5,000 • You are looking for 100% equipment financing, including certain soft costs such as software, shipping, installation and maintenance* • No down payments or advance payments are required • Monthly payments can be customized to meet your special business needs • You are looking for potential tax benefits associated with equipment financing**

We invite you to see for yourself. Contact us today for help preserving your cash flow with an equipment lease solution. These materials are for informational purposes only. The availability of any financing described herein is subject to approval of applicant’s credit, the equipment supplier and the equipment. *Soft costs are limited to 20% of the total amount financed. **Nothing herein constitutes tax advice and customers are advised to consult with their own tax advisors prior to electing specific rates or options. Agents’ Express leasing is a program of De Lage Landen Financial Services, Inc., a third party not affiliated with InsurBanc, a Division of Connecticut Community Bank, N.A.

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W W W.V I A A .O R G Member FDIC

SALES & MARKETING

3 WAYS TO STOP MESSING UP SALES By John Graham

Today, the sales role has been upended. When it comes to accurate sales information, customers are already informed on the product or service long before they speak to a salesperson. Plus, many sales are now so transaction-driven that the salesperson’s role continues to erode.

The belief that “nothing happens until someone sells something” persists today. At some businesses, it’s repeated so often, no one challenges it. As a result, salespeople are frequently viewed as more important than other employees. When someone complains about the sales department, the retort is often, “Hey, they bring us the business, so suck it up and smile.” But even though a lot depends on the performance of the salesforce, this dismal perspective has long passed its expiration date. Consider that marketing is often still viewed as the handmaiden of sales. If marketing just does what it’s told to, it becomes rudderless—all tactics and no

until somebody sells something. Forty years ago, salespeople were the only link between companies and their customers. Looking back, it’s no exaggeration to say customers were their captives. They depended on a salesperson for product or services information, troubleshooting, and support.

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strategy. Then, marketing departments become a “do this” dumping ground, throwing one idea after another against the wall in hopes that something will stick. Unfortunately, marketing’s unique mission is often misunderstood and disregarded. Its critical task—to create customers who want to do business with a brand—gets ignored. And if marketing is unable to do its job, salespeople can’t close sales. Here are three principles that can help your marketing and sales departments achieve better synergy: 1) Get over the idea that nothing happens

So, what now? The answer is a marketing-driven environment that is different from times past. It’s one in which nothing happens until someone decides they want to do business with a company or a brand. Then, the salesperson may arrive to close the deal. 2) Understand why customers should do business with you. Caution! Don’t blurt out the usual trite and self-serving nonsense: “Our people really care,” “We give great service,” “We’ve been in business since 1979.” It’s all hype.

3) Make a commitment to execute your work perfectly. “We’ve got to get this out tomorrow.” “They need it now.” “I know, but it’s a rush.” Such words do more damage to sales than just about anything else. Of course, there are exceptions. But far too often, the exceptions take over and become the rule. “Just get it done” is an attitude that permeates too many companies. The No. 1 enemy in all this is cutting corners. When everything is rush, rush, rush, cutting corners is inevitable, which sabotages a company’s best practices. We settle for “good enough” when it just…isn’t. Cutting corners gives your competitors the advantage. Here are a few examples of what happens: • When a proposal is due tomorrow: “Just repurpose something you used last week.” • When the presentation date gets pushed up: “Don’t worry. Go ahead and wing it.” • When there’s no time for necessary planning meetings: “Just squeeze it into one meeting.” • When the intel isn’t complete: “Run with what we’ve got.” Cutting corners puts salespeople at a major disadvantage. Tolerating it taints their reputation, impairs their performance and, ultimately, costs them sales. If you want to be successful, make a commitment to execute your work thoroughly. John Graham of GrahamComm is a marketing and sales strategy consultant and business writer.

Take the question seriously, because there’s a lot at stake. What separates you from the competition that makes a difference to your customers? What is your value statement? What does your brand stand for? What do you bring to the customer’s buying experience that creates credibility and confidence? Unless your brand makes sense to customers, there’s no sale. W W W.V I A A .O R G

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ETHICS: THE ADJUSTER SAYS IT’S COVERED THOUGH THE AGENT KNOWS IT ISN’T

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William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and director of the Big “I” Virtual University for over 17 years. W W W.V I A A .O R G

Real claim. A dentist’s office computer system was hit by ransomware that encrypted all of his customer files (personal information, xrays, insurance information, accounting records, etc.), including backups. The dentist experienced a significant business income and extra expense and accounts receivable loss.

Everything you insure is on your shoulders

The adjuster’s voluminous denial letter cited almost every exclusion in the policy, from “wear and tear” and “mechanical breakdown” to “faulty workmanship,” none of which stood up to challenge. Finally, the adjuster conceded coverage and was prepared to pay the claim. However, the agent knew that there was no “direct physical loss” as required by the policy’s insuring agreement, being aware of relevant case law that affirmed that. Should the agent provide this information to the adjuster? A similar dilemma… A building contractor assembled a carport and left for the weekend, promising to return Monday morning for some final adjustments, mainly adding a couple of bolts. During a weekend storm, the carport flew away causing a lot of damage. The adjuster wouldn’t pay for damage to the carport under the contractor’s CGL, citing several exclusions, including: “Property damage” to “your product” arising out of it or any part of it. However, “your product” is defined as “Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by….” So, the agent argued that the carport, now affixed to the land, was real property, so the product exclusion did not apply. The adjuster then cited the following exclusion: “Property damage” to…That particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it…this exclusion does not apply to “property damage” included in the “products-completed operations hazard”. The agent pointed out that the “products-completed operations hazard” said that “…Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed,” arguing that this was a completed operations claim and the exclusion, therefore, didn’t apply. At this point, the adjuster conceded that the claim was covered and was prepared to cut the check. However, the agent knew that a so far unmentioned exclusion applied: “Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard”… Does the agent bring this to the adjuster’s attention or let him pay the claim? March is Ethics Awareness Month. How would you handle these two ethical dilemmas? What would Ace Insura, Claims Detective, do?

Who do you trust to have your back? VIAS offers the most prestigious Errors & Omissions carrier(s) in the country: Westport Insurance Company & Utica National Insurance Group

For a quote or for more information contact Helen Collins at hcollins@viaa.org or 1-844-609-1481

www.iiaba.net/eohappens 30

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VIAS is a subsidiary of Vermont Insurance Agents Association viaa.org W W W.V I A A .O R G

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Daniel L. McCabe Promoted to President and CEO of Concord

Proﬁt Growth Reputation

Set the tone to sell.

Group Insurance Companies The Concord Group Insurance Companies announces that Daniel L. McCabe has been appointed the President and Chief Executive Officer of the Concord, NH based company. Most recently, Mr. McCabe served as Senior Vice President and Chief Operating Officer. Mr. McCabe joined the company in early 2017, and brings a wide range of experience from his over twenty year career in the Insurance Industry with senior leadership positions in Underwriting, Product Development, Marketing and Operations at Chubb, Travelers, The Hanover, MAPFRE (formerly Commerce Insurance) and Lexington Insurance. Mr. McCabe is a native of the New Hampshire Lakes Region, attended Proctor Academy preparatory school and graduated from Holy Cross College in Worcester, MA with his Bachelor of Arts degree before entering the Insurance Industry. The promotion of Mr. McCabe reflects the Board of Directors’ confidence that he will successfully manage the company’s affiliation with Auto-Owners Insurance, and effectively lead organizational expansion efforts throughout New England in both the personal lines and small to mid-sized commercial lines disciplines. Mr. McCabe added, “I am excited to be given this opportunity with The Concord Group at such a significant time in the company’s history. I believe strongly in the value and importance of the Independent Insurance Agent to both consumers and local communities, and am proud to lead a company with over 90 years of commitment to such. I look forward to working with Auto-Owners Insurance to develop our capabilities and product offerings, and substantially expand our presence with Independent Agents throughout New England.” Concord General Mutual, an A (Excellent) A.M. Best rated carrier, began in 1928, and operates in the New England area, including Maine, Massachusetts, New Hampshire and Vermont. Concord Group is recognized as a leading insurance provider through the Independent Agency System in these states.

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Pryce, Willett Promoted by Union Mutual

Cyber risk, solved.™ MONTPELIER – Jeffrey S. Pryce and Emile F. Willett were recently promoted by Union Mutual, the Company’s President and CEO Michael W. Nobles announced. Jeff was elevated to Assistant Vice President, Claims, and Emile was promoted to Assistant Vice President, Underwriting and Product Development. “Our Companies and independent agency partners have experienced tremendous growth over the last few years and I am thrilled that we are able to recognize the efforts of our dedicated staff through continued expansion of their roles and responsibilities,” Nobles said. The promotions of Pryce and Willett were effective March 1, 2019. Both are based in the Company’s Montpelier, Vermont office.

Coalition is the best way to manage cyber risk. We provide comprehensive insurance coverage, free cyber security tools to protect your clients’ businesses, and expert claims response backed by Swiss Re and Argo Group.

Jeff joined the Companies in 2014 and was most recently the Director of Underwriting and Loss Control. Emile joined the Companies in 2017 and was most recently the Assistant Vice President, Marketing and Product Development. Union Mutual of Vermont Companies, founded in 1874, is a property casualty insurance group consisting of Union Mutual Fire Insurance and New England Guaranty Insurance Company Inc., both based in Montpelier, Vermont; Eastern Mutual Insurance Company, based in Greenville, New York; and Community Mutual Insurance Company, based in Troy, New York. The four companies write a total of $187 million in direct premium annually through independent agents throughout New England and New York, and are all rated A-(Excellent) with a Positive Outlook by A.M. Best.

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Differentiated coverage Pryce

Willet

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• Pre- and post- claims assistance

• Social engineering

• BYOD coverage • Social media / IoT coverage

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Coalition, Inc. · 590 Pacific Ave., San Francisco, CA 94133 · join@thecoalition.com · (833) 866-1337 Insurance products underwritten by Coalition Insurance Solutions, Inc. (CA License # 0L76155) Copyright © 2017. All rights reserved. Coalition and the Coalition logo are trademarks of Coalition, Inc. or its affiliates.