GMA October 2017 by VIAA

GREEN MOUNTAIN AGENT A PUBLICATION OF VERMONT INSURANCE AGENTS ASSOCIATION

OCTOBER 2017

Seasons May Change, But Our Commitment to the Independent Agent Channel Remains the Same...

ermont Mutual is proud to have served Vermont and the New England market through the longstanding partnership with our Independent Agents. It remains our privilege to work with the finest Independent Agencies in the industry … the only place you can buy a Vermont Mutual policy.

89 State Street, P.O. Box 188, Montpelier, VT 05601 | 800.451.5000 | VermontMutual.com

Vermont Mutual is proud to sponsor the Vermont Insurance Agents Association’s new Education Center in Williston, Vermont.

Green Mountain Agent is a publication of

In This Issue: October 2017 4 Message from the President 7 On the Hill

600 Blair Park Road Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org VIAA Officers President Erin Odell Vice President Paul Plunkett

9 Department of Financial Regulation

Features 10 Catasrophe’s and “Do Little” Syndrome 12 Young Agents Committee News Brief 17 Natural Disasters and Often Overlooked Coverages 25 Sales Success: Seek to Understand 28 E & O Corner

Company News

Secretary/Treasurer Alan Kinney

34 Vermont Mutual

IIABA & PIA State National Director Ron Bixby

34 S&H Underwriters, Inc.

Directors Chip Ams Daniel Rodliff Michael Barrett

Staff Executive Director Mary Eversole meversole@viaa.org

GMA Publication Design LONDONmiddlebury londonmiddlebury.com

Agency News 36 The Richards Group

Help Wanted 41 The Richards Group 43 The Essex Agency

Message from the President Sign of the Times First, let me say thank you to all that attended our 111th Annual Meeting and Convention last month. It was an incredible experience for me to be installed by my father as the fourth woman to be named as president of VIAA. We’ve been surrounded by natural and manmade tragedies over the last several weeks. It has raised concerns again over the strength of NFIP and how our industry responds to mass shootings. Houston and Rockport in Texas learned first-hand what is not covered when you don’t have flood insurance even when you don’t live in a high-risk zone. Some say that shooter incidents are going to be increasingly more frequent and that we should consider offering the appropriate coverage to our clients. The insurance marketplace has responded with several new programs launched last year. I believe we have an obligation to educate our clients that their current insurance policies or terrorism coverage may not cover this type of event. There is concern in clearly understanding whether a general liability or professional liability covers this type of risk. Agents may want to consider writing a named peril policy for this type of risk in the short term. Speaking of cyber, it is National Cyber Awareness Month. We’ve includes some tips in this issue to keep you safe online along with ways to protect your client’s information at the agency level. As Ryan Spelman, from the Center for Internet Security taught us at convention— don’t skip updates and patches on your computer, tablet, IPAD or smart phones. More often than not they are security updates! I wish everyone a bountiful October. 4

Erin Odell, CIC, CISR, MBA Odell Insurance Agency VIAA Incoming President

A Specialist, Not a Generalist Niche Workers’ Compensation and Commercial Line Coverages for Main Street America Get started with an agency appointment application at amtrustappointments.com/Vermont.

A.M. BEST RATING OF “A” (EXCELLENT), FSC “XV”

On the Hill White House Proposes NFIP Reforms

raising reserve fund assessments for all properties based on the fund balance. •

Prohibiting the NFIP from insuring new construction in the highest risk flood zones and from selling new insurance policies for commercial structures. The NFIP could, however, continue to offer flood insurance to commercial properties currently in the program that maintain continuous coverage.

•

Clarifying that the NFIP can operate as it does today (i.e. a government program with industry assistance) or as an industry program with government financial assistance (i.e. risk pools or risk-sharing agreements with private companies).

•

Clarifying that private flood policies can satisfy NFIP mandatory purchase and continuous coverage requirements, eliminating non-compete requirements for the insurers that service the NFIP, and making NFIP data available to the private market.

•

Enabling the NFIP to move away from current proof of loss requirements and amending certain underwriting policies.

•

Requiring states to establish certain minimum flood risk reporting requirements for sellers and lessors before transactions close as a condition of participation in the NFIP.

•

Studying if NFIP mandatory purchase requirements increase the number of Americans covered by flood insurance.

By Jennifer Webb On Wednesday night, the Trump Administration sent a letter to Congress requesting $12.77 billion in emergency hurricane relief funds and $16 billion for the NFIP. The letter also outlined a number of substantial reforms that the Administration believes should be made to the NFIP. The NFIP estimates the program will exhaust all its financial resources and be unable to pay claims by the week of Oct. 23. This includes a $30.4 billion line of credit with the Treasury Department. As such, the Administration proposes canceling $16 billion of the program’s existing debt—the projected loss the NFIP will incur from Hurricanes Harvey, Irma and Maria. The letter notes the NFIP is “not fiscally sustainable” and needs not only immediate financial relief but a number of reforms to place it on “sound financial footing” and “enable the private market for flood insurance to expand.” The Administration’s suggested reforms include: • Establishing a means-tested, targeted affordability program for low income policyholders who face rate increases. •

Creating a new category of “extreme repetitive loss” properties and giving the NFIP the ability to discontinue coverage for such properties in some circumstances.

•

Exempting reserve fund assessments from the current caps on annual rate increases for pre-FIRM properties, and

The letter also requests $576.5 million to help respond to catastrophic wildfires that have been burning in many Western states. Congress is expected to debate these issues later this month, but it is unclear whether it will address substantial NFIP reforms. The program is currently set to expire on Dec. 8. 7

being independent doesn’t mean going it alone.

When you work for yourself, you make your own success. But that doesn’t mean you can’t get help along the way. That’s why Safeco offers programs and services that position you to win. From producer-development and agency-training programs to Bricks & Clicks™, Customers for Life™, and 24/7 Gold Service™ call center support, we’re there.

Reach out to your Territory Manager or Agency Specialist, or visit Safeco.com, to learn more. The audience for this information includes insurance agents and brokers nationwide and is therefore general in nature. Every agent and broker is responsible for knowing the guidelines and laws that govern rating, underwriting, and claims handling in their states. Coverages and features not available in all states; see the Product Guide(s) for details. ©2017 Liberty Mutual Insurance AP 300783 SMART2 2017/01

Department of Financial Regulation DFR Commissioner Pieciak to Head International Securities Organizations

president since commissioner R.C. Clark in 1930. “Vermont is a national leader in regulatory innovation and has a well-earned reputation of being an accessible, responsive and fair but tough regulator” Pieciak said, “I look forward to bringing Vermont’s regulatory approach to my role as NASAA president.” Vermont Gov. Phil Scott said, “I congratulate Mike on his appointment to head this prestigious organization; this is a very welldeserved achievement. Mike’s hard work and leadership has contributed to the success of our Department of Financial Regulation, has supported Vermont’s economy, and contributes to our efforts to protect our citizens. His experience will bring tremendous value to the North American Securities Administrators Association.”

MONTPELIER, Vt. – Michael S. Pieciak, commissioner of the Vermont Department of Financial Regulation, was named presidentelect of the North American Securities Administrators Association (NASAA) last week at the NASAA annual conference in Seattle. Pieciak will serve as president-elect for one year and begin his term as president in September 2018. NASAA is the oldest international organization dedicated to investor protection. Organized in 1919, its membership includes all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico. Pieciak will be the first Vermonter to serve as NASAA

Pieciak serves as the chief regulator of Vermont’s financial services sector, including the insurance, captive insurance, banking and securities industries. Before becoming commissioner of DFR in 2016, Pieciak was deputy commissioner of the Securities Division and previously worked at Downs Rachlin Martin in Burlington and Skadden, Arps, Slate, Meagher and Flom in New York City where he practiced in the mergers and acquisitions group. He is a member of the Securities and Exchange Commission Advisory Committee on Small and Emerging Companies, the National Association of Insurance Commissioners and serves on the Vermont State Colleges Board of Trustees. Pieciak grew up in Brattleboro and graduated magna cum laude from Union College with a degree in political science. He received his law degree summa cum laude from the University of Miami School of Law where he served as editor-in-chief of the “Miami Law Review. 9

Feature Article Catasrophes and “Do Little” Syndrome

Last week, Cliff Treese of Association Data, Inc. brought some statistics to my attention involving earthquake (EQ) insurance in California. Going back as far as 2001, the percentage of properties without EQ insurance were: Homeowners 84-88% Dwelling 95-97% Commercial 89-93% So, on average, only about 15% of home owners, 10% of business owners, and 5% of dwelling owners buy EQ insurance. Why? Lots of studies and surveys have been done. It’s too expensive. Because of percentage deductibles, it doesn’t pay much, especially for partial losses. “It’ll never happen to me.” The government will take care of me. “I thought my regular insurance covered this.” And on and on. “The problem with Americans is that we’re fixers rather than preventers.” One of my favorite quotations is from Gen. Jimmy Doolittle who said, “The problem with Americans is that we’re fixers rather than preventers.” This is so true in so many ways. Following Hurricane Harvey, it was widely reported that only about 15% of flooded

properties had flood insurance. We’ll see what happens, if anything, if Hurricane Irma makes landfall in Florida where people should know better. While we can’t prevent earthquakes and hurricanes, we can prevent, to large extent, their financial impact by buying catastrophic insurance. Private insurers sell EQ coverage and, underwritten by the NFIP, flood insurance. Yes, in many cases, it’s expensive, but what are the alternatives when the exposure is so real? As I posted last week, is it time that such coverage was mandated and included, with a federal terrorism-like backstop, in standard policies covering property damage? Such a solution would be complex and difficult, but what are the alternatives? “History teaches us that man learns nothing from history.” And, while Gen. Doolittle’s quotation is so often true, it may be even more true that, increasingly, the problem with Americans is that we’re not preventers OR fixers. In the meme I used for last week’s post, I used another quotation from the German philosopher Hegel who said, “History teaches us that man learns nothing from history.” This may be illustrated in a recent USA Today story about repetitive flood properties with this excerpt: Instead, NFIP embraced a “flood-rebuildrepeat” model that has spawned an almost $25 billion debt. The National Wildlife Foundation estimated in 1998 that 2% of properties covered by federal flood insurance had multiple damage claims accounting for 40% of total flood insurance outlays, and that more than 5,000 homes

had repeat claims exceeding their property value. A recent Pew Charitable Trust study revealed that 1% of the 5 million properties insured have produced almost a third of the damage claims and half the debt. NFIP paid to rebuild one Houston home 16 times in 18 years, spending almost a million dollars to perpetually restore a house worth less than $120,000. Harris County, Texas (which includes Houston), has almost 10,000 properties which have filed repetitive flood insurance damage claims. The Washington Post recently reported that a house “outside Baton Rouge, valued at $55,921, has flooded 40 times over the years, amassing $428,379 in claims. A $90,000 property near the Mississippi

River north of St. Louis has flooded 34 times, racking up claims of more than $608,000.” Wow. Fully 2% of properties insured for flood account for 40% of all flood insurance payments. A $120,000 home was rebuilt 16 times in 18 years at a cost of almost a million dollars. Another home has allegedly flooded 40 times and still another property 34 times racking up combined payments in excess of a million dollars. WHY? Apparently because we’re not fixers OR preventers AND we learn nothing from history.

YOUNG AGENTS VERMONT

NEWS BRIEF

Young Agent Spotlight:

Caitlin Sprague, The Richards Group

has also been involved in promoting The Richards Group at the WKNE Women’s Expo in Keene, NH and will again represent her firm at the upcoming Rotarian event, “Brattleboro On Wheels” this month. Her involvement also expands into her community as the Chairperson for the Franklin County Young Professionals, a United Way affiliated organization in Massachusetts. As a Young Agent, she attended the National Young Agents Conference in Chicago in 2016. Caitlin and her husband Michael reside in her hometown of Gill, Massachusetts. They have two cats, a dog, and recently have added four chickens to the family. With free time, Caitlin enjoys cake decorating and gardening.

Caitlin Sprague began her career with The Richards Group eleven years ago as a Personal Lines Assistant. Today, Caitlin exudes confidence in her role as a licensed Personal Lines Account Manager, describing herself as “calm, collected, professional and never being afraid to ask for help, noting her greatest strength as “exceptional customer service.” Along with her full book of business, Caitlin is involved in compiling content for the company’s Personal Lines Client newsletter. In addition, she mentors new agents and attends professional networking events throughout the year. Caitlin 12

Caitlin certainly demonstrates her appreciation when it comes to showing gratitude to The Richards Group. She states “I am thankful for The Richards Group’s encouragement and unending support throughout the years. Whether it’s continuing education, volunteer opportunities or team building activities they’ve always been happy to oblige. I think some business owners often forget to celebrate their employees and offer support. I’ve never felt left behind at The Richards Group hence why I’ve been with them for eleven years.”

YOUNG AGENTS VERMONT

NEWS BRIEF

Young Agents Attend Young Agents Leadership Institute in Chicago Aislyn Vaughn from NFP, Kelly Schavone from Jamieson Insurance, Brady Hetch from Patriot Insurance and Forrest Oberst from Liberty Mutual attending the Young Agents Leadership Institute in Chicago last month. They were treated to a Cruise on the Chicago River and Lake Michigan, attended breakout sessions on technology, a motivational seminar and opportunity to network and share ideas with other YACS from around the country. WE WOULD LIKE TO THANK VIAA COMPANY PARNTERS FOR THEIR ON-GOING SUPPORT OF THE YACS. WE EXTEND A SPECIAL THANK YOU TO THE FOLLOWING YAC SCHOLARSHIP FUND DONORS. OUR TRIP WOULD NOT HAVE BEEN POSSIBLE WITHOUT THEIR FUNDING.

LEADERSHIP PARTNER

PERPETUATION PARTNERS

YOUNG AGENTS VERMONT

NEWS BRIEF

CLICK HERE TO REGISTER TODAY!

DID YOU KNOW AGENCY E&O UMBRELLA IS NOW AVAILABLE THROUGH BIG “I” PROFESSIONAL LIABILITY A commercial umbrella underwritten by Swiss Re (rated A+ by A.M. Best) is now available exclusively to Big “I” members. Designed in collaboration with the IIABA to

PROTECT

your business with an E&O umbrella endorsed by IIABA

meet the needs of independent insurance agents Broad coverage over primary casualty lines,

including E&O Limits available up to $10 million over

CONSOLIDATE coverages with one carrier and avoid potential gaps

underlying primary E&O policy Will be available in 50 states and the

District of Columbia May to be written over a variety of E&O

carriers Contact your state association to learn more or to receive a quote today:

www.independentagent.com/EOContact

SECURE your agency’s future with the largest writer of agents professional liability in the country

SUPPORT your state association while protecting your business

Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas. Westport is licensed in all 50 states and the District of Columbia. Insurance products mentioned may not be available in all states. Please contact your state administrator or Westport for availability in your state

Designations of Distinction In Vermont & New England

Click Here to Choose a Location Near You and Register Today!

The Certified Insurance Service Representative (CISR) designation program is a nationally recognized education program directed at a very particular job description in the agencyâ€”the customer service representative. CISR COURSES MAY BE TAKEN FOR CE CREDITS FOR THOSE NOT SEEKING THE DESIGNATION.

CISR Elite status now offers an even higher distinction for those eager to gain greater skills and knowledge of insurance service and sales.

The CIC Program is for agency and company personnel -- owners, producers, agents, account managers, brokers, underwriters, and marketing or claims personnel. Participants should be licensed agents, brokers, adjusters, or solicitors; or have at least two years of full-time experience in the insurance industry or as a risk management professional; or have served for at least two years as a full-time insurance faculty member at an accredited college or university. CIC COURSES MAY BE TAKEN FOR CE CREDITS FOR THOSE NOT SEEKING THE DESIGNATION. ATTENDANCE REQUIRED FOR ALL DAYS TO RECEIVE CREDIT FOR INDIVIDUAL CLASSES.

James K. Ruble Graduate Seminars are designed specifically for CIC Designees and feature a variety of topics along with real-life applications in a seminar that is designed to satisfy the CIC annual update requirement. YOU MUST BE A CIC OR CRM AND A DUES-PAYING MEMBER OF THE SOCIETY TO ATTEND A RUBLE SEMINAR.

Feature Article Natural Disasters and Often Overlooked Coverages

Generally speaking, only 15% or less of property owners buy coverage for catastrophic natural disasters and many, if not most of them, do so only because a lender or other third party requires it. The blog post quotes German philosopher Hegel who said, “History teaches us that man learns nothing from history.” This continues to be anecdotally evidenced based on reports of claims coming from Hurricane Irma in Florida where much of the damage is attributable to windstorm. While most property policies around the country cover windstorm, there are specific exclusions for some types of insurable exposures. That is the purpose of this blog post. David Thompson, CPCU, AAI, API, CRIS with the Florida Association of Insurance Agents has been dealing with these issues for many years in Florida (Irma, Matthew, Hermine, Katrina, etc.) and following similar natural disasters around the country. By his estimation, about 20-25% of all E&O claims against agents involved off-premises utility failure, something readily insurable in most parts of the country. Yet far too many commercial customers do not have these critical coverages, so it is imperative that we make sure that business owners understand the consequences.

Several independent surveys have indicated that 40-45% of businesses that experience a serious loss never reopen and 28% of those that do, close within 3 years. As many as 75-95% of small businesses are underinsured, most of them by 40-50%. Most of these businesses do not have business income coverage or have inadequate limits. However, many of them have coverage BUT there is an exclusion that applies, the most common being one for damage, both direct and indirect, arising from off-premises power failure. ISO has at least three direct and indirect damage commercial property endorsements that can be used to address these exclusions: • CP 04 17 - Utility Services – Direct Damage • CP 15 45 - Utility Services – Time Element •

CP 04 40 - Spoilage Coverage

Similar endorsements are available in ISO’s BOP program and those of insurers. These endorsements should be brought to the attention of ALL insureds and prospects. In particular, restaurants, grocery stores, pharmacies, flower shops, and any other business with similar cooling, heating or processing needs should be offered these coverages and the offer and any denials should be documented in the customer file. For business income coverage, the standard 72hour waiting period can be reduced or removed, so that broadening of coverage should be offered given that 5- to 6-figure losses occurring within a few days of loss are common. Make sure that the option for damage resulting from overhead transmission lines is included, an option often overlooked. Also, consider endorsement of coverage for dependent properties (e.g., CP 15 08) since losses may result not from damage to the insured premises, but 17

from damage to business partners or localized leader properties. Another issue is increased cost of construction due to the application of ordinances or laws governing reconstruction… be sure to always offer O&L coverage. Do all members of your staff understand the importance of these coverages? Are you sure? We’ve seen agents with 2-3 decades of experience and professional designations like CIC who didn’t understand the need for these coverage enhancements. If you’re confident your staff understands the significance, are you certain that they are communicating this to your customers and prospects? If you would like to dig deeper on this subject

and you have access to the Big “I” Virtual University, here are two additional articles: • “Hurricanes and Commercial Insurance Q&A“

• “Selling Business Income Coverage“ If you want to dig deeper on these commercial (and personal) lines issues, scroll down to the Comments section where you’ll find links to David Thompson’s recent blog posts.

PRIVACY IS GOOD

FOR BUSINESS Personal information may be valuable to your business, but it’s also something your customers value. Nearly 75 percent of Americans feel it is “extremely” or “very” important that companies have “easy-to-understand, accessible information about what personal data is collected about them, how it is used and with whom it is shared.1 Consider taking the following actions to create a culture of respecting privacy, safeguarding data and enabling trust in your organization.

IF YOU COLLECT IT, PROTECT IT Follow reasonable security measures to protect individuals’ personal information from inappropriate and unauthorized access.

BE OPEN AND HONEST ABOUT HOW YOU COLLECT, USE AND SHARE PERSONAL INFORMATION Clearly communicate your data use practices and any features or settings you offer to consumers to manage their privacy.

DON’T COUNT ON YOUR PRIVACY POLICY AS YOUR ONLY TOOL TO EDUCATE CONSUMERS ABOUT YOUR PRIVACY PRACTICES Communicate clearly and often what privacy means to your organization and the steps you take to achieve and maintain consumer privacy and security.

CREATE A CULTURE OF PRIVACY IN YOUR ORGANIZATION Educate employees about their role in privacy, security and respecting and protecting the personal information of colleagues and customers.

IN ADDITION TO YOUR PRIVACY PRACTICES, DO YOUR DUE DILIGENCE AND MONITOR PARTNERS AND VENDORS You are also responsible for how they use and collect personal information.

Created by the National Cyber Security Alliance Made possible in whole by a grant from the Digital Trust Foundation. Source: NCSA/Zogby Consumer Poll, November 2016, made possible in part by a grant from the Digital Trust Foundation (https://staysafeonline.org/stay-safe-online/resources/ncsa-online-holiday-shopping-survey-results)

S TO P T H I N KC O N N E C T. O R G @STOPTHNKCONNECT

STOPTHINKCONNECT

BASIC

TIPS AND

ADVICE KEEP A CLEAN MACHINE • • • •

KEEP SECURITY SOFTWARE CURRENT: Having the latest security software, web browser and operating system is the best defense against viruses, malware and other online threats. AUTOMATE SOFTWARE UPDATES: Many software programs will automatically connect and update to defend against known risks. Turn on automatic updates if that’s an available option. PROTECT ALL DEVICES THAT CONNECT TO THE INTERNET: Along with computers, smartphones, gaming systems and other web-enabled devices also need protection from viruses and malware. PLUG & SCAN: USBs and other external devices can be infected by viruses and malware. Use your security software to scan them.

PROTECT YOUR PERSONAL INFORMATION • • • •

LOCK DOWN YOUR LOGIN: Fortify your online accounts by enabling the strongest authentication tools available, such as biometrics, security keys or a unique one-time code through an app on your mobile device. Your usernames and passwords are not enough to protect key accounts like email, banking and social media. MAKE YOUR PASSWORD A SENTENCE: A strong password is a sentence that is at least 12 characters long. Focus on positive sentences or phrases that you like to think about and are easy to remember (for example, “I love country music.”). On many sites, you can even use spaces! UNIQUE ACCOUNT, UNIQUE PASSWORD: Separate passwords for every account helps to thwart cybercriminals. WRITE IT DOWN AND KEEP IT SAFE: Having separate passwords for every account helps to thwart cybercriminals. At a minimum, separate your work and personal accounts and make sure that your critical accounts have the strongest passwords.

CONNECT WITH CARE • • •

WHEN IN DOUBT THROW IT OUT: Links in emails, social media posts and online advertising are often how cybercriminals try to steal your personal information. Even if you know the source, if something looks suspicious, delete it. GET SAVVY ABOUT WI-FI HOTSPOTS: Limit the type of business you conduct and adjust the security settings on your device to limit who can access your machine. PROTECT YOUR $$: When banking and shopping, check to be sure the site is security enabled. Look for web addresses with “https://” or “shttp://,” which means the site takes extra measures to help secure your information. “Http://” is not secure.

S TO P T H I N KC O N N E C T. O R G @STOPTHNKCONNECT

STOPTHINKCONNECT

TIPS AND ADVICE BE WEB WISE • • •

STAY CURRENT: Keep pace with new ways to stay safe online: Check trusted websites for the latest information, and share with friends, family, and colleagues and encourage them to be web wise. THINK BEFORE YOU ACT: Be wary of communications that implore you to act immediately, offer something that sounds too good to be true or ask for personal information. BACK IT UP: Protect your valuable work, music, photos and other digital information by making an electronic copy and storing it safely.

BE A GOOD ONLINE CITIZEN • • •

SAFER FOR ME, MORE SECURE FOR ALL: What you do online has the potential to affect everyone – at home, at work and around the world. Practicing good online habits benefits the global digital community. POST ONLINE ABOUT OTHERS AS YOU HAVE THEM POST ABOUT YOU: The Golden Rule applies online as well. HELP THE AUTHORITIES FIGHT CYBERCRIME: Report stolen finances or identities and other cybercrime to the Internet Crime Complaint Center (www.ic3.gov) and to your local law enforcement or state attorney general as appropriate.

OWN YOUR ONLINE PRESENCE • • •

PERSONAL INFORMATION IS LIKE MONEY. VALUE IT. PROTECT IT: Information about you, such as your purchase history or location, has value – just like money. Be thoughtful about who gets that information and how it’s collected through apps and websites. BE AWARE OF WHAT’S BEING SHARED: Set the privacy and security settings on web services and devices to your comfort level for information sharing. It’s OK to limit how and with whom you share information. SHARE WITH CARE: Think before posting about yourself and others online. Consider what a post reveals, who might see it and how it could be perceived now and in the future.

S TO P T H I N KC O N N E C T. O R G @STOPTHNKCONNECT

STOPTHINKCONNECT

THE MEETING SPACE YOUâ€™VE BEEN LOOKING FOR

Everything you insure is on your shoulders

Who do you trust to have your back? VIAS offers the most prestigious Errors & Omissions carrier(s) in the country: Westport Insurance Company & Utica National Insurance Group

For a quote or for more information contact Helen Collins at hcollins@viaa.org or 1-844-609-1481

www.iiaba.net/eohappens

VIAS is a subsidiary of Vermont Insurance Agents Association viaa.org

Sales Success: Seek to Understand By Phil Schuman

Whether at a networking event, during an appointment, or just in every day life, it is often our natural tendency to talk early and too much! It could be because we’re either nervous, trying to impress others or just because we find ourselves absolutely fascinating and enjoy hearing our own voice! Whatever the reason, it’s a great idea to take time to explore the many reasons why it’s important to speak last and listen first. The golden key in selling is to understand your customer’s needs and then tailor your benefits to match those needs. Right there is where many salespeople fall down where with one easy mindshift they could instantly be achieving far greater results. Many salespeople launch right into their presentation explaining the great value that their product offers. But without first understanding what the customer needs your list of benefits may or may not resonate with the prospect. By first asking questions (discovery phase), listening to the answers, understanding the prospect’s motivation and then tailoring your benefits to their specific and unique needs, you stand a far greater chance of connecting, impressing and encouraging the prospect to do business with you. By being listened to they also feel valued, which is a great way to cultivate trust in the relationship you are building. A fun litmus test to

gauge you’re on the right track in terms of listening more than you’re speaking is if you’re at a coffee meeting you should always finish your coffee first! The same principle applies to networking events. Notice conversations the next time you’re at a function and being introduced to someone. The skilled networker will ask far more questions about you and what you do, perhaps even questions about how they might be able to help introduce you to someone they know or refer you to a friend who may have a need for your service. The less seasoned networker will immediately hand their business card to you, say what they do and how they know they can help you! How can they possibly be so sure they can help when they have no idea who you are, what makes you tick or what you need! And in reality the selling part is best done after the event – the function itself is just to make the introduction and to lay the foundation for continued conversations ahead. Dale Carnegie in “How To Win Friends And Influence People” tells a story where he had dinner with someone who after described how fascinating they had found Mr. Carnegie. The reality is Dale Carnegie had spoken very little but had just asked the person questions related to their interests. For the purposes of self-preservation we are all hard-wired to be interested in ourselves and 25

our well-being and enjoy talking about matters related to us. So at networking events, during appointments and in every day life, consciously make an effort to let the other person enjoy talking about matters related to them and you’ll do yourself countless favors in the sales process. Of course there will be a time during the discussions where it’s important to be talking and offering information but most of that should always come after you’ve first found out what you need to know about the other person. As Richard Branson wisely says: “Seek to understand, before you seek to be understood.“ It’s a great line to keep in mind the next time you walk through the door into a networking function or step into your next dynamic sales appointment.

Happy Selling! The Schuman Group empowers and inspires sales teams with proven strategies and real world tools through sales training, coaching and consulting services. www.schuman-group.com

Every Agency or Brokerage Should Think About Natural Disasters Events Before They Occur By James C. Keidel, Esq. Keidel, Weldon & Cunningham, LLP Harvey, Irma, Jose and Maria. This year’s Atlantic hurricane season has been extremely active, and there are still two more months to go. We all remember Irene’s destruction in an inland state. Over the years, we see insurance agents and brokers react to these types of storms and change certain aspects of how they conduct their business to better protect their customers and prevent a potential errors and omissions claim or lawsuit. In this issue of The E&O Report, we will discuss a few tasks every Vermont insurance agency or brokerage should complete in preparation for another natural disaster. No matter where your agency or brokerage is located in Vermont, it is important you think about the following issues. According to estimates, less than a quarter of the properties damaged by flooding in Texas and Florida as a result of hurricanes Harvey and Irma were covered by flood insurance. After Irene and Sandy, many of the storm-related E&O claims and lawsuits we saw were brought by customers who suffered a flood loss but did 28

not have flood insurance in effect at the time of the storm. As a result of such claims, many Vermont insurance agencies and brokerages adopted a procedure where they offer every customer the option of purchasing flood insurance, regardless of where the insured is located. Since most customers will usually opt not to purchase flood coverage, unless they are located near a body of water, it is a good practice for the agency or brokerage to document the customer’s rejection of that coverage. One of the best ways to document the acceptance or, more likely, the rejection of coverage is to use the ACORD 60 Flood Acceptance/Rejection form. The ACORD 60 form should be completed by the customer indicating that the coverage is either accepted or rejected. Then, it should be signed and dated by the customer. Once this form is signed, it should be retained in the customer file. An added benefit of using the ACORD 60 Flood form is that it specifically states that once it is signed it applies to all future policy renewals. By adopting an agency-wide practice where the option of purchasing flood coverage is offered to each customer and the ACORD 60 is completed by every customer, agencies and brokerages will help protect themselves from potential E&O claims or lawsuits if a customer sustains a loss due to an uncovered flood claim. Another lesson many insurance agencies and brokerages learned from the storms of the past few years is that it was only as a result of the storm that customers often discovered they lacked: •

sufficient coverage;

•

adequate limits of coverage; or

•

a full understanding of how their coverages or deductibles applied.

As a result, many insurance agencies and brokerages now use major storms as learning

Looking to Take Your Personal

Lines Experience to the Next Level?

We Want You! South Burlington, VT NFP, a leading insurance broker and consultant that provides employee benefits, tools for their customers to think about property When & casualty (P&C), retirement, coverage. discussing coverage, for and individual insurance andis wealth instance, a good practice to walkmanagement the customer solutions is currently seeking an experienced through their limits of coverage and applicable Personal Lines Producer to advance his such or deductibles in the event a disaster occurs, her career as a Commercial Lines Producer as a hurricane, ice storm, blizzard or fire. Agents in its Souththat Burlington office. Thistell position and brokers follow this practice us that it is a goodfor waygenerating to help customers identify is responsible new sales for changes in coverage so they are adequately all Commercial Lines policies and requires insured. the ability to work closely with clients, customer service representatives, producers, management, and insurance carriers. The An additional lesson storms, such as Irene, teach work environment is professional and very us is that every insurance agency or brokerage, no matter how large or small, should have have a supportive. The ideal candidate should disaster plan in effect. It should be known by excellent interpersonal skills, {2+} years of and understood all employees include experience, andbyability to adaptand to emerging the responsibilities each technology. They of will be employee supportedshould with a natural disaster occurs. Additionally, any commercial lines training and mentoring for disaster plan should include howproposals the agencyand or prospect/planning, sales calls, brokerage accesses its data remotely in the event education. A property and casualty license is its offices are not accessible or fully functioning. required. NFP offers a highly competitive The agency or brokerage should also have the compensation and benefits package. ability to forward phone calls and access email

so communications with customers continue despite the disaster. An agency or brokerage Please send yourinresume that plans ahead this wayto: will be able to Dan Rodliff continue to operate and assist customers in that crucial period immediately following a natural Vice President, NFP P&C disaster.

PO Box 2243 South Burlington, VT 05407

The prudent insurance agency or brokerage Or is the one that thinks well in advance of a Email: disaster dan.rodliff @nfp.com natural and has its customers do likewise, so both are prepared when a disaster occurs. By doing so, the agency or brokerage will not only help protect itself from a potential E&O claim or lawsuit, but it will also provide better customer service and in the process often sell more insurance. ______________________________________ Keidel, Weldon & Cunningham, LLP concentrates its practice in the defense of insurance agents and broker’s errors and omissions claims and litigation, errors and omissions loss control counsel and education, insurance coverage analysis and litigation and insurance regulatory matters. Please direct any comments or questions to James C. Keidel, Esq. by mail to the main office of Keidel, Weldon & Cunningham, LLP, at 925 Westchester Avenue, Suite 400, White Plains, NY 10604, telephone at (914) 948-7000 or e-mail at jkeidel@kwcllp.com. The law firm also maintains offices in Syracuse, New York; New York City, New York; Wilton, Connecticut; Fair Lawn, New Jersey; Warwick, Rhode Island, Philadelphia, Pennsylvania, Williston, Vermont and Naples, Florida.

Free Legal Consultation for VIAA Members – Up to 30 minutes KEIDEL, WELDON & CUNNINGHAM, LLP Attorneys at Law

Mergers & Acquisitions

Professional Liability Defense

Litigation

Loss Control

Pre-Litigation Services

Producer Agreements

Agency Contracts

Contract Disputes

Contact: James Keidel, Managing Partner jkeidel@kwcllp.com|914.948.7000 Bar Admissions: Vermont, New York, Connecticut, New Jersey, North Carolina

Experienced| Economical | Effective 29

Feature Article Clients Don’t Want to Become Insurance Specialists “I could do my own payroll, but I choose not to. My time is better spent focusing on my insurance business,” says Erin Odell, principal at Odell Insurance Agency in Bradford, Vt., a multiline agency serving personal lines, farms, mini-farms and small businesses in the Upper Valley of Vermont and New Hampshire and its surrounding communities. “There will always be a need for insurance agents to explain coverages and to evaluate the exposures that a client faces. Consumers don’t know all the ins and outs of insurance coverage, and in my experience, they don’t really care to,” Erin says. “Our clients trust that their agent is knowledgeable, experienced and technology savvy in order to make the right recommendations for their insurance protection. They might do a little research on a topic before talking to us, but mostly our clients see us as part of their household or business team, as their go-to insurance professional. Especially the executives—they focus on their business and leave the insurance protection to us!” But don’t think this trusted advisor emphasis means Erin and the Odell team ignore the value of technology. The Odell Agency, which does about 60% of its business in commercial lines, which includes farm insurance, attempts to make some of the basic policy functions easy for both personal and business clients, but mostly it uses its website to drive business to its personnel, because its agents are

where the real quality resides. For example, Odell’s website, which is succinct and easy to navigate, offers clients five great options using tiles, or click-on boxes, on its personal insurance landing page: Request a Quote, Make a Payment, Report a Claim, Track Your Home Inventory, and Frequently Asked Questions. There is also a live-agent “click for support” tile that goes to an email form after business hours. But don’t be fooled. The ‘Request a Quote’ option doesn’t bounce visitors to an automated rating/quote engine. Rather, it provides five different methods for contacting a real person for real advice. For payments, it is a little more automated, with links to carriers that accept online bill pay, which is what today’s consumer expects. If a new prospect or a seasoned current client wants to do a little research, the FAQ page is set up with easy-to-understand answers laid out logically by line of business: home, auto, flood, general questions, etc. And on every page, the agency’s phone number, address, fax, office hours and social media are in the same, easily seen place. “We want to generate the conversation,” Erin says. “While some companies and agencies want to replace the human experience with artificial intelligence, we don’t. We empower our clients with some online self-service tools— such as certs, ID cards and some other policy functions—by making sure carrier website information is available 24/7 through links on our site. But for quoting and purchasing, consumers really need a professional, even—I think—on such ‘simple’ policies as auto insurance. Do buyers really know what level of liability coverage they need? Do they know about the value of medical payments coverage? When it comes to commercial, it’s even more

Helen Collins hcollins@viaa.org

complex, and when we are talking about farm insurance, then you have government forms for some programs, and the agent’s presence on the farm is essential for proper coverage. It’s labor-intensive and very personal. They want to see us and know us. It’s all about trust.” Generating the conversation goes beyond current business at Odell. The agency is looking to the long-term future by engaging teens and young adults. In fact, it has a special page and outreach campaign specifically for the future generation of insureds. The agency reaches out to teens who have just gotten their driver’s license with periodic mailings to explain insurance and by speaking at local high school driver education classes. “The Odell Insurance Agency brand is in their minds early and often,” says Erin, “and our agency is there for them through the many stages of their lives.” “Agency clientele must be replenished over time, so we make the youth a priority,” Erin says. “For instance, we send new drivers and their parents a welcome packet with explanations about insurance and other valuable information such as vehicle safety ratings and distracted driving prevention. We make the connection and ‘touch’ them at important points throughout their young adulthood to help them with their knowledge and responsibility and to keep our brand in their mind. When they finally go to buy renters or auto insurance or whatever their first policy is, Odell is hopefully the first call they make or the first website they visit. “We communicate via Facebook, Messenger, and texting with our clients. We adapt to their way of interacting and new social norms. Our staff is accustomed to this way of communicating in their

own lives, so making that transition to their professional lives was easy.” That doesn’t mean the agents conduct official, legally binding business via these platforms, but they are able to communicate more easily and conveniently for the client by being conversant in all these media channels. Each is used for its own purposes. For example, over the July 1 weekend, there were severe storms in the Northeast that caused flooding and other damage. Here’s what Odell did on its Facebook page: To all of our Odell Insurance policyholders, if you have questions about damage to your property from the storms this weekend, the office phones will be answered Sunday from 9am-11am and Monday 8am-10am. We welcome your calls and questions during that time. You can always call and follow after-hours emergency instructions for a claims emergency!! And elsewhere on that Facebook page, Odell provides testimonials, safety tips, information about holiday hours, local humaninterest news, and advocacy. Its LinkedIn page provides links to its staff, which helps it with its overall professional persona. The agency also offers life insurance to all clients, an area where online and direct writers have made substantial efforts to garner business via radio call-in numbers, TV ads, search engine placements, and social media tracking advertisements. Though that isn’t typically a primary line of business at a small P&C agency, Odell does quite a bit of crossselling to accommodate this need for clients in personal, farm and business. And though it doesn’t command its own page on Odell’s website, life insurance is mentioned along with disability and umbrella on all its other pages. The key for Odell is being relevant

across all sectors of clients’ lives—in products, service, advice and communications. “I am a firm believer that, as long as the consumer mindset that insurance is protection and transfer of risk prevails, the downtown, small, independent insurance agency will continue to play a vital role in the economy of today and that of the future digital society,” Erin says. “Advances in technology create new opportunities, foster multifaceted levels of collaboration, strengthen the agent-client relationship, and improve the agency’s financial bottom line through efficiency and automation. Technology is our friend, not our competition.

“The strategic approach of the small independent agency must adapt to meet the ever-changing and complex multigenerational consumer needs, including modernizing channels of communication, enhancing product offerings and elevating customer service capabilities, but the small independent insurance agency’s identity will stand the test of time; protect your people and remain an integral part of every American household’s daily life.

Real WC Solutions to Meet Your Challenges

Real WC Solutions

to Meet Your Challenges • Fully Insured Markets; Broad Range Classes, Deviations and Dividends; Highly Rated Company Partners; Superior Service • Claims Management Services/TPA Services • Risk Control Services • Self-Insured Group Management • Alternative Market Solutions • Other Products – High Net Worth Personal Lines Program

Alison Jones (978) 933-4187 | www.meadowbrook.com

Company News Christine Yeaton Joins Vermont Mutual as a Senior Marketing Representative Media Contact: Thomas Thamm (802) 229-8975 tthamm@vermontmutual.com MONTPELIER, Vermont (September 19, 2017)—Christine Yeaton, CPCU, AU, has joined Vermont Mutual as a Senior Marketing Representative. Ms. Yeaton brings over twenty years of marketing and underwriting experience, having worked throughout Massachusetts for both a regional and national carrier. “We are very fortunate to have attracted such a talented and highly regarded professional” stated Vermont Mutual’s Vice President of Marketing, Shaun Farley. “We now have four Marketing Representatives in the state of Massachusetts. With over $250,000,000 of written premium in Massachusetts alone, along with double-digit new business growth, it is paramount that we maintain an outstanding marketing team to serve the needs of our Agency Partners. It’s been wonderful to see how enthusiastically our Agency Partners have embraced Chris’s arrival.” Executive Vice President and COO, Mark McDonnell, added “As an organization that takes great pride in the strong relationships we have developed with our Independent Agency Partners, we are thrilled that Chris, with her collaborative approach with Independent Agents, has accepted this critical role at Vermont Mutual.” Ms. Yeaton will be based in Shrewsbury, Massachusetts and will serve the Eastern Massachusetts area. _______________________________________

Vermont Mutual Insurance Group® is a trade name of Vermont Mutual Insurance Company, Northern Security Insurance Company, Inc. and Granite Mutual Insurance Company. Chartered in 1828, Vermont Mutual is one of the ten oldest mutual property/casualty insurers in the United States and provides coverage throughout New England and upstate New York. Through more than 400 independent agencies, the Group insures 300,000 policyholders with a direct written premium of more than $435,000,000. The group is rated “A+ Superior” by A. M. Best and a Ward’s Top 50 performing property/casualty for the past nine consecutive years.

S&H Underwriters, Inc. Promotes Haylee Glennon, CIIP to Personal Lines Underwriting Manager S&H Underwriters, Inc. is a family owned Managing General Agency and Wholesale broker is pleased to announce that Haylee Glennon CIIP has been promoted to Personal Lines Underwriting Manager. Haylee started her career with S&H Underwriters in August 2002. She has worked in Policy Services Department, Commercial Lines Department and has been in the Personal Lines Department working as an Underwriter since 2010. Haylee has recently earned her Certified Insurance Industry Professional Designation and is working toward getting her Associate in Personal Lines Designation and Associate in General Insurance Designation. Haylee has been a member of the Vermont Association of Insurance Professionals and the International Association of Insurance Professionals since 2003. During her membership she has served on various VTAIP board positions – including recently being the President. She has also served on Regional Committees – including being the 2014 Region 1 Conference Committee Co-Chair. Haylee lives in Williamstown with her Husband and two boys.

Calendar: viaa.org/Education/Pages Webinars: iiavt.aben.tv/

Agency News The Society of CIC Honors Thirty-Year Member, Monique Johnson The Society of Certified Insurance Counselors (CIC) recently recognized Monique Johnson, CIC of The Richards Group, Wilmington, Vermont with a certificate honoring her 30 years of faithful participation in advanced education. Monique earned the designation through a series of rigorous examinations and has maintained her CIC designation by annual attendance at an approved CIC continuing education program. “The professional dedication and commitment represented by Monique sets the standard within our industry,” said Dr. William T. Hold, CIC, CPCU, CLU, President of the Society of CIC.

“This thirty-year accomplishment signifies a career of active leadership in advanced education. Monique’s emphasis on professional development positively reflects on the insurance profession as a whole.” The Society of CIC is a member of The National Alliance for Insurance Education & Research. This not-for-profit organization serves over 133,000 participants annually throughout all 50 states, the U.S. Virgin Island, and Puerto Rico. The National Allianceis comprised of the Society of Certified Insurance Counselors (CIC), Certified Risk Managers (CRM), Certified Personal Risk Managers (CPRM), the Society of Certified Insurance Service Representatives (CISR), Certified School Risk Managers (CSRM), and The National Alliance Research Academy. Together, these programs offer a wide variety of education, publications, and professional designation opportunities in the insurance and risk management industries.

INNOVATIVE SERVICES TO GROW YOUR BUSINESS

Imperial PFS® is committed to providing VIAA members exclusive rates, terms, and industry leading technology. Errors and Omissions Special Financing Compete in today’s market with special rates and terms provided by Imperial PFS®.

Credit Card and ACH Down Payments Save time and let Imperial PFS® collect your premium finance down payments electronically

eSignature Capabilities Process loan agreements faster and easier with electronic signatures.

STEVE ABRAMOVITZ | 617.990.2364 | steve.abramovitz@ipfs.com

Visit us today at ipfs.com or follow us on social media for news and updates on Imperial PFS®

Imperial PFS® is a trade name affiliated with IPFS Corporation® (IPFS™), a premium finance company. Access to products and services described herein may be subject to change and are subject to IPFS’s standard terms and conditions in all respects. Copyright © 2016 IPFS Corporation. All rights reserved.

HELP WANTED

Recognized in 2016 and 2017 as one of the Best Places to Work in Vermont, The Richards Group is an independent, full-service insurance and financial services agency who has been serving the communities of the tri-state region since 1867. We are always looking for highly motivated individuals who have excellent customer service and relationship building skills. The Richards Group offers a competitive salary commensurate with experience as well as a comprehensive benefits package. We are actively recruiting for the following positions: • Commercial Lines Department Manager, Brattleboro • Commercial Lines Sales Assistant, Brattleboro • Commercial Lines Sales Producer, Rutland

• Commercial Lines Account Manager, Middlebury

• Personal Lines Account Manager, Ludlow

• Employee Benefits Account Manager, Rutland For job description and requirement please visit https://therichardsgrp.com/about/careers/ Submit Cover Letter and Resume to jobs@therichardsgrp.com

COULD YOUR CUSTOMERS USE A

PERSONAL UMBRELLA POLICY?

ACCIDENTS HAPPEN? That’s why people have insurance. However, if your customers aren’t protected by a personal umbrella policy, they could be putting their house or financial assets at risk. This low-cost policy is designed to protect families against a catastrophic lawsuit or judgment.

CONSIDER THIS: Existing homeowners and auto insurance may not be enough to cover a lawsuit or judgment. A personal umbrella policy will substantially increase your customer’s overall liability coverage beyond the basic coverage provided under homeowners and auto insurance policies. A SMART WAY TO PROTECT YOU AND YOUR FAMILY. You’ll find an RLI personal umbrella policy is a good idea. • $1 million in additional insurance • Backed by a financially secure, A+ rated company • Customers keep their current homeowner/auto insurer • Excess UM/UIM available • New drivers accepted — no age limit on drivers • Up to one DWI/DUI per household allowed • Auto limits as low as 100/300/50 in certain cases

Rated A+ by A.M.Best

CALL TODAY

FOR AN IMMEDIATE QUOTE!

The RLI PERSONAL UMBRELLA POLICY is available through selected agents and program administrators in all 50 states.

CONTACT:

April Shrewsbury 800.221.7917 x5360 April.Shrewsbury@iiaba.net

RLICORP.COM

HELP WANTED

Experienced Commercial Lines Customer Service Representative POSITION SUMMARY: Manage small, medium, and large commercial insurance accounts in mid-sized independent insurance agency. Position consists of primary day-today point of contact with customers and liaison between the client, carrier and sales producer. BRIEF JOB DESCRIPTION: • Professional and prompt customer service including phone, email, and walk-in inquiries on new and existing client accounts. • Coordinate policy changes, receive and process new claims, and assist as needed on existing claims. • Audit review and processing including audit dispute resolutions. • Handling and processing of surety bond requests including bid, payment, and performance bonds. • Keep precise records of customer interactions and transactions, recording details of inquiries, concerns, and comments, as well as actions taken in the agency management system (AMS 360). • Receive direction from carriers and sales producers to assist in project and/ or proposal delivery, policy changes, requests for additional information. • Market all lines of coverage for new and renewal commercial risks including

additional lines of coverage. This includes the creation of submissions, preparation of proposals, binding of coverage with carriers, billing and review of policies. • Accompany producers to client meetings both in the agency office and at the client’s offsite location. • Perform other duties as needed. MINIMUM QUALIFICATIONS: • Highly organized with excellent verbal and written communications skills. • Sharp attention to detail. • Demonstrated flexibility and adaptability to changing priorities, deadlines, and technology. • Thrives in both a team and independent working environment. • Ability to respectfully resolve problems with clients and insurance carriers. • Proven track record of organizing and prioritizing an ever changing work load. • Minimum three years commercial lines property and casualty experience. • Insurance property and casualty license required. • College degree preferred. Please forward resume and cover letter to: David Holton, CIC, The Essex Agency Inc, PO Box 239, Essex Jct VT 05453 davidholton@essexagency.com

Granite

Mt Mansfield Maple AmTrust North America, Inc. Travelers

Champlain Ethan Allen

Berkshire Hathaway GUARD CNA

Hanover Insurance Group

Meadowbrook TPA Associates

Imperial PFS

New England Excess Exchange, LTD

MAPFRE|USA

Main Street America

MEMIC

Johnson & Johnson

Patriot Insurance Company