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May the Warmth of the Holiday Season Follow You Throughout the Year

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.t

Green Mountain Agent is a publication of

CONTENT ________________ December 2019

04 Letter from the President

600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912

06 Put A Freeze on Holiday Fires 07 Westport Changes to the Loss Control Credit Program

VIAA Officers President Alan K. Kinney Vice President Dan Rodliff Secretary/Treasurer Michael Barrett National Director Ron Bixby

10 VIAA Education Paths

14 Feature: Knowledge 17 Young Agents Committee 20 On the Hill

Directors Chip Ams Erin Odell, CIC Paul Plunkett Jessica Fleury Ex-Officio Staff Executive Director Mary Eversole

27 E&O Corner 32 Feature: Sales & Marketing 38 Insurance Commentary 44 Feature: Claims Happen 46 Company & Agency News

LETTER FROM THE PRESIDENT ______________________________ December 2019

Happy Holidays! 2019 will soon be in the history books and 2020 is right around the corner. I want to focus my message for this issue on the importance of education for everyone in the agency. I know that time is precious and that most days we all wish for a few more hours to get everything done. Unfortunately, squeezing in good education (not just good enough education) is a challenge. Trying to meet state continuing education requirements and also provide skills training can be difficult. This past year, we have worked to develop a tool to help you streamline and simplify the education paths for the two key employee roles, Customer Service Representatives and Producers. We have developed a track of training from prelicensing to advanced programming that can help guide you and your employees. We have dedicated an article in this month’s magazine to this new tool (pages 9 to 11). We are excited to launch it and hope that you will find it a great guide in challenging your employees to be their best. I wish you all a wonderful holiday season, filled with joy and peace.

Alan Kinney VIAA President

WESTPORT CHANGES TO LOSS CONTROL CREDIT PROGRAM STARTS JAN 1 By Richard Lund, Senior Underwriter and Vice President, Swiss Re Corporate Solutions Swiss Re Corporate Solutions and IIABA have worked together for more than 30 years to provide the premier insurance agents errors and omissions program in the marketplace. A cornerstone of the program has been to provide comprehensive risk management tools to help agencies avoid an E&O claim. Beginning in the 1970's, Swiss Re's predecessor Employers Reinsurance Company developed its first risk management (then called "loss control") seminar with an 8-page outline and more than 30 pages of surveys, coverage checklists, and examples of the potential errors, omissions and claims that an insurance agent could be subject to. As time progressed, this initial effort has grown to the 15 module "Meeting the Challenge of Change," consisting of over 300 pages of materials, examples, sample letters, checklists and many other risk management resources to help you and your agency avoid an E&O claim. The next evolution of Swiss Re risk management resources was the creation of the E&O Happens Risk Management website,, which contains numerous articles, examples, sample forms and letters, webinars, and other important materials and resources that can help prevent insurance agents from becoming an E&O statistic. A key to the success of the Big “I�

Professional Liability program has been to reward those agencies that take advantage of these risk management resources by applying a premium discount to those who include their staff in risk management courses. Swiss Re has been able to prove that there is a direct correlation between attending a risk management course and reducing E&O claims. Until now, the credit has been limited to 10% of the total E&O insurance premium. Swiss Re Corporate Solutions and IIABA are pleased to announce that with the development of additional risk management resources, the total premium credits can be increased up to 30% of your agency's insurance premium. Effective 1/1/2020, policyholders can take advantage of these additional risk management resources: 10% Attendance at a qualifying Risk Management course 5% At least 50% of agency staff Attendance at a qualifying Risk Management* course 5% Using coverage checklists* 5% Agency Website Improvement review by a qualified auditor* *(Risk management course attendance is required for application of the other credits. Maximum additional credit is 10% for a total of 20%) 10% Agency Improvement review by a qualified auditor

Westport Loss Control Credit Program Changes January 1 continued Understanding that the key to avoiding E&O claims is to have more risk management in the hands of more people, and that the keys to learning have changed since the 1980's, the requirements are being simplified: The Risk Management Course reduced to 3 hours from 6 Having a claim will no longer result in the loss of the risk management credits The number of staff required to attend has been simplified to better reflect agency makeup In some states, a written exam may be substituted for attendance at a risk management course Why change the risk management credit now? It’s simple: data proves that risk management works! The new risk management program structure enables more people to have better access to risk management materials, which makes your agency operate better and helps you avoid E&O claims. To learn more about how to take advantage of risk management credits, contact your dedicated Big “I� Professional Liability Program Manager, Helen Collins at or by phone at 1-844-6091481. This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group ("Swiss Re") or the IIABA and/or its subsidiaries and/or management and/or shareholders.


O & E




By Heather Howell Wright The Insurance Services Office, Inc. (ISO), which develops standard insurance policy forms for use by insurers, recently released its first cannabis-related endorsements (Cannabis Endorsements) to the business owner policy form. This new release provides five cannabis exclusion endorsements; two of the endorsements change property coverage for cannabis, and the other three endorsements change liability coverage for cannabis. As with any insurance policy or endorsement, understanding the specific language of these new cannabis endorsements is critical to any insured engaging in cannabis-related activity. The ISO business owner policy is a package policy that provides a number of property and liability coverages for business owners. Historically, property loss of cannabis-related businesses was not “covered property” under the Property Not Covered provision of the form, which provides that covered property does not include “contraband, or property in the course of illegal transportation or trade.” For decades under federal law, cannabis was effectively “contraband” for insurance purposes by statutes such as the 1937 Marihuana Tax Act and the 1970 Controlled Substances Act. The 2018 Farm Bill, however, changed the legal status of hemp, cannabis with a concentration of no more than 0.3% tetrahydrocannabinol (THC). Specifically, the Farm Bill amended the Controlled Substances Act and the Agricultural

Marketing Act to remove hemp from regulation as a controlled substance.With an increasing number of states legalizing marijuana for medical or adult-use and the 2018 Farm Bill legalizing hemp (in certain circumstances), ISO recognized that cannabis-related property may no longer constitute “contraband” under the business owners policy. Thus, ISO released five Cannabis Endorsements, which were approved for use in a majority of states in September 2019. BP 15 30-Cannabis Property Exclusion BP 15 31- Cannabis Property Exclusion with Hemp Exception BP 15 32-Cannabis Liability Endorsement BP 15 33-Cannabis Liability Exclusion with Hemp Exception

BP 15 34-Cannabis Liability Exclusion with Hemp Exception and Lessors Risk

ISO Revised Policy Forms to Address Cannibis continued The Property Exclusion Endorsements (BP 15 30 and BP 15 31) clearly exclude coverage for cannabis by adding the term “cannabis” to the Property Not Covered provision of the business owner property form. The Liability Exclusion Endorsements (BP 15 32, BP 15 33, and BP 15 34) add a specific exclusion to the liability portion of the business owner policy form that broadly excludes from coverage any bodily injury, property damage or personal and advertising injury arising out of a laundry list of cannabis-related activities. The most important part of these endorsements is the broad definition of the term cannabis. Each of the Cannabis Endorsements defines “cannabis” as “any good or product that consists of or contains any amount of tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether or not any such THC or cannabinoid is natural or synthetic.” The Cannabis Endorsements each specify that the term “cannabis” includes “[a]ny plant of the genus Cannabis L. or any part thereof, such as seeds, stems, flowers, stalks, and roots, or [a]ny compound, by-product, extract, derivative mixture or combination, such as (1) resin, oil, or wax; (2) hash or hemp; or (3) infused liquid or edible cannabis.” For purposes of the Cannabis Endorsements, hemp, including CBD derived from hemp, is cannabis and is excluded from coverage — unless there is an exception to that exclusion. As noted by their titles, three of the five Cannabis Endorsements contain a Hemp Exception. Form BP15 31- Cannabis Property Exclusion with Hemp Exception adds “cannabis” to the Property Not Covered provision of the business owner form, but then provides that this exclusion does not apply to goods or products containing or derived from hemp, including (but not limited to) the following: seeds, food, clothing, lotions, oils or

"The most important part of these endorsements is the broad definition of the term cannabis."

extracts, building materials, or paper. Similarly, the hemp-exception liability endorsements provide that the cannabis exclusion will not apply to liability for bodily injury, property damage, or personal and advertising injury arising out of goods or products containing, or derived from, hemp. Business owners operating hemp-related businesses should be cautious in reviewing their insurance policies to ensure that if their policies have been endorsed with any of these new ISO Cannabis Endorsements, each endorsement includes the Hemp Exception. Otherwise, under the broad definition of “cannabis,” an ISO cannabis endorsement without a hemp exception would exclude coverage for any hemprelated products. Heather Wright is a partner at Bradley Arant Boult Cummings LLP and has experience in the trial and appellate litigation of a wide variety of commercial matters. She concentrates her practice on advising commercial insurance policyholders regarding coverage available through commercial general liability, directors and officers, errors and omissions and inland marine or contractors equipment insurance policies. This piece first published on Bradley’s “It Pays to Be Covered” blog and is republished here with consent.

November 2019 Young Agents Meeting Big excitement for the FIRST InVEST program in Vermont at Montpelier high school Vermont YACS won the 2019 Outstanding Breakthrough YAC Award at the Big I convention in September YAC’s raised $10,000 for the Make-AWish program

Young Agent Committee Leaders 2019-2020 Chair Kody Lyon, AAI, CPIA Co-Chair Sara Berry, AAI Secretary/ Treasurer Katie Andrews, CPIA Outreach/ InVEST Coordinator Ian Sutherland, CIC, AAI-M Communications Coordinator Jessica Saladino, CISR Legislative Coordinator Chris Hull Past Chair Aislyn Allen, CISRE

Thank you to Liberty Mutual for sponsoring the YAC Annual Meeting!

ON THE HILL: Big ‘I’ Reaction Mixed on Overtime Rule

Members of the Independent Insurance Agents & Brokers of America (the Big “I"), along with other employers, will have just under 100 days to comply with a final overtime rule announced yesterday by the U.S. Department of Labor (DOL). Effective January 1, 2020, the rule sets the minimum salary threshold for overtime eligibility at $35,568. The regulations implement the Fair Labor Standards Act (FLSA)'s overtime mandate and will make an estimated 1.3 million additional U.S. workers eligible for overtime pay. “While not perfect, the final rule is a significant improvement over the overtime rule proposed during the Obama administration, which would have caused a significant increase in direct compliance costs and paperwork burdens for our small business members as well as significant losses in productivity for the economy," says

Charles Symington, Big “I" senior vice president of external, industry & government affairs. “While still a challenge for many of our members, we appreciate that the final rule did not set any automatic updates and that employers will at least be able to count non-discretionary bonuses, incentives and commissions--up to 10% of an employee's salary--toward the threshold." The FLSA's exemption threshold for “highly compensated employees" will be set at $107,432, lower than in DOL's initial draft but still higher than the previous threshold of $100,000. In 2016, the Big “I" was the only insurance trade association to join a lawsuit with the Chamber of Commerce, the National Federation of Independent Business and other business groups to successfully prevent the DOL from moving

Big ‘I’ Reaction Mixed on Overtime Rule continued

forward on the previous rule which had doubled the exemption threshold from $23,660 to $47,476 for “white collar" exemptions and raised the exemption threshold from $100,000 to $134,004 for “highly compensated employees." It had also set automatic updates to the thresholds every three years. The Big “I" was concerned the 2016 rule would have diminished employee flexibility, increased administrative burdens and costs on small businesses and negatively impacted insurance consumers through reduced customer service. “Even with these changes, a number of our member agencies may still find it difficult to comply with these exemptions," says Heather Eilers-Bowser, Big “I" counsel, federal government affairs. “While the new minimum thresholds for 'white collar' exemptions and 'highly compensated executive' employees are much lower than proposed during the last administration, they remain a concern for many independent agents and brokers."

Big ‘I’ Applauds House Financial Services Committee for TRIA Reauthorization The Independent Insurance Agents & Brokers of America (the Big “I") thanks the House Financial Services Committee for unanimously passing H.R. 4634, the “Terrorism Risk Insurance Program Reauthorization Act." “The scheduled expiration of the Terrorism Risk Insurance Program (TRIP) at the end of 2020 is quickly approaching, and the Big 'I' applauds the Committee for taking action to extend the program on a longterm basis well before the scheduled expiration," says Charles Symington, Big “I" senior vice president of external, industry and government affairs. “The Big 'I' especially wants to thank Chairwoman Maxine Waters (D-California) and Ranking Member Patrick McHenry (R-North Carolina) for recognizing the critical role that the program plays in the U.S. economy." H.R. 4634 would provide for a seven-year reauthorization period, require a U.S. Government Accountability Office (GAO) report on cyber terrorism risks, and require biennial Treasury reporting that includes disaggregated data on places of worship. Since its initial enactment, TRIP has undergone additional reauthorizations in 2005, 2007 and 2015, with many reforms to protect taxpayers and increase private sector involvement. There is still a very real need for the program, as the threat of terrorism is still ever-present, and the unique nature of this risk has not changed. The current authorization of the program is due to expire on Dec. 31, 2020. “Following the bipartisan passage out of the Financial Services Committee, the Big 'I' urges the U.S. House of Representatives to pass this legislation well in advance of the program's scheduled expiration," says Wyatt Stewart, Big “I" senior director, federal government affairs. “This legislation is vitally important to maintaining the strength of the commercial property-casualty insurance market and would provide much needed stability to the U.S economy."

C E O & R O N ER

The E&O Report: A Thirty Year Anniversary By James C. Keidel, Esq., Keidel Weldon & Cunningham, LLP

November 1989 was a significant historical month. There were two important things that happened in November 1989 that we all should take a moment to reflect on. The first event was the taking down of the Berlin Wall that divided East and West Germany. This event help unify a city that had been divided for almost thirty years. The other great historical event that occurred in November 1989 was the publishing of the first E&O Report . The title of the first E&O Report was “Insurance Agent Held to Have No Separate Obligation to Notify Insured of Cancellation Where Insurer Required to Give Direct Notice."[1] That E&O Report provided an overview of a court opinion which provided insurance agents and brokers with guidance as to how they should handle a particular type of cancellation issue. The first E&O Report stated that the purpose of The E&O Report was to publish “A special report reviewing trends in insurance agent's and broker's errors and omissions liability." Ever since that time thirty years ago, association's have continued to publish The E&O Report to help keep agents and brokers informed of important trends and issues that affect their businesses and insureds. Even after thirty years, The E&O Report is one of the best-read publications issued by the association. In the thirty years that have passed since that very first E&O Report was published, many issues and trends have been covered. Trends and changes in the law, Regulations and Statutes, Acord forms, documentation, case

studies, agency and brokerage agreements, and hundreds of other topics have been addressed. During the past thirty years, many things have changed in both the insurance agency world and also the world as a whole. Though the world has changed tremendously over the past thirty years, one thing that has not changed is the importance of the independent insurance agent and broker. Every day, the independent agent or broker works to help protect both families and businesses from the ever-changing risks that they face in the world. Another thing that has not changed over the past thirty years is the purpose of the E&O Report. Every month we attempt to report to you about the trends in E&O law that insurance agents and brokers should be aware of in their daily business lives. This is something that we will continue to do in the years and decades ahead. For this month, however, we are taking a break from reporting on the E&O trends and issues and instead we are taking time to recognize the thirtieth anniversary of The E&O Report. Those of you who know us at Keidel, Weldon & Cunningham know that we are truly committed to E&O loss control and sharing with independent agents and brokers the information and practices that they should follow in order to help protect both their insureds and themselves. Over the past thirty years, we have witnessed firsthand the importance of every agency or brokerage following good E&O loss control practices. We understand that today's insurance agency or brokerage that has a true commitment to E&O loss control will not only survive, but will continue to thrive, in the years to come.




By John Houle One of your greatest resources is right in your own office. Your current database of clients has the immediate opportunity to yield one of your highest returns. This article sets forth a strategy you can implement to successfully cross-sell your current clients by using today’s best inbound marketing strategies. Inbound marketing is about publishing helpful and interesting content your audience wants to consume. Every good marketing campaign starts with the customer in mind; unfortunately, many campaigns focus on pushing features and details consumers really don’t want to hear. It’s not about bragging about what you can do, but more about how helpful you can be to the person on the other end. Show people how you can actually save them money, or detail for them how they will benefit in the long run with better coverage, and they will reward you for your thoughtful advice. Spend your time upfront mining your database. Before you send out that first cross-sell email or informative Enewsletter, you need to segment your lists. Most management software enables you to export your contacts by type of policy. For example, if you’re an insurance agency, you could use the following segmented lists of customers: Auto-No Homeowners Insurance; Homeowners-No Auto; Auto&Home-No Umbrella; Auto& Home-No Life Insurance. For a

commercial lines campaign, you could use the following lists: BOP-No Worker’s Comp; BOP-No Commercial Auto; BOPNo Professional Liability. Identify your campaign audience. Who are we talking to? You first want to understand your buyer persona before launching into a campaign, so you can target them correctly. Focus on what’s most important to them. Most people react first to their own wallets. So, lead with the savings and actual realistic dollar amount that they can keep . In terms of number of communications to this targeted list, I suggest engaging with them every month with a communication, varying between a direct sell and a soft sell. I would rotate with an E-newsletter that always includes an article about savings, and an actual client testimonial (even better if it’s a video) that illustrates how a real person benefited. Create landing pages with offers. You want to create individual landing pages off of your website for the different, specific programs you’re promoting. You should have a clear value proposition and call to action with a form for the user to complete, in addition to a link for an immediate quote. You also want to make sure you optimize your landing pages for Search Engine Optimization (SEO), so they come up high in the search engines. The goal of a landing page is to directly convert a

How to Successfully Cross Sell to Your Clients continued


visitor into a buyer, so be clear, concise and to the point. Plan + build your automation + nurturing flows. Planning and building follow-up campaigns to nurture leads into new clients is a process. You should always present the option for a direct call to the client on their time frame to explain the benefits one-on-one. If a client does not want immediate contact, I would suggest a follow-up communication with an actual client video testimonial after two to three days. Next, they should receive an Enewsletter with three blog posts from your website, the lead story being about their primary topic of interest. Then they should be entered into your internal marketing campaign, receiving your electronic newsletter each month. Write about what you know best. Your insurance knowledge is your greatest advantage especially over direct writers. But you need to tell people about it, and do it often if you want to move the needle. You should write 25-50 articles (150-300 words in length) about how insurance benefits consumers. Many of these articles can be written in advance, not requiring you to write every week. Share your blog with consumers. Once you’ve written your blog, you need to promote it. First, you will send it your targeted list via email, but you need to also expand your reach and audience. You want to do a post about your blog on Facebook and publish the article directly on LinkedIn. Consider paid search and other channels. Your blog post and social media can be used to drive traffic to the top of your sales funnel. I would recommend setting up a budget for each campaign to boost your blog posts on Facebook and LinkedIn to

“lookalike” audiences of your current clients. Just be sure that you are measuring the effectiveness of these channels. Tracking your results. You set goals at the very beginning so that you can evaluate your success. You want to track the URLs of the visitors coming to your landing pages, and in particular, you want to review where your traffic is coming from and how visitors are finding you. You will be able to analyze where and when your clients are visiting your specific landing pages, and you’ll ultimately be able to track all your new business. This will help you make educated decisions on which marketing activities to continue to invest in and which campaigns work the best. This will not be a one-and-done campaign. This is a campaign you want to continue to replenish with new leads and contacts. As you attract new customers into your agency, you will need to continue to grow and nurture them into multi-line clients. John Houle is the president of JH Communications. He can be reached at 401.831.6123 or at

Auto Insurance Is NOT a Commodity

William C. Wilson, Jr. CPCU, ARM, AIM, AMM is the founder of 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.

Auto Insurance Is NOT a Commodity A boomerang kid lost his job and moved back home with his parents. While driving his mother’s car, he negligently struck another vehicle, causing several thousand dollars in property damage. The insurer denied the claim on the basis that the driver’s residency was not reported to the carrier within 30 days of his return home. 15 minutes can save you 15%, anyone? The boomerang claim denial arose from an exclusion in the insurer’s policy for accidents involving undisclosed household residents, unless the insurer had been notified within 30 days of the residency. What insured would think to report something like this to his or her auto insurer? If an “ISO standard” policy had been in place, they wouldn’t have to. At a rapidly accelerating rate via TV advertising, online “ease of use” promotion and proliferating media articles, consumers are being duped into believing that personal lines insurance is a commodity, with the only significant difference being price. Nothing could be further from the truth. While a lower price doesn’t necessarily imply lesser coverage, that is often the case. In the words of sales legend Morty Seinfeld, “Cheap fabric and dim lighting. That’s how you move merchandise.” The Myth Perpetuates According to a recent Edleman Trust Barometer Survey, the most credible spokespeople for financial services companies are “experts.” This is disturbing, considering recently published studies by firms like McKinsey & Company, A.M. Best, Nomura Equity Research, and Gartner proclaim that

"Cheap fabric and dim lighting. That’s how you move merchandise." auto insurance is now officially a commodity. Some of their conclusions predict the demise of the insurance agent as the direct sales model wins the commodity war. Have any of these researchers ever read their own auto policies, much less compared the coverages in multiple policies? They might have a point if personal lines actually was a commodity proposition. But that doesn’t stop the media from perpetuating this myth. The typical “How to Save Money on Car Insurance” article cautions consumers to make sure they compare “apples to apples.” Translation: Make sure you’re getting premium quotes for the same liability, uninsured motorist and medical payments limits and the same physical damage deductibles. It’s as if broad coverage categories, limits and deductibles were the only differences between auto insurance policies. A Wall Street Journal article, “Car Insurance Rate Shopping Can Pay Off,” says, “The Consumer Federation recommends consumers shop around to get quotes from insurers that don’t use agents, such as Amica Mutual Insurance and USAA (for families with military ties), and then ask an agent to beat the best price.” Not a word about any coverage differences—only the price. Pick Your Exclusion

Auto Insurance Is NOT a Commodity Continued A Florida insured’s auto was in the shop, so she rented a car and later loaned it to someone, who loaned it to someone else, who had an at-fault accident that killed a child and seriously injured other children. The claim against the operator and named insured was denied by the insurance company on the premise that the vehicle was not a “temporary substitute” and the operator was not a “permissive” user, as defined in this insurer’s personal auto policy. The son of a friend of an agency owner was street racing when he crashed, seriously injuring himself and his passenger. The claim was denied by the insurance company based on their interpretation of their personal auto policy’s “racing” exclusion. A church allowed a member to park his car in their heated “bus barn.” While exiting, he wrecked the car, causing structural damage to the building. The claim was denied by the insurer, citing the “care, custody or control” exclusion in the personal auto policy. What do these claims have in common, other than denial by the insurance company? Each of them would have been covered if the policyholder had purchased an “ISO standard” personal auto policy rather than the policy in question. With regard to the Florida claim, the ISO personal auto policy defines “temporary substitute” and “permissive use” much less restrictively than the policies above. The named insured might have saved 15% in 15 minutes when she purchased her auto policy, but it proved to be a bad deal when she had to take her claim to the Florida Supreme Court to recover. And in the Court’s reversal of the Court of Appeals

ruling favorable to the insurer, the rationale for coverage was less about the policy language that appeared to support the insurer’s claim denial and more about Florida’s rather unique dangerous instrumentality doctrine. In the street racing example, the ISO Personal Auto Policy excludes injury that arises from accidents that take place “inside a facility designed for racing,” while the auto policy in question excluded almost any racing activity, including one taking place on a public street. Fortunately, the father of the injured child had a Trusted Choice® independent agent to aggressively advocate on his behalf by pointing out to the insurer that the exclusion applies only to organized racing activities, not impromptu street racing. More than a dozen coverage opinions from the Big “I” Virtual University Ask an Expert service supported the agent’s efforts. Do you think someone who purchased insurance online from “a guy in khakis” would enjoy the same claim advocacy? Like the ISO personal auto policy, the “bus barn” claim also involved a “care, custody or control” exclusion. But the ISO policy makes an exception for damage to a private garage. The policy in question has no such exception—not to mention the fact it’s unlikely that the barn was actually in the driver’s care, custody or control. So both the policy itself and the insurer’s interpretation of the exclusion were faulty from the insured’s perspective—rendering the carrier’s slogan, “same coverage, better value” untruthful. The Real Story The differences between auto insurance policies are many, varied and potentially catastrophic. As the late insurance

Auto Insurance is NOT a Commodity continued educator John Eubank, CPCU, ARM, often said, “The bitterness of no coverage is remembered long after the sweetness of low price has been forgotten.” For decades, agents have seen a decline in personal lines market share. A primary reason is the all-consuming focus on price alone and now the erroneous premise that personal lines insurance has become a commodity, simply because someone says it is and people believe it. It’s time for agents to dispel this destructive myth. This is not about market share. It’s about preventing catastrophic loss to innocent people who are sold a bill of goods via cute advertising of increasingly stripped-down insurance products that enable competitive pricing. Arm yourself with information to educate your clients and bust the myth that insurance is a commodity. Copyright 2016-2019 by Reprinted with permission.

Avoiding Surety E&O Claims


By Jack Anderson

With the vast number of surety bonds available agents need to be cautious when working with customers to meet their needs. Claims data from Swiss Re and Big “I” Professional Liability Program shows that bond related E&O claims have roughly three times the claims severity as other claims. Like with any coverage or customer exposure agencies need to feel comfortable and have the expertise to understand the process of writing a bond and the coverage they afford. If they don’t the chances of an E&O claim increase dramatically. Working with a broker that can assist you through the process of placing bonds can make the difference between a satisfied customer and a future E&O claim. This article looks at the common missteps that could lead to E&O claims that agents can make when handing surety bonds. Also provided are some ways to protect the agency, including some sound risk management procedures to follow.

Common Surety Handling Missteps Failure to Advise Proper Rate - Often times agents feel compelled to communicate a rate to a client. In many cases, that rate ends up being below what can actually be obtained. Failure to Properly Execute Bid Bonds If a bond is not prepared in strict accordance with the owner’s requirements, the client runs the risk of presenting a bid that may be determined “nonresponsive” even if that client is the low bidder. Failure to Deliver Bid Bonds in a Timely Manner or to a Proper Address - Bid bonds sent via regular mail run the risk of being delivered late. Regular mail might be less costly up front, but could end up being very expensive in the long run when a client misses a bid date due to late delivery. This could also result from someone in your office using an incorrect address.

Avoiding Surety E&O Claims Continued Failure to Give Proper Advice Regarding Bid Security - A bid bond assures that a performance bond will be put in place by the authorizing surety, while using a cashier’s check as bid security does not. Advising a client to use a cashier’s check might be perceived as expedient, but the amount of the check is ultimately at risk of being forfeited. Failure to Receive Approval from the Surety - By improperly issuing a bond, an agent exposes him/herself to potential E&O claims from both the carrier and the client. The surety will seek recourse from the agent if the unauthorized bond goes into claim. If the client’s bond program is disrupted as a result of an agent’s actions, the client might have recourse for lost financial opportunity. Failure to Adhere to Conditions & Exclusions of Line of Authority - In instances where a surety has extended a line of authority to an agent and the agent has issued a bond that falls outside the line of authority, the agent will be held accountable for any loss a surety experiences as a result of the agency mishandling his/her authority. Failure to Provide Timely Information to the Surety - An agent is responsible for communicating all information to the surety that is relevant to the surety’s decision to authorize a bond. The surety may have recourse against the agent for information that is omitted if that information would have been material to a surety company’s ability to avoid a claim situation. These are only a few examples of situations that create E&O exposure for agents. By implementing internal risk management policies and standardized procedures, and addressing proper steps and expectations for associates who handle bonds for your clients, you can significantly mitigate your E&O risk.

Jack Anderson is a CPA and Vice President, Chief Financial Officer, and Secretary of Goldleaf financial. In addition, he is President and Chief Manager of Goldleaf Escrow. As a former audit CPA, he has extensive knowledge in accounting, financial analysis and business valuation. Goldleaf is a highskill, high-services national surety bond broker with licenses in all 50 states, the District of Columbia and the US Virgin Islands. Based in Minnesota, Goldleaf currently provides prompt, professional support to more than 1,500 insurance agencies around the country that need occasional or regular help placing bonds for their clients. Goldleaf provides Big “I” members with access to its products through Big “I” Markets with no access fees, no volume, and competitive commissions. Visit for more information


Acuity Earns ACORD Awards for Millennial Advancement and Business Process Improvement Acuity earned the ACORD Millennial Women's Insurance Advancement Award and the ACORD Case Study Award. ACORD is a nonprofit organization recognized as the global standards-setting body for the insurance and related financial services industries. The ACORD Millennial Women’s Insurance Advancement Award recognizes companies that have made impressive strides in attracting and retaining millennials within the insurance industry. “Acuity focuses on creating a workplace culture that promotes growth and advancement of employees of all ages, genders, and backgrounds,” said Ben Salzmann, Acuity President and CEO. “Our workplace initiatives have had a significant impact on staff recruitment, development, and retention, including millennial women.” The ACORD Case Study Award is presented to organizations that have demonstrated how the implementation of ACORD standards significantly improved business processes. Acuity earned this award for its use of standards to successfully integrate with agency partners, leading to rapid growth.

Accepting Acuity’s ACORD Millennial Women's Insurance Advancement Award from Bill Pieroni, President and CEO of ACORD (far left) and ACORD Board of Directors member Tony Mattioli (far right) were Margaret Stanskas, Commercial Lines Underwriter (center left) and Tricia Tienor, Manager -Information Systems.

Mike Nickels, Acuity Senior Systems Architect (center) accepted Acuity’s ACORD Case Study Award from Bill Pieroni, President & CEO of ACORD (left) and ACORD Board of Directors member Tony Mattioli.

The Richards Group to Merge with IPG Employee Benefits The Richards Group is pleased to announce that it has reached an agreement to merge with IPG Employee Benefits, based in Keene, NH. The two firms have long been leaders in employee benefits consulting across the twin state region, and the merger further strengthens their collective offering to clients. “We’re delighted to have Walter Rohr, John Round and their team join The Richards Group. IPG has an excellent team, strong client relationships and a terrific reputation”, said Drew Richards, Vice President of The Richards Group. “We’ve had clients in Keene for years and have had considerable growth in Cheshire County over the past decade. We’re thrilled to be part of the vibrant community in Keene and joining with IPG certainly deepens the commitment we’ve already made to the area.” “We (IPG) are excited to be combining with another familyowned and locally-based organization that values integrity, respect, and hard work”, added John Round, President of IPG. “There is a natural fit between the two companies as we will immediately benefit from the resources and talent they have built in Vermont and they from our expertise and the personnel we have developed here in New Hampshire. Truly, our clients and the communities we will both continue to serve are the biggest winners in this merger.” “Many of you likely know IPG by reputation and as an admired and respected competitor in the Employee Benefits space”, commented Tom Scull, Vice President of The Richards Group. “In combination with our existing Employee Benefits operations, this creates one of the most impressive and formidable Benefits organizations in Vermont, New Hampshire and frankly, beyond.” The Richards Group will move their local employee benefits and insurance staff to IPG’s Washington Street offices, as they continue to hire in Keene. IPG will begin operating under The Richards Group name right away.

Campbell Joins Union Mutual as AVP, Personal Lines Underwriting & Business Development Sean P. Campbell recently joined Union Mutual of Vermont Companies as Assistant Vice President, Personal Lines Underwriting and Business Development, President and CEO Michael Nobles announced. Sean joins Union Mutual from Preferred Mutual, and has extensive insurance experience in Underwriting, Claims and Marketing. At Preferred, he served as Director of Personal Lines Underwriting, Underwriting Manager, Casualty Operations Manager, Liability Claims Manager and Liability Claims Specialist. Prior to Preferred, Sean was a Claims Examiner and Litigation Specialist with New York Central Mutual Fire Insurance Company. “All of us at Union Mutual are thrilled to have Sean join our team. Following several years of unprecedented growth, the addition of Sean to our management team will allow us to continue leading the way in providing our agency partners throughout New England and New York with highly competitive products and service second to none” Nobles said. Sean holds designations of CIC, AIM, AIC and AIS, and is a member of the National Alliance of Professional Insurance Agents, NAMIC, NYA and the Utica Claims Association. He will be based in central New York.

Concord Group Expands Businessowners Policy Offerings The Concord Group Insurance Companies announced expansive additions to its businessowners policy offerings this Fall. The new coverages offer businessowners enhanced protection against evolving risks, including the growing threat of cyber attacks. “Cyber crime is posing increasing issues for businesses of all types and sizes,” said Daniel McCabe, President and CEO of The Concord Group. “As the internet continues to change how we conduct business, anyone who maintains Personal Identifying Information or uses electronic devices is vulnerable. In response to this increasing exposure, we are pleased to offer our policyholders and agents improved peace of mind with this new coverage.” Cyber attacks have been on the rise in recent years, and a survey conducted by the U.S. Small Business Administration found that 88% of small business owners believed themselves vulnerable to this threat. The Concord Group’s new cyber liability coverage offers protection for compromised data, computer attack, cyber extortion, or misdirected payment fraud, among other scenarios. In addition to cyber liability coverage, The Concord Group’s suite of new businessowners policy enhancements also includes: Contractors Errors and Omissions: coverage for faulty workmanship or the use of defective materials for specific classifications Mechanics Errors and Omissions: specialized coverage for damages to products installed or errors made by mechanics performing work on customer vehicles for non-dealer risks Merchandise Withdrawal Expense: coverage for products that may cause bodily injury or property damage Employment Benefit Liability: increased limits on coverage for wrongful employment acts, such as discrimination, harassment, and wrongful termination

Acuity Assets Reach $5 Billion for First Time in History

Some of these coverages may not be available in all states, or may be modified to conform to applicable law.

The Concord Group Expands Northern New England Team The Concord Group Insurance Companies announces the addition of Christina Hansen, CLF, to its staff. Hansen will oversee sales and relationship development activities for The Concord Group’s Northern New England region, including supervising field marketing representatives in Maine, New Hampshire, and Vermont. Hansen brings with her more than 20 years of experience in life, property, and casualty insurance. She most recently served as Chief Development Officer of a large mutual insurer. There, she was responsible for overseeing the activities and results of field management units, as well as preparing the organization’s future leaders. “Christina has deep industry knowledge,” said Kevin Ferreri, Vice President of Marketing and Sales with The Concord Group. “I am excited to have her as part of the marketing team, as her leadership, background, and energy are providing an immediate positive impact to us all.”

Acuity Assets Reach $5 Billion for First Time in History Acuity announced that for the first time in its history, it has surpassed $5 billion in assets. The insurer has increased its assets nearly five-fold in 16 years, including adding $1 billion in under three years. “Thank you to all our employees and independent agents,” said Ben Salzmann, Acuity President and CEO. The only way we could have achieved this milestone was through a combination of everyone’s dedicated efforts.” The amount of assets Acuity manages is an important indicator of the insurer’s continued ability to meet obligations to policyholders. “Strength in assets assures policyholders and agents that Acuity is based on a solid, secure capital foundation. That gives them added trust in Acuity to place their business with us, which generates additional revenue,” said Wendy Schuler, Acuity Vice President - Finance. Acuity’s growth is also a validation of its business strategy, which has produced strong gains over the past 20 years in written premium, policy count, net income, and policyholders’ surplus. Acuity has doubled its top-line revenue in the past eight years and is ranked as the 60th largest of 2,600 property-casualty insurance companies in the nation. "We have the agents, employees, and strategic plan in place to sustain our momentum," Salzmann said. "Our continued strong growth shows we are pricing both fairly and competitively, which helps independent agents write more business and allows us to serve as a source of financial security for more customers."

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GMA December 2019  

GMA December 2019