GMA November 2021 by VIAA

GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | November 2021

In this issue: The Difference Between Selling Your Book versus Selling Your Business

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 ________________ November 2021

05 Letter from the President

14 Tips for Setting Up a Hybrid Workplace

19 On the Hill

25 How to Quote Affluent Homeowners

29 E&O Corner Claims Made Versus Claims Made and Reported Policies: What’s the Difference and Does It Matter?

33 Commentary

37 Agency & Company News

600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org VIAA Officers President Daniel J. Rodliff, CIC, CPIA, LUTCF Vice President Michael Barrett Secretary/Treasurer Jessica M. Fleury, ACSR National Director Ronald Bixby Directors Chip Ams Ian Sutherland Alan Kinney

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LETTER FROM THE PRESIDENT ______________________________ November 2021

Autumn is the time when we all settle in for a new school year and fall activities. Here at VIAA, we are busy getting ready for 2022. Our continued focus is our membership and continuing to provide tools and resources for success. It is our hope to go back to in-person classes for CE, while remaining mindful of the need to offer virtual opportunities as well. The board decided to do something new this year regarding our slate of officers. To better align with our fiscal year, rather than officers assuming their new roles at the end of our convention, they will be installed on the 1st of January. That said, our new officer roles were announced on the Friday of EVOLVE21, with the induction of Michael Barrett as the President of VIAA, Jessica Fleury as Vice President, and Ian Sutherland as Secretary/Treasurer. We also welcomed Aislyn Allen and Laurie Audy as new directors to the board.

Dan Rodliff VIAA President

We have also updated our path of leadership. As I pass the VIAA reins to Michael Barrett, I will now assume the role as President of VIAS; a position held by member Ron Bixby for many years. I want to thank Ron for all of the years of outstanding service to VIAA. It has been a pleasure to work with the VIAA Board of Directors over the last 5 years and to serve the members of the association. As always, we are here to help you with the challenges ahead. Wishing you, your families and your staffs a very Happy Thanksgiving. Dan Rodliff

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THE DIFFERENCE BETWEEN SELLING YOUR BOOK VS. SELLING YOUR BUSINESS

PERPETUATION

By Alan Grayson After many years of being an independent agent, you may be considering retiring. Your book of business has grown substantially over the years and if you sell it, you can retire. Most independent insurance agents automatically consider selling their book of business—but what about selling your insurance business as a single entity? There are pros and cons to selling your insurance business versus selling your book of business. Here are three questions to consider before you retire: Why Sell Your Book of Business? Some buyers may want to only purchase your book of business rather than your whole business. As a result, you may not have to close your independent insurance agency when you sell your book.

There are a few reasons you should sell your book of business instead of selling your insurance agency. First, it is difficult to sell a company that is losing money. If your business is not profitable, it might be best to simply sell your book of business. Another reason it is beneficial to sell your book of business is that you may be able to continue to sell insurance. Of course, this depends on the terms of your non-compete. You may be able to pursue other lines of insurance and still have all the marketing materials, employees, buildings and office supplies to run your business. Selling your book of business—or even part of your book of business—means you can continue operating your insurance agency. Selling your book of business might be a step

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The Difference Between Selling Your Book vs. Selling Your Business continued

toward liquidating your agency. After you sell it and decide to close your agency, you can sell your office supplies as well as your building if you own the property. However, selling your insurance agency through a liquidation process can be tedious. Why Sell Your Agency? Selling an insurance company as a whole also has benefits. Selling your insurance company is usually more profitable than selling your book of business and, once it is sold, you have fewer responsibilities to the insurance agency.

Which Is Better? Selling your insurance agency as a whole is usually the best option if you own a profitable insurance agency. It will lead to a greater return—and your employees will likely keep their jobs when the new owner takes over and your business is able to continue existing. While it is rewarding to sell your assets, finding interested buyers and negotiating every asset sale takes time.

Your book of business is the product of all of you and your team's hard work. What if you could sell your hard work with your book of business? As the saying goes, “The whole is greater than the sum of its parts." The whole of your insurance agency is worth more than liquidating your business assets and selling them piece by piece. Selling your insurance agency allows you to make a profit on aspects of your business you would not be able to liquidate. For instance, your marketing is a large part of your agency. Selling a website, email list, or branding and logo is difficult if it does not

have the rest of the insurance agency and book of business.

If you are looking to retire and close your independent agency, you should first consider selling your business as a whole. This will allow you to retire comfortably and remove many of your responsibilities to your insurance agency. You can sell your insurance agency yourself or you can hire a business broker to sell your company. Alan Grayson is the marketing manager and content producer at Synergy Business Brokers. Reprinted from IA Magazine.

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ON THE HILL: Big ‘I’ Advocates Against IRS Reporting Requirement

The Big “I" joined a number of organizations in sending a letter to congressional leadership opposing a proposal under consideration as part of the Democratic party's reconciliation package to establish an expansive new tax information reporting regime. If implemented, it would impact almost every American and small business with an account at a financial institution. The original proposal would have required financial institutions and other providers of financial services to track and submit information on the inflows and outflows of every account above a de minimis threshold of $600 during the year, including breakdowns for cash, to the IRS. However, this week, in the face of fierce opposition from both banks and small business organizations, such as the Big “I," congressional Democrats and the Biden administration made clear their intentions to scale back the provision so that banks would only be required to provide data on accounts with total annual deposits or withdrawals worth more than $10,000, rather than the $600 threshold that was initially proposed. 16

Even with these changes, the Big “I" remains opposed to the proposal as it would still create serious financial privacy concerns, increase tax preparation costs for individuals and small businesses, and create significant operational challenges for financial institutions. While the provision aims to help the IRS target wealthy tax dodgers, the unintended consequence of this proposal will still impact almost every American and small business with an account at a financial institution. As congressional Democrats push forward with this overly broad proposal, the Big “I" will continue to advocate on behalf of its members and object to this IRS reporting requirement unless additional changes are made to limit its scope.nergy Business Brokers.

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markets

Why You Need an Up-to-Date Careers Webpage

A company's career webpage is equivalent to a fashion boutique's storefront. A potential shopper browses its contents and decides whether to peek inside. But if your storefront does not stay current with the latest trends, people will pass it by without thinking twice. The same theory goes for your company's careers webpage. A job seeker will browse many job websites looking for the right fit, but only contact or further explore the companies that catch their eye. By taking the time to create and establish an inviting and interactive career webpage, you are taking the first step toward recruiting great employees. When creating or updating a careers webpage for your company, you must establish your target audience. This will help shape your content and the development of the site. If you are trying to bring young, creative minds to your company, you must put www.viaa.org

yourself in their shoes. How? By A/B testing email, sending surveys to past and current employees, or having internal employees help with the creation of the webpage. You want a finished product that entices qualified individuals to find out more about you or to apply to be a part of your company. How long will this process take? The time spent on a new or updated careers webpage is dependent on who you have working on the content, how many people are on the content team, and the amount of time individuals are able to spend on the site's development. The processing time will also depend on whether you outsource the work or create the data internally. There are pros and cons to hiring a third party versus keeping the work in-house. While third-party contractors can prioritize the project and can speed up the process, the downside is that they do not know the 21

Why You Need an Up-to-Date Careers Webpage continued company as well as an internal team. Having a team that can develop the webpage internally will save money, but it will also give internal employees more work—something already overloaded employees could struggle with. When deciding how and when to update or create a career page you will want to consult internally before deciding which path you want to take. Top 4 Components of a Quality Careers Webpage There are multiple aspects of a careers webpage that are imperative to include, but there are four that can make or break a user's experience: 1) Eye-catching photos. Does your company look inviting? Does your company reflect diversity? Is your company's workspace updated? These questions can be answered by looking at the photos on your company's careers webpage. Most job seekers tend to look at the photos on a website before glancing at the content. Photos show that a company is more than just a building with employees inside, it's a place filled with various kinds of people that are all working together to meet the same goals.

3) Testimonials. Testimonials are important when it comes to spotlighting company culture and internal relations. A testimonial is a look behind the scenes to see how employees truly feel about the company they work at. 4) Valuable calls to action. The job seeker has seen what they wanted to see and now they want to take it one step further. Does your webpage offer a clear way to take the next step? A valuable call to action puts prospects in an advantageous position to learn more or to talk to someone about their interest in the company. The call to action can be instructions on how to apply for a vacancy, a telephone number if they wish to speak with someone about the position or an email address to start a conversation. Every aspect of a career webpage must have a purpose. There is no room for dull photos, boring content, lack of personality or confusing calls to action. An updated careers webpage entices individuals to take the next step in their career with your company. Samantha Andersen is a content writer and publisher at Indiana Farm Bureau Insurance.

2) Quality content. After someone browses the photos, they turn their attention to the content. But if there are pages filled with small text or jargon, they may stop reading and conclude that this is not the company for them. That is not the message you want to send. Instead, focus on creating content that is short and concise. Write and read the text as if you are the individual looking for a job. Would you be enticed to learn more?

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C E O & R O N ER

Crisis Management Coverage

By Richard F. Lund, J.D., Vice President, Senior Underwriter, Swiss Re Corporate Solutions

Crisis! Scandal! Imbroglio! Disaster! What do these words have in common? They all relate to what could happen to your agency if someone or something causes your agency's reputation to be put on the line due to some outside force. Agencies from time to time will face significant incidents – from a disgruntled customer who turns to social media to damage your agency's reputation to an employee involved in a local scandal. Every day we see where an individual or company has had an event that suddenly causes a situation where they must deal with what are seemingly unbearable circumstances and they are thrust into the local, regional or even national news. As a result, the general public begins to take a different view of them and that could lead to a serious reputational problem. Examples of what could happen include workplace violence, negative portrayals on social media, negative publicity from civil litigation, or even death of an individual. If you don't have Olivia Pope (the lead character in the TV show "Scandal" portrayed by Kerry Washington) on your speed dial, what do you do? You would turn to a crisis management specialist. These specialists can help an agency limit the negative impact of events on their reputation by helping you identify the issues and stakeholders, use clear decisionmaking to deal with the crisis, develop a plan to deal with the issues, and then proceed with the plan.

In 2016, Swiss Re Corporate Solutions implemented a new coverage for agents insured by Westport Insurance Corporation to address just these issues called "Crisis Management." The coverage provides assistance, up to $20,000 reimbursement per policy period, for fees, costs, and expenses incurred by a named insured in addressing a "crisis event." What is a "crisis event"? It can include the death or debilitating illness of a sole proprietor; national or regional news exposure regarding the professional services of an agency that is reasonably likely to have a negative impact on its reputation, community relations, public confidence or goodwill; an incident of workplace violence or the filing of an involuntary bankruptcy petition against the named insured. Think of this coverage as something to help protect your people, your assets, and your brand.

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When Policy Forms Don’t Do What You Think They Do

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 was part of an email discussion among some fellow insurance coverage nerds. One of them insured a cemetery monument company whose ISO CGL policy had a non-ISO “voluntary property” damage endorsement attached. The claim involved an improperly done etching on a headstone. The problem with the endorsement was that it modified exclusion j.(4) and removed exclusion j.(5), but left exclusion j.(6) untouched and that is the exclusion that likely applies to the damage. This is very common with non-ISO CGL “broadening” endorsements that modify or remove part of an exclusion, but not all of it. Some of them, in fact, remove an entire exclusion, but not another exclusion that applies to the specific facts and circumstances of a claim.

The CGL and Damage Caused by Pesticides and Herbicides This first came to my attention when Ohio passed a law requiring firms using chemicals like this to insure the exposure. These endorsements were touted as a means to accomplish that but, reviewing the statute, it was clear that neither form adequately complied with the law. The lesson here is that many policy forms, from “broadening” endorsements to auto driver exclusion endorsements don’t do what many people think they do. Always remember to caveat emptor and RTFP!

This reminded me of two webinars I did with the late, great John Eubank, CPCU, ARM where we spent two hours examining policy forms that agents should avoid or be wary of, including those that don’t do what the agent or underwriter thinks they do. Two of those forms were the ISO CG 22 93 – Lawn Care Services – Limited Pollution Coverage and CG 22 64 – Pesticide Or Herbicide Applicator – Limited Pollution Coverage. The titles of these endorsements used to be “Lawn Care Services COVERAGE” and “Pesticide Or Herbicide Applicator COVERAGE” (EMPHASIS added]. At the request of the Big “I” Technical Affairs Committee which advocates with ISO, NCCI, ACORD, and others on behalf of agents and their customers, ISO was asked to modify these forms to clarify that there were limitations on the coverage provided. Each of these forms modified the ISO CGL pollution exclusion, but not completely and, worse, they did nothing to address exclusions J. and L. in the form which often apply to claims involving the application of pesticides and herbicides. As a result, I published this article in 2013: 30

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COMPANY & AGENCY NEWS www.viaa.org

CO-OPERATIVE INSURANCE COMPANIES ANNOUNCES RECENT STAFFING CHANGES Mark Roberts, CPCU, CIC has been appointed Vice President of Marketing & Member Services. Roberts has worked in the insurance industry for over 35 years and has been Co-op’s NH Agency Manager for the past eight years. Previously, he worked for two regional mutual insurance companies in both marketing and underwriting roles. Mark replaces Randy Roy, who retired in July. Christian Forsberg has been hired as NH Agency Manager. Forsberg is a Keene State College graduate and has held marketing positions with two regional mutual insurance companies over the past 17 years.