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GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | June 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 ________________ June 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

11 Website Checklist For a Good User Experience 15 On the Hill

VIAA Officers President Daniel J. Rodliff, CIC, CPIA, LUTCF

18 E&O Corner Is Your Agency Procedures Manual ‘E&O Safe’?

Vice President Michael Barrett Secretary/Treasurer Jessica M. Fleury, ACSR

22 “Workcation” and Work Comp

National Director Ronald Bixby

29 Commentary

Directors Chip Ams Ian Sutherland Alan Kinney

35 Agency & Company News

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LETTER FROM THE PRESIDENT ______________________________ June 2021 As we celebrate Memorial Day and the start of summer, now is the time express our appreciation to all our fallen heroes and our current veterans who have protected our country. We owe them our gratitude for their sacrifices and our compassion and our support to those that continue to serve. We cannot watch the news without seeing a story regarding some cyber breach, cyberattack or ransomware/extortion effort by hackers. This continues to be an emerging and ever-changing landscape, making it difficult for businesses owners, like us, to stay prepared and protected. This not only affects our own businesses, but also those of our clients. The Big “I" Agents Council for Technology has released the Agency Cyber-Readiness Self-Assessment, which is now available online as a supplement to the Agency Cyber Guide 3.0. You can use the self-assessment tool to determine where you stand on cyber readiness, including vulnerabilities, best practices, and compliance with the evergrowing list of regulations and legislation surrounding cybersecurity. Through a brief series of questions, the assessment collects your responses and directs you to key resources in the Agency Cyber Guide 3.0 to identify areas to address.

Dan Rodliff VIAA President

Access the Cyber-Readiness Self-Assessment

We hope you take advantage of this great member benefit. Until we see each other again, enjoy the summer! Dan

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WEBSITE CHECKLIST FOR A GOOD USER EXPERIENCE

AGENCY MARKETING

By Trusted Choice An agency’s website is one of the most pivotal parts of an online presence and being able to market your company digitally. Thus, when it comes to your website, it is important to make sure that it includes a few necessities to attract consumers and retain business.

they visit your website, which makes them more likely to visit it again. Doing things as small as making your website organized, easy to navigate and using bright and pleasant colors can help enhance the UX/UI design of your website.

Generally, there are four things that all websites should have. Once these basic elements are taken care of, the choice of how to customize the website further lies with each individual business. However, the following website additions can be used as a starting point to establish a great website.

If your website is static or cluttered, there are simple steps that you can take to enhancing its UX/UI design. For those who are open to having a little outside help, consider imploring the help of a website designer. With their skills and expertise, they can help you create a custom website complete with all the necessities to provide website visitors with a great digital experience. For anyone who is looking to take a more hands on and independent approach, consider using a website building template. Services such as WordPress and Weebly provide templates that can be utilized to build an organized and

Good Experience The first thing that a website should have is a good UX/UI design for website visitors. Short for User Experience and User Interface Design, having a good UX/UI design helps to give website visitors a good experience when

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Website Checklist For a Good User Experience continued

visually appealing website with ease for beginners. Visual Content The second thing that a website should have is visual content. Utilizing visual content is extremely important, as it makes the website more dynamic and gives it better visual appeal to website visitors. If you have not done so already, add videos, graphics and pictures to your website to increase your website’s visual aesthetic. If your agency is struggling to find or create visual media and you are a Trusted Choice member, you can utilize a plethora of materials created just for you from the Trusted Choice Member Resource website for free. Concise Copy In addition to visual content, websites should also have concise and easy to understand copy. In this fast-paced era, consumers do not have the time to read everything present on a website. Make your copy concise and impactful, rather than long and vague. Search Engine Optimization (SEO) Tools Search Engine Optimization ties into helping

your website to populate when consumers search certain words on search engines. Thus, the last thing to make sure that your website includes is good SEO tools to help you market yourself. Using things such a website blog and consistent keywords help to strengthen your website’s digital content count and helps to push your website higher up on the list of results from a search engine word search. Once these elements have been added to the website, your website will have a good foundation that you can build from. From here, customization and adding proper coding is key. Customize your website for the audience that you are trying to reach and work with a professional to make sure that your website is properly coded so that your website functions properly and isn’t amiss on the back end. In addition, you can also request a digital review from Trusted Choice if you are a member to help give you a more guided list on website changes to make. Together, utilizing all these tactics will help you create an amazing website that your agency worked hard to create and should be proud of.

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ON THE HILL: Big ‘I’ Joins Coalition Opposing President Biden’s Tax Increases

In recent months, President Biden has unveiled two proposals which would raise taxes on American businesses both small and large. His American Jobs Plan would raise taxes on corporations while his American Families Plan would raise taxes on individuals and pass-through businesses. For Big “I" members, of which about one-third pay the corporate tax rate, the most significant provision in the American Jobs Plan would raise the corporate tax rate from 21% to 28%. The American Families Plan also includes a number of troublesome tax proposals that would hurt small businesses. It would increase the top marginal tax rate for individuals to 39.6% from the current 37%. Additionally, for all households making more than $1 million, the plan would tax capital gains as ordinary income at a rate of 39.6%, up from the current rate of 20%. When added to the existing 3.8% Medicare tax on investment income, the new top-level rate for individuals would be as high as 43.4%. Furthermore, Biden's plan calls for ending a tax preference known as "stepped-up basis" that allows people to pass investments to heirs tax free at the time of their death. In all, the Biden administration estimates their plan would raise about $1.5 trillion across the next decade.

Additionally, although President Biden's recent proposals have not called for a repeal of the 20% deduction for pass-through businesses, congressional Democrats could still push to include its repeal to pay for some of their spending priorities. In response to this increased threat of tax increases, the Big “I" has joined the America's Job Creators for a Strong Recovery coalition as a founding member. The coalition consists of a group of associations representing individual and family-owned businesses and corporations that oppose these job-killing tax increases as the country looks to move past the COVID-19 pandemic. The coalition intends to spread the message that these tax increases on America's job creators would stall the economic recovery rather than fuel it and counteract the economic benefits of smart infrastructure spending. As President Biden and congressional Democrats consider ways to pay for their spending priorities, the Big “I" will continue to strongly advocate against raising taxes on small businesses and Big “I" members.

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C E O & R O N ER

Is Your Agency Procedures Manual ‘E&O Safe’? By Morgan Smith

How many staff members at your agency could paraphrase guidelines from the agency procedures manual or employee handbook? It may seem tedious, but if the answer to that question isn’t “all of them,” an E&O disaster could be in your future. Agency procedures manuals and employee handbooks are two separate, yet compatible aspects of an agency’s operational foundation. Employee manuals have a staff organizational focus—what the agency expects from employees, and what the staff can expect from the agency. By contrast, an agency procedures manual strays away from the HR realm to address the business practices of the agency, including operational standards and methodology for differentiating business practices. “The No. 1 inside hassle of agencies is that everybody has their own preference on how to do something, but no one is telling them the agency way,” explains Big “I” Virtual University faculty member Virginia Bates, president of VMB Associates, Inc., a consulting firm that specializes in education, agency management and automation issues. “The E&O issues become understandable but dangerous mistakes. We have to stop that so everyone is using the same information base in an agency—it’s the only way an agency can focus on making every single call an opportunity to look at the account and suggest coverages.”

Bates, who has more than 20 years of consulting experience in the industry, says agencies that don’t pay attention to these materials face E&O exposures galore. Here’s why. IA: What is the biggest issue with agency procedures manuals and employee handbooks? Bates: Many agencies literally do not have anything and they’re very seat of the pants. Whenever they hire 18

someone, there’s nothing to give them to say this is how we do things. There are a lot of assumptions that end up being well intentioned but inconsistent that eventually tie in to E&O problems. Others have a manual, but it’s from 1982 or 1967 and it doesn’t address the business practices of today from the carriers or agency management systems. One of the predominant problems I find in my practices is what I call the “bright and shiny syndrome”—they’re happy to have a manual—they understand the value of it intellectually—but from an implementation standpoint, nobody is passionate about it. So they don’t follow through, introduce it properly, stress the importance of it or do management reporting to see if people are complying. There are the precious few agencies that not only get it, but they also know how to make it happen. They can reinforce it—new people read the manual and they understand it before they’re put to work even if they’re experienced. They’re almost quizzed by management to see if they’re using the same methodology that the rest of the agency uses. They’re the people who really follow through and they tend to get a lot more done in sales and have higher retention, because they don’t spend a lot of time on processing errors. What are some of the evolving E&O exposures agencies face when it comes to these materials? The biggest reason I think a procedures manual makes an agency far more E&O safe is that it not only clarifies but enforces consistency among all staff people so they’re handling the work the same way at every relevant desk. No matter what customer calls or who that customer talks to in the agency, the customer is going to get predictable, sensible and consistent answers without hesitation. This way, the consumer is never left between two different ways of working, lost in the “I can’t figure this out” shuffle.

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Is Your Agency Procedures Manual ‘E&O Safe’? continued An example of that is indicating what activity codes or activity names everyone’s going to use for the same thing. If a customer calls about a certificate that has been in process and they need that certificate to get a project bided, the way to find that activity by filtering or refining can be located very easily. But if one person uses the correct code and someone else uses a totally different code, then being able to find the information for that client on where the certificate is located will not only be less quick and convenient but risks the chance of not seeing everything. Good use of a computer system means that everybody is doing things the same way, using the same code and documenting to the same level so that anyone can help that customer at any time with speedy and accurate information. The No. 1 E&O claim is that a client doesn’t have the right coverage at the right time when they have a loss and finds a way to blame the agency. If our procedures are smooth enough that when we talk to the customer we know exactly what coverages they have and do not have, we can use that precious moment when we have the insured on the phone or in an email conversation to work with them on making the account as strong as it needs to be for the client’s protection.

don’t know all the things your system will do for you, you can’t possibly write a good manual. You think manual effort is necessary to do things that the computer is perfectly able to do for you. The procedures come out clunky and cumbersome—it has to be a professional, state-of-the-art set of workflows that you’re aiming for. Most agencies start their procedures without writing out what their service standards are. If we don’t even agree on what we’re trying to achieve, then we can’t possibly come up with a road map to get there. It’s the service standards that have to come first. Morgan Smith is IA assistant editor.

What constitutes a “safe” manual from an E&O perspective? The Big “I” Best Practices Study gave us an indication of the best way to get work done in the fewest steps. The problem with most manuals I see is they weren’t written by people who understand agency operations. They force too many unnecessary steps, creating more work for a staff that already has too much work. And the more steps you have, the greater the opportunity to mess something up. Very often, procedures are written by people who don’t actually do the work. The procedures are therefore too cumbersome. Now we’ve documented and put in writing the wrong way to do things, and that actually takes you a step backward. When the smarter people in the agency realize it doesn’t make sense, they find their own way to do things and create even more inconsistency. When you write a manual but you

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“Workcation” and Work Comp

Agency Management

By Chris Boggs

One day COVID will be a memory; however, some of changes in work options may continue, maybe into perpetuity. One is the option to work from home – or anyplace the worker desires. Until COVID, the majority of “office" workers were required to regularly be present in a central office location. Whether the requirement was daily, threedays-a-week or even once a week, the employees' presence in the office was required. COVID nixed this requirement for an extended period. Working from home, previously limited to just a few workers, became the normal operating procedure for millions of previously office-bound workers.

This change in venue created unexpected workers' compensation issues. The first was the need to consider the employee's state of residence within the workers' compensation coverage grant.www.viaa.org

Because work comp is state based, the policy responds only when a state is specifically listed as either a 3.A. (primary) state or granted protection as a 3.C. (secondary) state, which may or may not require a specific listing depending on the insurance carrier. Primary or 3.A. status is required when: Gaps exist between the extraterritorial provisions of the home state and the reciprocity allowances of the state to which the employee travels to work temporarily; or There are on-going (not temporary) operations in a state. Deciding which state or states require(s) listing as a 3.A. state is easy when the employees are based in a single location – such as an office building – until COVID-19 complicated the issue. Single Location Employees When employees work at a single location such as an office location, 3.A. assignment is easy. Regardless where the employees

“Workcation” and Work Comp continued live, only the state in which the operation(s) is/are located must be considered when extending status as a 3.A. primary state. Even if the employer is located near a state line and has employees travelling across the border to get to work the Coming and Going Rule allowed the employer to ignore the employee's state of residence for workers' compensation purposes. Traditionally the coming and going rule holds that injuries suffered traveling to or home from work, or even while going to and returning from lunch, are not compensable. The logic behind the rule is that the employee is not furthering the employer's interest or serving the business' need while travelling to or home from work; the employee is serving his or her own needs (the need to have a job and earn a living). Because of the coming and going rule, even when a location-specific employee lives in another state, the state of residency is not required to be listed as a 3.A. state. The employees are assigned to the operational location. COVID-19 Complications COVID-19 may have complicated or even negated the idea of the coming and going rule. Historically employers could “ignore" an employee's state of residence, but COVID-19 pushed employees out of the employer's location and required them to set up operations in their home. Now the state of residence matters. When employees work from their homes located in another state, there is a strong argument that there are now operations in the employee's state of residency. Whether the employee's home state needs to be listed as a 3.A. state is a function of permanency and the extraterritoriality and reciprocity provisions of the two states in question (the employer's operational state and the employee's state of residency).

If the employee likes working from home and the employer sees no drop in quality and quantity of work (maybe even an increase in both), working from home may become permanent. If these home-based “operations" become permanent, the employee's state of residence should or must be included as a 3.A. state on the work comp policy. A more detailed explanation of the extraterritoriality and reciprocity issues created by the now home-based workers can be found in the article, “Workers' Compensation, COVID-19 and 3.A. States." Specific examples are found in this article to help agents explain the issues to clients. A Possible New Problem – “Workcation" As employees have become accustomed to the freedom of home-based work and as employers have simultaneously accepted home-based employees, a new workers' compensation problem has arisen – “Workcation." Although the concepts of “work" and “vacation" seem mutually exclusive, the combined concept of “workcation" is now a “thing." The employee may take the “work-from-home" opportunity on the road, so to speak, travelling to a vacation destination or to stay with family or friends in another state, all without interrupting their workflow.

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“Workcation” and Work Comp continued A New York-based employee may decide to go to Florida for a couple weeks. While there, the family “plays" while the employee works remotely. The employee still works the full day, they just aren't at home. Does this “workcation" create problems with the workers' compensation coverage? Is this a different problem than the employee who lives across the state line that is now working from home? The “Workcation" State Workers' compensation, as stated earlier, is a state-based system. Agents must understand the concepts of extraterritoriality and reciprocity to prepare for the problems created by a state-based system. Every state applies its own rules to the issue of workers' compensation, particularly in regard to workers who enter the state temporarily. Fortunately, the reality of extraterritoriality and reciprocity does not seem to apply in “workcation" scenarios. However, understanding extraterritoriality and reciprocity is still important. A detailed discussion of this important topic is available from many places in the VU: In the article, “Bad Things Happen When Employees Travel to Other States;" A state-by-state breakdown of the extraterritoriality and reciprocity regulations (linked here); A 41-page Risk & Reality Report entitled “Untangling the Work Comp Mess - When Employees Travel" detailing extraterritoriality and reciprocity; and A webinar detailing extraterritoriality and reciprocity. The above referenced Risk & Reality Report is based on this webinar. Does the state to which the employee travels for a “workcation" need to be listed as a 3.A. primary state for workers' compensation coverage to apply?

Traditionally, the concepts of extraterritoriality and reciprocity involve direction and control. The question around whether workers' comp follows the employee into another state arises because the employer directed the employee to enter another state to perform operations on behalf of the employer. The worker goes at the request of the employer. In a “workcation," the employee is not directed to go to another state to work. The employer may or may not know where the employee is. Without direction and control, it seems unlikely the state from which the employee is working will or can assert that it has jurisdiction over the worker. Neither can the worker state that the employer is the proximate cause of their being in the other state (“I would not have been here were it not for my employer sending me"). In the absence of employer direction and control, the state of “workcation" does not seem to require assignment as a 3.A./primary state. If 3.C. is written broadly, even an “oops" is covered. Have Fun Employees who live and are now working in another state must be addressed by the workers' compensation policy. However, an employee who travels for a short time to another state on their volition for a short-term “workcation" does not appear to require any change to the workers' compensation policy. If the employee calls and asks, just tell them to have a good time and bring presents. Disclaimer: Because workers' compensation is subject to 51 jurisdictional interpretations, this should not be relied upon as legal advice. Each situation differs based on the facts of the case.

“Workcation?" No Problem: The No Problem, Problem 24

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Beware Online COI Systems!

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

I first addressed this issue about 15 years ago when I began writing and speaking on certificate of insurance (COI) problems that had exploded in the marketplace. However, it now seems as if we are in the middle of a second wave of COI problems, including onerous requirements that agents use specific online COI systems that benefit mainly certificate requestors and, even more so, the owners of these systems. One of the largest of these systems in 2006 was the City of Los Angeles’s Track4LA, now known as KwikComply. The original system used a proprietary, non-ACORD COI registry with too many downsides to even list here. Through the efforts of the Independent Insurance Agents and Brokers of California, this system was modified to make it at least palatable to agents. At that time, I was aware of at least a dozen other systems around the country. Since that time, most of them went out of business, merged with other systems, or revised their structure and pricing to be more marketable. This was largely out of necessity due to the combined pushback of insurance agents around the country against onerous systems and use requirements, the worst being that certificates had to be issued using a particular system AND, in many cases, the AGENT had to pay for the privilege of using a proprietary system. These systems had many problems, as outlined below. A Texas airport authority contracted with one of these online COI vendors because COI verification was FREE to the airport authority. How could the system be offered for free? The airport authority simply required proof of insurance for every entity it contracted with and that such proof MUST be provided using this online system AND the agent providing the evidence of insurance had to PAY to use the system.

system and pay $3 for that privilege. The agency was also required to enter cancellation, nonrenewal, reinstatement, and coverage changes as they occurred. In addition, any time the airport authority checked the status of coverage, the agency was billed 35 cents. That doesn’t sound like much, but the insurance status for all vendors was checked DAILY. In other words, the agency had to pay about $130 per customer to fund the system, not counting the cost to actually input data and duplicate the information in the agency’s own agency management system. Needless to say, for most concourse vendors, the cost to use this system exceeded the agency’s commission income for that customer and the agency had no control over the data once entered. Another system enabled the certificate requestor to customize the non-ACORD certificate of insurance by allowing them to ask over 200 questions about the downstream party’s insurance program. Many of these questions were ambiguous or even nonsensical. For example, one of the possible questions was “Broad form contractual (Y/N)?” without any explanation of what this question meant. Another question simply asked, “Independent contractors (Y/N)?” Other included “Primary and Noncontributory (Y/N)?” and “Auto pollution liability (Y/N)?” Clearly the authors had no idea what they were asking. The system required a scanned signature of the agent without any stipulations on how that signature might be used.

Still another system, while using an ACORD 25 format, allowed the downstream party to enter anything desired in the Description of Operations field. Only that insured’s agent would have the authority, under statutory or regulatory law or under the agency/company agreement, to modify the contents of a COI. This system permitted the For example, one agency insured three concourse certificate holder to enter a list of additional vendors in the airport. They had to input insurance insureds at any time, without regard to whether coverage information into the that entity was actually an insured. Again, only the authorized representative of the insurance www.viaa.orgcompany has the authority to do this.

As mentioned above, recently I’ve been hit by inquiries from agents around the country about what appears to be an increasing use of these “digital tracking” systems. One inquiry came from Florida where a system was being mandated by several banks. Aside from issues similar to those discussed above, this system is allegedly owned by a company that owns several insurance companies. The inquiring agent was concerned about how his customers’ policy data might be used for marketing or other purposes by these insurers. He was also concerned about his liability under numerous privacy laws in the event of a data breach.

Once again, we have an online digital certificate tracking/verification service whose business model is based on the AGENT of the downstream party funding the system. What is your current experience with these systems? Do you see their use proliferating? Have you carefully read the submission contracts you are required to enter into and understand their legal implications? If you have something to share, please include it in the Comments below.

Another Florida agent reported a similar problem with a property management company using a digital insurance verification service that did not use the ACORD format, had none of the ACORD COI disclaimers, and required personal information about the agent. Colorado agents are reportedly encountering similar issues with the increasing use of digital insurance verification demands. Most recently, Michigan agents have expressed concerns about the use of a proprietary system by a large contractor. Every time a certificate is uploaded to the contractor’s vendor, the agent is charged $15. If separate COIs are used (e.g., one for liability and one for inland marine), there is a separate $15 fee. The upstream party’s construction contract requires that very specific additional insured wording be included on the COI and failure to do so WILL result in additional upload fees. The contract requirements include the impossible, things like cancellation notice and coverage for “Liability insurance including contractor’s obligations under the indemnification provisions of this contract.” NO CGL policy covers all of a contractor’s obligations to indemnify. It is not clear how negotiations around this language, if possible, are to be conducted and whether fees apply. www.viaa.org

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COMPANY & AGENCY NEWS www.viaa.org

Hickok & Boardman Insurance Group announces the appointment of Paul Plunkett as President and Chief Operating Officer Hickok & Boardman Insurance Group is pleased to announce the appointment of Paul Plunkett as President and Chief Operating Officer. Scott Boardman will continue as Chief Executive Officer. Paul brings over 33 years of insurance experience to this position. Paul began his career at Hickok & Boardman Insurance Group in 1988, as a Commercial Property and Casualty Agent, became a Principal of the firm and was elected to the Board of Directors in 1994. He was elected Senior Vice President in 1999. In 2018-2019, Paul served as President of the Vermont Insurance Agents Association. He holds a Certified Insurance Counselor designation and is a member of the Vermont Chapter of Certified Insurance Counselors. Paul resides in Burlington with his wife and four children.

Hickok & Boardman Insurance Group announces the appointment of Jennifer Barrett as Vice President Jennifer joined Hickok & Boardman in 2009 and became a stockholder in 2014. Jennifer has twenty years of experience in the insurance industry. Fifteen years of which have been focused specifically in the field of risk management. Jennifer is a licensed Property & Casualty Insurance Agent, a licensed Workers’ Compensation Insurance Adjuster, and holds a Certified Risk Manager, Construction Risk Insurance Specialist and Registered Workers Compensation Specialist designation. Jennifer resides in South Burlington with her husband and two children.

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Job Opening Established Property Casualty Insurance Agency is seeking a highly motivated individual to join their team for a full time position in our Chittenden County location. We are seeking an experienced insurance professional to join our Personal Lines Insurance Division. This position will be instrumental in managing a book of business through expertise in retention, client servicing, technology, marketing and sales support. We are seeking an outgoing, confident, team player. KEY REQUIRED SKILLS & QUALIFICATIONS Experience in working with various insurance companies systems. Ability to perform in depth coverage analysis and policy review while providing superior customer service. Must have Integrity, a positive attitude, be highly professional, very reliable, focused, detailed oriented, have excellent communication skills-verbal, written and listening. Must have a Property & Casualty Insurance Producer License. At least 3 years of experience in the industry. We offer a competitive benefit package.Compensation commensurate with experience. Send resume to: annette@titusinsurance.net