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GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | July 2022

IN THIS EDITION: The Risk Inside your Agency

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 ________________ July 2022

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

12 On the Hill 18 Agency Management

VIAA Officers

The Risk Inside Your Agency

President Michael R. Barrett

24 Sales Management

Vice President Jessica Fleury, ACSR

Ride Along Coaching: It's Not What You think

Secretary/Treasurer Ian Sutherland, CIC, AAI-M National Director Ronald Bixby

32 E&O Corner

Directors

35 Commentary

Daniel J. Rodliff, CIC, CPIA, LUTCF Aislyn M. Allen, CISR Laurie Audy

40 Agency & Company News

Executive Director Mary M. Farley, MBA, AAIM

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LETTER FROM THE PRESIDENT ______________________________

July 2022 The season of vacation is upon us. For myself, I am just settling back into the office after a week in the Outer Banks in North Carolina. Such a wonderful time with my family; I hope you too take some much-needed time away to refresh and relax with your family and friends! While vacation was amazing, I was quite saddened to miss the VIAA Golf Day at The Vermont Country Club in South Burlington on June 20th. Reports are in, and it sounds like the day was enjoyed by all in attendance, which was a sold-out event. To those that joined VIAA for our Golf Day, I want to thank you for coming and hope to see you all again next year. A gentle reminder, that our co-branded advertising campaign with VIAA and Trusted Choice is still gearing up for “Phase 2”, an incredible opportunity for member agencies to get their message out. Bear in mind we are taking full advantage of this amazing opportunity to market Vermont Insurance Agents with the help of Trusted Choice and our incredible company partners. Please make it known if you wish to “buy in”, as space could become limited!

Michael R. Barrett VIAA President

Our education center is keeping a full line-up of continuing education classes, so please make sure to take advantage, as March of 2023 will be here before you know it! For now, have a great 4th of July, enjoy these summer days, and make some lasting memories! Have questions? Contact Mary Farley (mary@viaa.org) or myself (mike@thebarrettagency.com)

Stay well! Michael Barrett President, VIAA

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VIAA EDUCATION Any time. Any where. Get it done. viaa.org/Education

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ON THE HILL: Data Privacy Legislation Introduced in House, Big ‘I’ Notes Concerns

The “American Data Privacy and Protection Act (ADPPA)" was introduced in the U.S. House of Representatives by the Chairman of the House Committee on Energy and Commerce, Rep. Frank Pallone (D-New Jersey) and the committee's top Republican, Rep. Cathy McMorris Rodgers (RWashington). As of press time, the legislation was being marked-up in the Subcommittee on Consumer Protection and Commerce. Before the bill was introduced, Reps. Pallone and McMorris Rodgers, as well as Sen. Roger Wicker (R-Mississippi), the top Republican on the U.S. Senate Committee on Commerce, Science, & Transportation, announced that they had reached a deal on data privacy legislation. Notably, Sen. Maria Cantwell (D-Washington), the Chairwoman of the Committee on Commerce, Science, & Transportation, opposes the ADPPA and remains committed to her own legislation, 12

S.3195, the “Consumer Online Privacy Rights Act". If enacted, the ADPPA would create a national standard on what kinds of data companies can gather from individuals and how they use it. Importantly, the number of requirements placed on most businesses would be reduced under an exemption for certain small and medium-sized businesses. In order to qualify for the exemption, for the prior three years a business must have earned gross annual revenues of $41 million or less, did not collect or process the covered data of 100,000 individuals in a year (except for processing payments and promptly deleting covered data for requested products/services), and did not derive more than half their revenue from transferring covered data. Read More Reprinted with permission from IA Magazine

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THE RISK INSIDE YOUR AGENCY

agency management

By Carey Wallace

In almost every organization their people are their most valuable asset. Inside an independent insurance agency, this is 100% the case. We operate in an industry that relies heavily on relationships, and your people are the ones that build, maintain, and grow those relationships in every facet of your agency. Whether it be with customers, partners, carriers, vendors and with members of your staff they are key to your success. In addition to the relationships they build, many people inside organizations hold key roles that are critical to the organization. This becomes even more pronounced in organizations that are small and have limited abilities to have multiple people in similar roles. The average independent agency has a staff size of 7 employees, which does not

leave a lot of opportunity for cross-over in key roles. As a result, the people that hold key roles become an area of risk for the organization. We talk a lot about succession planning for the owner of an agency, but not a lot of focus is placed on creating a plan to cover key roles within the agency should one of your employees chose to leave, become ill or retire. Here are some ways you can reduce the key role risk inside your agency. Identify the areas of Risk For each position inside your agency, list the core functions included in each position or role. Once you have the core functions defined, make a list of every person that is trained in each of the core functions across your entire organization. Ask yourself who is the backup for this function inside the

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The Risk Inside your Agency Continued agency? In many cases the service and sales focused roles such as CSR, account manager, and producer will have more than one person trained to perform the key functions of these roles. For accounting, administrative, and operational functions you may find that there are several areas where only one person has the access, knowledge, and skillset to perform certain functions. You now have identified your core areas of risks. Document the Functions For each of the core functions identified inside your agency, consider the impact that each function has on your agency and prioritize those functions that will create the most risk should you no longer have the key employee in place to perform that function. Work with your team to document detailed processes to complete each function. Ask them to include all the contact information for the resources they utilize such as technology vendors, carrier contacts, outside accountants or vendors, etc. Consolidate all these processes in one location that will serve as a reference for all of the key functions inside your agency. Train a Backup Once the processes are documented, identify the right person inside the agency that can serve as a backup to the primary person who is responsible for each function. Some functions will be easier to identify a backup than others as some functions may require access to sensitive information like payroll or financials. Once you have identified the appropriate backup for each function, implement a plan for them to be trained. You may need to create new login to provide the right level of access for the employee that will serve as a backup. The documented process should be used as a guide and be edited as they step through the training process. This will ensure that when they need to perform this function independently, they will have the information they need to be successful. Set goals to have all the key functions documented and crosstrained inside your agency by a certain date and set check-in meetings with the primary and

backup employees to monitor and celebrate the progress. Create Opportunities to Practice For each of the critical functions that you have identified, documented, and created a training plan for, it is also important to identify opportunities for the employee who is being trained to practice their skills and test the processes that they have learned. Great opportunities include vacations, setting a periodic interval where they take a turn doing the function. By being intentional about practicing these functions, you will have less down time should something happen to the primary person in your agency that is responsible for these functions. There are many benefits to cross-training key functions inside your agency besides reducing the risk for the agency. Your entire staff will benefit from having these key functions identified and backed up. There will be less delays when someone is out of the office, and you may find that it has a positive impact on your overall culture. By participating in this process, your staff will gain a greater sense of understanding of some of the different roles within the organization and may even gain a whole new appreciation for their teammates. In many cases, by going through the process of documenting these functions and training others, efficiencies and improvements are naturally identified. A second set of eyes on things that we have always done a certain way, can lead to opportunities for efficiencies. In addition, the employees that are responsible for the key functions will have a greater sense of relief when they take vacations or are away from the office knowing that they have someone there that can cover for them, when needed. Carey Wallace can be contacted at 614-6572674 or visit her online at www.agencyfocus.com

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RIDE-ALONG COACHING: IT’S NOT WHAT YOU THINK

SALES MANAGEMENT

By Colleen Francis

Ride-along coaching ought to be a powerful tool at the disposal of every leader in a salesbased organization. But many still don't use it properly. As a result, their sellers—and sales —suffer the consequences. I've been helping businesses troubleshoot their sales training strategies for over two decades and here's what I see with painful consistency in the marketplace today: The biggest impediment to success with ridealong coaching doesn't rest with the trainee— it rests solely with the coach! Why does this keep happening? Because leaders, far too often, have the wrong assumptions about why this kind of coaching

is done, when it's necessary, and how to apply what is learned from the experience. If you are a sales leader and want your sales team to succeed, you must get better at ridealong coaching. Here are six ways to get there: 1) Be clear on the why. Ride-along coaching isn't designed to save every sale with the presumption that every sale is somehow in danger, nor is it meant to turn a manager into a closing hero. It's not designed to fix sales problems as they occur either. To habitually do any of those on a ride-along is akin to being a helicopter manager. That simply has the net effect of demoralizing your staff and

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Ride-Along Coaching: It’s Not What You Think continued confusing your customer. Instead, recognize the real purpose of this exercise: it's for you to listen and observe— and for your seller to learn and apply the lessons later. 2) Plan ahead and signal. It's incredibly awkward for both your seller and buyer if you just show up unannounced during a sales meeting. Never do ride-alongs impulsively. Plan ahead with intent. Both the seller and the customer need to know when you're coming and why. That must be communicated the moment the meeting is scheduled. This also entails doing some pre-coaching with the seller. Spend some time with them to define what they hope to achieve from the upcoming sales meeting. That way, you can later assess their performance. 3) Pinch-hit only if necessary. If you're on a ride-along and witness a deal that's clearly in the process of falling apart, do your part to help get things back on track. However, recognize this is reserved only for emergency cases. And even when you need to do this, you must turn control of the sale back over to the seller in training as quickly as possible.

These days, since fewer on-site visits are happening, a third option has emerged: online ride-alongs conducted by group video calls. Using this new option means you gain an important new tool—the entire meeting with the seller can be recorded and analyzed right after the meeting wraps up. 5) Walk a fine line. We're given two ears and one mouth for a reason. If the purpose of a ride-along coaching session is for you to listen and observe, then make sure your actions match your intentions. Participate in conversations with the buyer, but without taking control of the conversation. Your job is to help the sale, not make the sale. Never usurp the seller's power or sense of agency. Your job is to collect evidence, share what you have found and troubleshoot accordingly. 6) Debrief right away. Once the ride-along is over, debrief on the same day while the memory of the experience is still fresh for both of you. That's the only way you can relate what you observed in real time and show the seller how they met or didn't meet

That's a far cry from some behavior I've seen where the ride-along coach oversteps beyond troubleshooting mode and instead behaves as though they just tied on a superhero cape, ready to swoop in and heroically save the day when the day didn't even need to be saved. 4) Adapt to how things are now. Next, recognize that ride-along coaching has changed. In pre-pandemic times, a ride-along entailed two kinds of activities. Either you sat in on a phone call in your seller's office or you got in the car with them and went to visit a client together.

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Ride-Along Coaching: It’s Not What You Think continued expectations that were set out in your precoaching session together. Similarly, in those rare instances where you need to pinch-hit, you must use the debrief to immediately share what went wrong and how you helped to fix things. Work hard at mastering your ride-along coaching skills. In doing so, you set a powerful example for your sellers about the importance of life-long learning as a sales pro. You'll be far more effective as a leader and your team will achieve a new level of sales excellence. Colleen Francis, sales expert, is founder and president of Engage Selling Solutions. Reprinted from IA Magazine.

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C E O & R O N ER

Helping Hand: How to support your remote employees and avoid claims against your agency By Kristina Miller

The COVID-19 pandemic brought a host of issues for everyone, both personally and professionally. For employers, keeping a business operational resented all kinds of challenges. Agencies have had to adapt to government orders and maintain the health and safety of employees. Some restrictions have been lifted, but the business world still hasn’t returned to the way it was before the pandemic. Agency owners recognized the importance of implementing policies and procedures for employees and customers to keep their agencies running smoothly with minimal interruption. With some employees still working from home, employees should have reliable, high-speed internet service; a laptop; an agency cell phone or telephone access through the agency computer. 1) Provide financial support. Consider paying for some or all of the costs of an employee’s telework expenses, including internet charges, agency cell phone charges and home office equipment. 2) Encourage employees to maintain a regular work routine. Employees should work consistent hours and take breaks, including lunch. Continuously working on a computer can cause eye strain and headaches, and it’s important to take a mental break and return reenergized. 3) Schedule regular group and individual meetings. It is important for managers to be open to discussing concerns with team members. Employees still have concerns about returning to the office, compulsory vaccinations and if employers will protect employees. Apprehension regarding returning 32

to work and employment issues should be handled delicately and professionally. Also, employees should never use text messaging to communicate with customers regarding coverage requests. Because of the pandemic, most discussions regarding app-ro-priate coverage or requests for coverage are being done by phone or email, which means it’s more important today for employees to document coverage requests and correspondence. Additionally, employees must use their agency email for communication with all customers, not their personal email. The employee’s signature should contain their current contact information, including any agency cell phone number. If they are unavailable, an out-of-office message should provide the contact information of a colleague in the event there is an emergency or a customer needs immediate assistance. COVID-19 has presented challenges to running an insurance agency. However, agency owners who have stepped up to meet the challenges must remain vigilant and prevent claims. Kristina Miller is an assistant vice president and claims specialist with Swiss Re Corporate Solutions. 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”) and/or its subsidiaries and/or management and/or shareholders.

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The CGL Policy and Faulty Workmanship

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. www.viaa.org

California Chief Justice Malcolm Lucas once opined, “No one knows what evil lurks in the hearts of men…but it’s all insured.” That is a typical viewpoint of most insureds…why does someone buy insurance if it doesn’t cover everything they do? We’re not talking about what I blogged about recently, “illusory coverage,” but rather about mainstream policies that cover a lot of things, but not everything. A couple of days ago, I received an email from my web site from a consumer who did not understand why a claim was denied by the CGL insurer of a contractor that did work for the consumer. The following is the email and an excerpt from my response. The inquiry: “Could I ask you an insurance question? A family owned carpet cleaning company cleaned my sofa and did damage to the sofa. I made a claim to their liability insurance company, and the company is claiming that the policy had an exception for ‘your work’. What is the purpose of liability insurance if it doesn’t cover damages as a result of the negligence of the insured? Any light you could shed on this would be appreciated. It seems unfair to both the insured as well as to me.” My response: All commercial general liability (CGL) policies include workmanship exclusions. They exclude damage to the insured’s own work to avoid the CGL policy serving as some kind of warranty of workmanship, something considered an uninsurable economic risk. Here are some examples of such exclusions from an “ISO standard” CGL policy that I’ve attached: Personal property in the care, custody or control of the insured;

That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the “property damage” arises out of those operations; or

That particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it. “Property damage” to “your work” arising out of it or any part of it and included in the “productscompleted operations hazard”. This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. The first exclusion applies to damage to any personal property in the CGL insured’s care, custody or control such as your sofa. The second and third exclusions apply to damage to real property and both real and personal property, respectively, that occurs during the insured’s operations on that property, the third exclusion being a pure “workmanship” exclusion. The fourth exclusion applies to property damage that occurs after operations are done (known as “completed operations”). In some rare cases, coverage can be bought by the insured within the CGL program, usually with a small sublimit and/or large deductible, but these markets come and go. The more common way to cover this is through a warranty or maintenance bond and/or a performance bond. You’ve probably heard some companies advertise that they are “Insured and Bonded.” What that actually means depends on the actual verbiage of the insurance and bond products they purchased. To summarize, a CGL policy is not intended to cover faulty workmanship committed by the named insured because of various exclusions that preclude coverage. Most insurers consider this to be purely an uninsurable economic business risk, though from time to time some limited coverage appears (and then usually disappears) in the marketplace.

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COMPANY & AGENCY NEWS www.viaa.org

Blodgett joins Union Mutual as New York Marketing Representative Stuart “Stu” Blodgett recently joined Union Mutual Insurance Company as a Marketing Representative responsible for the New York writing territory. Blodgett brings over 30 years of experience in the property/casualty insurance business to Union Mutual, having been a successful independent agent and territory manager for regional and national carriers. He currently holds CIC and CISR designations and is a licensed agent. A lifelong resident of the Finger Lakes region of New York, Stu and his wife Julie have three grown children, and he enjoys spending time on Cayuga Lake and rooting for the Buffalo Bills. Stu also serves as a Trustee for the Village of Newark.

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