GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | January 2021
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 ________________ January 2021
05 Letter from the President
600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org
06 Young Agent Committee News 13 Building Engagement and Reach on Facebook
VIAA Officers
17 On the Hill
President Daniel J. Rodliff, CIC, CPIA, LUTCF
22 E&O Corner Misrepresentation
Vice President Michael Barrett
25 One (or Two) Key Property Loss Provision(s) Attorneys Keep Forgetting
Secretary/Treasurer Jessica M. Fleury, ACSR National Director Ronald Bixby
32 Commentary
Directors
37 Agency & Company News
Chip Ams Ian Sutherland Alan Kinney
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LETTER FROM THE PRESIDENT ______________________________ January 2021 Happy New Year! The new year beings the fresh start that we all wish for as we continue to deal with the effects of the COVID-19 pandemic. The new vaccines are bringing hope that at some point in 2021 the virus will begin to subside. The association continues to operate with caution, in the same way many of you are managing your agencies. Until we feel it is safe to resume in-person classes, we will hold our classes online via zoom. Don’t forget that your CE deadline is March 31. We have a great line up of courses for all levels to help you meet your license requirements.
Dan Rodliff VIAA President
I wish you a great start to the new year! We continue to be here for you, call us if you need us! Stay Well! Dan
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YAC NEWS Meet the 2021 Young Agents Committee Leadership Team! The Vermont Young Agents Committee is a networking group for insurance professionals under the age of 40 (or with less than 10 years industry experience). The group meets quarterly and focuses on continuing education, leadership development and topics of importance in the insurance industry. This year the group is specifically focused on partnering with the InVEST program which aims to attract and recruit the next generation of young professionals to the insurance industry.
Sarah Berry - Young Agents Committee Chair Current Role: Select Team Lead/CL Account Manager, Hickok & Boardman Years of Service in the Industry: 8 Reason you got into the industry: My mom! I had just graduated from LSC and was working in retail. She got me an interview with a local agency principal and the rest is history! Favorite thing about your job? Helping people regardless of if they’re a client or a colleague. My role allows me to do both while challenging me to grow personally & professionally. What you do in your spare time: I spend as much time with family & friends as I can.
Katie Andrews - VT Young Agents Committee Co-Chair Current Role: Account Manager for Employee Benefits Division at The Richards Group Years of Service in the Industry: 8 years Reason you got into the industry: Struggling as a single mother and a waitress I was provided the opportunity to start at Kinney Pike Insurance as a Personal Lines Account Manager where they trained me and trained me to be licensed. I fell in love with the customer service and continuing education and did my best to continue to learn and grow as a young professional. Favorite thing about your job? Every day is DIFFERENT!!! I learn daily from colleagues and from carriers. Interacting with clients and gaining trust through hard work and education. What you do in your spare time: I am a mother of two, a 9 year old daughter and 4 year old son. My husband and I do our best to get them outdoors as much as possible, we live near Lake Champlain so enjoy walking along the lake and fishing in the Summer and Winter.
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Kaittie Murray - Young Agents Committee Treasurer / Secretary Current Role: Personal Lines Account Manager at The Richards Group Years of Service in the Industry: 4 Reason you got into the industry: Like many others may say, I “fell” into the insurance industry. I joined the industry with the sense of knowing it involved customer relations, problem solving, and the responsibility I was striving for. Favorite thing about your job? My favorite thing about my job is that no two days will look the same. I love creating relationships with clients and helping with their insurance needs. What you do in your spare time: Some things I like to do in my spare time are reading, catching up on Netflix’s latest, and keeping up with my two crazy Australian Shepherds. Aislyn Allen - Young Agents Committee Legislative Chair Current Role: Office Manager, Kinney Insurance Years of Service in the Industry: 7 Reason you got into the industry: It was a by chance encounter with a friend of the family. I started off as a receptionist and was licensed right away! My type A personality clicked right away with the Insurance Industry, then along the way I found some pretty excellent female role models that just powered that inspiration. Favorite thing about your job? I love that every single day I learn something new about a particular coverage and how collaborative my team is. Alan and Drew are so open to ideas which makes for a great environment!
What you do in your spare time: Besides being a mother of two I teach competitive dance to high schoolers, Yoga to my local community, and have started my MBA. Stefanie Eichler - Young Agents Committee InVEST Chair Current Role: Senior Advisor: Property & Casualty, Group Benefits - NFP Years of Service in the Industry: 6.5 Years. Reason you got into the industry: I was a recycled plastics broker looking for an entire career change. I learned the basics about careers in the insurance industry from John Handy at Essex Agency several years prior. When an opportunity opened at Hickok & Boardman, I decided I needed a career change, and took a leap of faith. Favorite thing about your job? Working with clients all across the country from so many various backgrounds. It is absolutely amazing! I love getting to work with such a variety of clients and helping them solve their risk management problems while working from home in Vermont! What you do in your spare time: I enjoy getting outdoors with my husband and friends: Walking, hiking, skiing, surfing, biking (when I’m not injured). I also recently took up painting again and really enjoying that as a stress reducer!
Alexis Burrall - Young Agents Committee Communications Chair Current Role: Assistance Vice President, Marketing - Union Mutual Years of Service in the Industry: 8 Reason you got into the industry: After graduating UVM, I had been living in Boston for 2 years. I was eager to return to VT and continue my career in marketing. With no insurance background, Union Mutual took a chance on me and I feel incredibly fortunate to have landed here. Favorite thing about your job? It is exciting for me to be able to work with a wide network of agents and develop relationships. I enjoy finding new ways to help our agencies and being able to get creative! What you do in your spare time: I have a 2 ½ year old that keeps me on my toes most of the time! We enjoy spending time outside skiing and biking as much as possible! www.viaa.org
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Building Engagement and Reach on Facebook
AGENCY MARKETING
By Kevin Ament, Progressive Insurance Facebook uses an algorithm called EdgeRank to choose which status updates to display in your fans’ news feeds. As a result, 84 percent of business page fans do not see the page’s posts in their Facebook news feeds! Kevin Ament provides the reader with three easy-toimplement tips that will increase the number of the agency’s fans that see its posts. These tips are essential for agencies to employ to build their reach and engagement on Facebook. The article also provides some great tools for agencies to use to monitor the reach of their posts and to keep up with changes in Facebook’s algorithm. At Facebook’s first-ever Marketing Conference in February 2012, the company released a startling number that quickly found its way into social media consultants’ Twitter streams and new business pitch decks: 84 percent of business page fans do not see the page’s posts in their Facebook news feeds. For agencies that are exploring social media’s potential (and asking tough questions about ROI), this number is alarming. Why should resource-strapped agents put energy into creating Facebook content when so few of their hard-earned fans are seeing the final product? It’s a fair question, but before you shutter your Facebook page, you should understand what’s behind this number, and what you can do about it. With a few simple changes to your posts, you’ll be reaching more fans and building more engagement with minimal effort Why it happens Just as Google uses an algorithm to pull the www.viaa.org
most relevant web content to the top of your search results list, Facebook uses an algorithm called EdgeRank to choose which status updates to display in your fans’ news feeds. The more friends they have and business pages they “like,” the more posts are competing for limited space. EdgeRank filters out all but the most relevant, and business page posts often don’t make the cut. So which posts does EdgeRank usher through, and how do you get your posts on the shortlist? 1. Use more photos The most common problem I see on active agency Facebook pages is an over-reliance on text-only status updates. Posting more photos is an easy* way to increase engagement and post weight. Photos grab audience attention and, given their size in the news feed, block out competing posts on the 13
Building Engagement and Reach on Facebook Continued
screen. Consider these two posts that use the same text. Which would you be more likely to read, “like” and share with your friends? 2. Ask for likes and shares A 2011 study from Momentus Media analyzing nearly 50,000 status updates found that directly asking fans for a “like” increased post engagement by 216 percent! Yet only 1.3 percent of posts include this specific call to action. We’ve seen this best practice dramatically increase engagement on our consumer Facebook pages. 3. Be provocative Posting on topics that people disagree on can drive up engagement, and every like, comment and share increases affinity and post weight. Religion and polarizing political topics remain danger areas, but asking for fan opinions on texting legislation, driving age minimums or limits, car seat age and weight guidelines, or product preferences (Harley or Honda: which has the superior engineering?) can generate strong opinions on either side. Even sillier questions that tap into strongly held opinions can have the desired effect. Use these three tips together to see the greatest gains in engagement and post reach, and be sure to track how fans are responding. Your Facebook page administrators can see real-time reach data at the bottom of every post. Facebook Insights has helpful dashboards so you can track your progress and refine your strategy. If you’re not seeing traction (particularly if you’ve had an idle page for months, have a new strategy and want to give your page a jump start) you can ensure all of your fans have an opportunity to see your post in their feed by using the “promote” tool. For a small fee, Facebook will add the post to a larger percentage of your fans’ news feeds, up to 100 percent. Keeping up with EdgeRank Sites like EdgeRank Checker report regularly on any changes in the algorithm and provide 14
additional tips on how and when to post for greatest engagement (Wednesday and weekends are the current leaders. You can even use the post scheduler feature on the bottom left of the status update window to schedule updates to post when you’re out of the office.) With a little planning and a few best practices, you should see your Facebook engagement and reach rise over time. That’s the first step to achieving your goals, whether they’re acquisition, retention, public relations or a mix. Once you understand how to engage more of the fans you’ve already earned, take another step forward by learning to use the additional Facebook tools, like tagging and question, to extend your reach further, to the hundreds and thousands of prospects in your fans’ social networks. Reprinted from ACT Kevin Ament is Agency Marketing Manager at Progressive Insurance. Kevin prepared this article for ACT and he can be reached at John_K_Ament@progressive.com. More Facebook and social networking tips from Progressive and others are available on the ACT website at the Websites & Social Media link.
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ON THE HILL: Bipartisan COVID-19 Relief and Government Funding Deal Struck
bipartisan and bicameral congressional leadership finally struck a deal on a roughly $900 billion COVID-19 relief package and a $1.4 trillion omnibus government funding package. Congress is expected to vote on the package today. The COVID-19 relief package includes a number of consequential legislative victories for Big “I" members and their clients. The package includes roughly $325 billion in small business relief, including an additional $284 billion for the Paycheck Protection Program (PPP) which is reauthorized through the end of March 2021. This PPP funding includes money to allow the hardest-hit small businesses to receive a second forgivable PPP loan. In order to receive a second forgivable PPP loan, a business must have fewer than 300 employees and be able to demonstrate a revenue reduction of 25% in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. The maximum amount for these “second draw" PPP loans is $2 million. In other positive news, the PPP eligibility requirements were expanded to include certain
501(c)(6) organizations with fewer than 300 employees, such as local chambers of commerce, economic development organizations and tourism offices. The Big “I" had been advocating for this expansion along with other PPP improvements. However, it is important to note that there are restrictions on which 501(c)(6) organizations can take advantage of this expansion. To be eligible, the organization cannot receive more than 15% of receipts from lobbying, the lobbying activities cannot comprise more than 15% of activities and the cost of lobbying activities of the organization did not exceed $1 million during the most recent tax year that ended prior to February 15, 2020. The regulations implementing this provision will be particularly important to trade associations, including Big “I" state associations On a topic that the Big “I" engaged heavily, the legislation also makes clear that business expenses paid for with the proceeds of PPP loans, even when forgiven, are tax deductible, which is consistent with congressional intent in the original CARES Act. This overturns IRS Notice 2020-32 and Revenue Ruling 2020-27 and is effective as of
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Bipartisan COVID-19 Relief and Government Funding Deal Struck continued
the date of enactment of the CARES Act and applicable to PPP loans after that date. In another positive development, the PPP loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less by only requiring a simple, one page application. The legislation also includes a provision to increase the business meals deduction to 100% (it is currently 50%) for 2021 and 2022. In addition to the above issues that directly affect Big “I" members and their clients, the COVID-19 relief legislation also includes a number of other important provisions including $166 billion for direct checks to the American people, $120 billion for extra unemployment assistance and $69 billion in funding for vaccines, testing and tracing. Of note, the legislation did not include liability protections or money for state and local aid as lawmakers were unable to find a compromise on those two issues. As noted above, the COVID-19 relief legislation was combined with the omnibus government funding legislation to create a massive legislative package also dealing with a number of extraneous matters. For example, the omnibus government funding piece of the legislation included a section eliminating surprise medical billing. While a solution on surprise medical billing is long overdue and welcome, the provision also includes some concerning language that would require disclosure of direct and indirect compensation for brokers and consultants to employer-sponsored health plans and enrollees in plans in the individual health market. While certainly not perfect, in total the legislative package is a victory for many Big “I" members and their clients. Please read News & Views, our other weekly member e-newsletter, in the future for continued updates. Written by Wyatt Stewart, Big “I" assistant vice president of federal government affairs. 18
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C E O & R O N ER
Misrepresentation Swiss Reinsurance Corporation
Claims arising from misrepresentation can result from a misunderstanding by the policyholder concerning coverage, reporting requirements, perception issues, or their misinterpretation about what is written in a proposal or letter or verbally communicated to them.
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Therefore, what can an agency do to assist in the prevention of policyholder misunderstandings and allegations after the fact that do not fit the facts as the agency sees them?
DOCUMENT, DOCUMENT, DOCUMENT!!! Common claim causes are: Can you as an agent PROVE what was said, “You told me something different than what done or proposed to a customer months or even actually happened� years after the fact when a customer suffers a .Customer alleges that what they asked you financial loss and alleges it was due to an to cover was not covered when the loss agency error or omission or misrepresentation? occurred Memories grow hazy over time combined with .Customer surprise that their policy is the temptation by a customer to make auditable or has the potential for an allegations against an agent when the prospect additional premium from the audit or of financial loss threatens the future of their reporting form business or personal wellbeing. Consider the Customer alleges was not properly following: instructed on what is covered by the policy Don’t oversell your agency or services on your or endorsement website, in your proposals or in your marketing Customer alleges erroneously told by the materials. Avoid vague or all-encompassing agent what is required in the event of promises. certain occurrences such as claims, payroll reporting, audits, and other procedural issues. www.viaa.org
Misrepresentation Continued Do not lead the customer to expect a level of expertise that holds the agency to a higher standard that an agent normally would be held. Use checklists and applications to bring coverage needs to a customer’s attention. Use form letters to document all phases of the insurance process from instructions in handling to documentation of both positive and negative topics. Use written proposals and quotes to clearly document and describe the transaction. Use standardized language in proposals and quotes. If you provide highlights of coverage and exclusions include a statement to clarify your intent such as something similar to the following: This proposal contains a brief outline of coverages to be included in the policy that may be issued in the future. This is only a summary, and the terms and conditions of any policy will take precedence over the proposal. You must read your policy.
Utilize carrier provided coverage summaries and explanations of coverage or procedures rather than developing your own if such are available
Respond in writing to customer queries whenever possible to confirm what is said verbally Do not represent yourself to be capable of giving legal, engineering, human resources, tax, accounting or other professional advice Save all business related emails and correspondence in the customer file Implement a procedures manual that addresses at least all basic procedures so as to ensure consistency in the handling of work items. Update it at least annually with your staff
Conduct regular training sessions with your staff
Spend the time needed to explain complicated coverage forms or reporting procedures Document all phone conversations immediately, keeping a phone log of all business calls received INCLUDING all offsite cellular phone conversations. Use a standardized telephone memo or call sheet
Time and date stamp all incoming mail and have it reviewed by senior staff immediately
If a message is taken for another, ensure the caller does not assume the request or issue has been resolved.
Audit files on a regular schedule to confirm that proper procedures are being followed by all staff
Insist the customer read their policy if you do not review it with them
Retain fax transmission verifications with original documents AND maintain records of fax transmissions
Train staff on phone contacts, what to say and how to say it including after hours voicemail. Use language similar to: “Please be aware that coverage cannot be bound or altered via this voicemail.�
Finally, BE CONSISTENT in the use of any or all of the above procedures. If you do it for one customer do it for all of them! Provided by Swiss Reinsurance Corporation This article is intended only for educational or illustrative purposes and should not be construed to communicate legal or professional advice. You should consult legal or other professionals with respect to any specific questions you may have. The above tips cannot guarantee the prevention of errors and omissions claims against your agency, but they may minimize your risk against these types of claims and increase the defensibility of those claims that may be presented.
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VIAA Education January
2021
Virtual Courses
Vermont CE Deadline is March 31, 2021 Deadline Weapon, Active Shooter and Workplace Violence Insurance - 3 CEUS January 12, 2021 Common Commercial Property Issues - 3 CEUS January 14, 2021 Personal Umbrella Insurance - 3 CEUS January 26, 2021 Ethics in the P&C Insurance Workplace - 3 Ethics ECUS January 28, 2021
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One (or Two) Key Property Loss Provision(s) Attorneys Keep Forgetting
Coverfage
By Chris Boggs
Are you tired of talking about COVID? I am. Are you as tired of the COVID business income coverage debates? I am. Because I'm so worn out, this article focuses on ONE, ok two, key policy provisions every attorney and most judges seem either to forget or are purposely ignoring. Maybe it is because these provisions apply only when two conditions meet: The policy does not contain a virus exclusion; and The court holds that the presence of the virus ON the surface of the property qualifies as “direct property damage." A judge in Ohio recently denied one insurance carrier's request for summary judgment in two separate suits because both conditions were present. Somehow, Cuyahoga County Court of Common Pleas Judge Maureen Clancy was convinced that the presence of the virus on the property was essentially the www.viaa.org
same as smoke damage. Thus, the presence of the virus on the surfaces (if it can be proven) results in direct property damage triggering the property policy and business income coverage to respond. Although this seems to be a far-out ruling, it must now be addressed. In reality, this opinion is quite easy to defeat. Well, the intent is not really “defeating" the ruling, but rather to use the ruling to prove that little to nothing is owed by the insurance carrier, even if the presence of a virus is similar to smoke. Business Income Truism One fact about business income coverage rarely discussed during these COVID court days is that business income is not standalone coverage. Business income is triggered only when there is first a direct loss to property. At least two judges to this point have seemingly ignored the generally understood 25
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meaning of “damage" applied by most courts – a change in the physical condition necessitating repair - holding that presence of the virus causes direct damage to the property. If direct damage has occurred, business income coverage can be triggered. Policy Conditions Within insurance contracts there are policy conditions. Some are “conditions precedent" and others are “conditions subsequent." “Conditions precedent" are conditions the insured must comply with BEFORE a loss occurs to assure coverage is available WHEN a loss occurs (i.e. being truthful in the application, paying the premium, etc.). “Conditions subsequent" are conditions that must be complied with AFTER the loss to protect coverage (i.e. reporting the loss and providing a proof of loss). Violation of a condition subsequent can negatively affect coverage, up to and including voiding coverage. Two “conditions subsequent" apply specifically to the claim that the presence of a virus on the surface causes direct property damage. These read:
Also, permit us to take samples of damaged and undamaged property for inspection, testing and analysis, and permit us to make copies from your books and records. Notice that the insured MUST take reasonable steps to protect the covered property from further damage. What does this entail in the case of or in the presence of a virus? Cleaning the surface.
3. Duties In The Event Of Loss Or Damage a. You must see that the following are done in the event of loss or damage to Covered Property:
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(6) As often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records.
(4) Take all reasonable steps to protect the Covered Property from further damage, and keep a record of your expenses necessary to protect the Covered Property, for consideration in the settlement of the claim. This will not increase the Limit of Insurance. However, we will not pay for any subsequent loss or damage resulting from a cause of loss that is not a Covered Cause of Loss. Also, if feasible, set the damaged property aside and in the best possible order for examination.
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Once the surface is cleaned, there is no more damage. If there is no longer damage, the period of restoration ends. Once the period of restoration ends, there is no longer a covered business income loss. This is how the policy is designed. How long does it take to clean the property to repair the “damage"? The answer depends on the size and complexity of the building. One to three days maybe? Most business income policies have a 72-hour deductible, so if the property is cleaned within 72 hours, the virus that caused the “property
One (or Two) Key Property Loss Provision(s) Attorneys Keep Forgetting continued damage" is no longer present, thus there is no longer damage. Once the damage is repaired, business income is no longer owed. (Side note: Many scientific studies have concluded that the virus is viable on most surfaces for between one to three days; so even if it's not cleaned, there is no “damage" after three days.) Sub-paragraph a.(6) above is fascinating. The insured is required to allow the insurance carrier to take samples for testing. If no virus is detected by these tests, how is the loss proven? The insured cannot simply say that the virus is present, some proof must be provided by the insured, and the insurance carrier must be allowed to undertake its own tests to prove the insured's assertion. The ability of the insurance carrier to undertake these tests is reasonable when coverage is written on a “risk of direct physical loss basis" (“all risk" as the courts like to call it). Remember, when coverage is written on a “risk of direct physical loss" basis the insurance carrier has to prove coverage does not apply. How can the carrier prove it if they are not allowed to test? Policy Conditions Matter Insurance policies are contracts that place specific requirements on both parties to the contract – the insurer and the insured. If either party violates any of the policy conditions, remedies are available to the harmed party. The insured is required to comply with these “conditions subsequent." If the insured does not comply, the insurance carrier has the right to a remedy – up to and including the denial of coverage. If the insured has not undertaken to protect the property from further “damage" by cleaning it, they have violated a condition of the policy. But this matters only if they can prove the virus is present. Some testing must be done for proof to exist – and the insurance carrier is allowed to test.
Only while the virus is causing “damage" does the period of restoration exist. Once the virus is no longer viable or is removed, it is no longer “damaging" the property and the period of restoration ends. Once the period of restoration ends, business income payments end. What the Carrier Owes As stated previously, business income coverage is triggered only when there is direct property damage. If/when the insured proves that the virus is ON the property (and thus is causing “damage"), the insurance carrier owes the cost of cleaning the premises. If it takes longer than 72 hours (or whatever the subject business income policy's time deducible is) to clean the premises (ultimately “repairing" the “damage") the insurance carrier owes the loss of income during the time of the “repair" – only. If the insured cannot reopen because of a governmental order, that is still excluded because of other provisions in the policy (re-read condition a.(4), paying attention to the “subsequent loss" wording). But if there is no virus detectible, there is nothing to clean and no “damage." In this case, the insurance carrier owes nothing. It's a Good Try, But Nothing is Gained While the effort expended by plaintiff's attorneys is understandable and even admirable, nothing is netted for the insured using the argument that a virus compares to smoke and is causing damage. The “damage," if there is any, is temporary and “repaired" by cleaning (a policy condition) or ceases at the loss of the virus' viability (death). Further, the insurance carrier has the right to test for the presence of the virus to prove it is present. If the insured fails to comply with these two conditions, the insurance carrier is within the rights granted by the contract to apply the relief allowed.
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Weasel Words
William C. Wilson, Jr. CPCU, ARM, AIM, AMM 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. 32
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You’ve convinced a customer they need cyber insurance. You have several markets. The question is, which one is best for this customer? Let’s say you’ve narrowed it down to two carriers and their respective forms: Form X clearly appears to define potentially ambiguous terms and words and the nature of the coverages provided, but the result is limited coverage. Form Y has what appear to be very ambiguous terms and definitions that are open to interpretation for or against coverage. Beyond researching case law specific to that coverage in that state, and beyond the carrier providing clarification in writing, is there any precedence you can reliably count on to suggest to the insured the ambiguities will work in their favor resulting in broader coverage? Or can the precedence work the opposite way? Is there a resource you can use specific to the cyber exposure? According to one consultant, this is a huge issue in cyber because some firms appear to be purposely writing cyber coverages so ambiguously that it could be interpreted any way. The following is one of the discussions about “ambiguity” from my book “When Words Collide: Resolving Insurance Coverage and Claims Disputes” (pp. 102-126). One of the examples below is a cyber policy that excluded any loss that arose from a failure to follow “industry standards.”
Examples from actual claims I’ve consulted on include: A homeowners policy was endorsed to exclude “farm-like” A two-story storage building burned and the claim was denied on the basis that it was a “barn” though it was not used in any way to store farm products or equipment or house farm animals. It seems highly unlikely that a court would ever find such a vague term to be unambiguous. A homeowners policy limited coverage for personal property to property “usual to the occupancy as a dwelling” but according to an adjuster with five months experience, that did not include a washer, dryer, or freezer. The adjuster’s supervisor overrode the denial, but how many other denials went uncontested? The current ISO CGL policy, in the definition of “coverage territory,” includes “the activities of a person whose home is in the territory described in Paragraph a. above, but is away for a short time on your business….” What constitutes a “short time”? Case law is mixed. While some courts (other than the Arizona Supreme Court in the aforementioned Federal Ins. Co. v. P.A.T. Homes, Inc. case) say that variations among interpretations by courts is not evidence that a term is ambiguous, under the same factual circumstances I continue to wonder why that is.
“Weasel” Words According to Wikipedia, a “weasel word” is an informal term for word or phrase “aimed at creating an impression that a specific or meaningful statement has been made, when instead only a vague or ambiguous claim has been communicated.” For our purposes, I use the term “weasel word” to represent a special class of lexical (semantical) words or phrases that are almost inarguably ambiguous. www.viaa.org
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Weasel Words Continued A cyber policy excluded coverage for hacking if the insured’s technology systems were not up to “industry standards,” a term not defined or even hinted at in the policy. While a court [citation omitted] upheld this language under the specific facts of the case (probably because the insured had absolutely no virus protection, something that is probably a minimum requirement of any industry standard on security), it’s not hard to see how this phrase could be considered ambiguous under a different loss scenario. What constitutes a “farm-like” structure? Is there more than one reasonable interpretation of that? Almost certainly. What type of property is “usual to a dwelling”? How soon do you have to return from a trip for it to have been one for a “short time”? In a cyber policy, what would be an “industry standard” practice required as a condition of coverage? I can’t imagine any of these terms holding up to judicial scrutiny in all claims as an unambiguous term, yet “weasel words” like this sometimes occur in standardized forms and often occur in nonstandard forms.
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Why would an insurer use “weasel words”? Some would say the use is intentional so that the insurer can use vague terms to deny coverage, a form of intentional ambiguity known as “tergiversation.” I’d like to think that more often words like this are used because the author lacks skill or experience in policy drafting. Going to court is a crap-shoot for both sides, particularly for forms like these. Nobody wants to spend potentially several years having a court decide whether there’s coverage or not while, in the meantime, the insured goes bankrupt. This is illustrated by a recent cyber decision. Even when policy language appears clear, I’m not sure it really is or how it might be twisted within the context of specific facts. For coverage like this, it might be better to go with programs from reputable providers with a track record of reasonableness.
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COMPANY & AGENCY NEWS www.viaa.org
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Acuity’s Ben Salzmann Named Top InsurTech Executive Acuity President and CEO Ben Salzmann is ranked #2 on the Top 25 InsurTech Executives of 2020 by The Financial Technology Report. Salzmann was named Acuity’s President and CEO in 1999. Under his leadership, Acuity has completely transformed its home-built technology platform, first to a service-oriented architecture and then to a true headless architecture built upon an enterprise data foundation. This design, with a robust suite of internal and external facing APIs, has catapulted the company’s achievements in supporting single-entry, multicompany interface (SEMCI) with Acuity’s independent agency salesforce, helping drive a more than seven-fold increase in top-line revenue over his tenure. Prior to being named President and CEO, Salzmann had served in different capacities at Acuity since 1990, including overseeing the insurer’s Enterprise Technology division. He started his insurance career at Foremost Insurance in Grand Rapids, Michigan. Salzmann is a Phi Beta Kappa graduate in liberal arts from the University of Wisconsin, has a computer information systems degree from Aquinas College in Grand Rapids, Michigan, where he has taught computer and project management courses at both undergraduate and graduate levels, and has a master’s degree in business administration from the University of Wisconsin.
Acuity Named Top Employer for New Graduates Acuity is named a Top Entry Level Employer for 2020 by CollegeGrad.com. The insurer plans to hire 122 employees in the next year. The insurer will hire staff across all areas of its operations, including processors, underwriters, programmers, technical support staff, analysts, claims professionals, loss control representatives, field staff, maintenance staff, and others. For more information, visit www.acuity.com/careers. Acuity has earned recognition as a great place to work, including being named to Forbes’ list of Best-in-State Employers 2020 for Wisconsin. The insurer was also honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2020, and is ranked #1 in the nation among Glassdoor’s 20 Highest Rated Companies for Work-Life Balance During COVID-19. In addition to providing employees competitive salaries and professional development opportunity, Acuity offers many work-life integration benefits, generous health insurance benefits, a 401(k) company contribution that has averaged 10.5% over the past five years without a required match, and more. 38
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Jeff Pryce promoted to Vice President of Claims at Union Mutual Insurance Company
The Board of Directors for Union Mutual Insurance Company voted at their December meeting to promote Jeff Pryce to the role of Vice President of Claims. The promotion is effective January 1, 2021. Pryce has worked in the insurance industry for 23 years and he joined Union Mutual in 2014. While working at the Company he has held the titles of Claims Examiner, Director of Underwriting & Loss Control, and most recently Assistance Vice President of Claims. Pryce is based in the Company’s Montpelier, Vermont office and lives with his family in Middlesex, Vermont.
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