Kentucky IA - September/October 2016

September/October 2016

Don’t L eave the Future of Your Agency to Chance

Together...

We’re making a difference to our members, to our agents, and in our community.

200 Executive Park, Louisville, KY 40207 502.894.8484 | 800.367.5372 | www.kesa.org

What's

Inside

Page 10 Page 28

Contents

6 Background Checks and the Seven Stages of Hiring

10 Buying, selling, & merging an agency - What should you do?

15 Bring Real Meaning to “Customer Service” 20 Bright night for Make-A-Wish Gala 22 Is the Future Positive for Small, Traditional Agencies?

26 Does Your Office Play “Where’s Waldo?”

Page 31

28 What’s the Big Deal about Overtime?

31 The little stuff that drives customers away 34 How to Make Your Employess Love Where They Work

In Every Issue The Kentucky IA is the official magazine of the Independent Insurance Agents of Kentucky, and is published bi-monthly.

Editorial offices are located at 13265 O’Bannon Station Way, Louisville, Kentucky 40223.

Telephone:(502) 245-5432 Email: iiak@iiak.org Fax: (502) 245-5750 The Kentucky IA welcomes all advertising and editorial submissions. Inquiries for advertising, news releases and editorial contributions can be directed to Nikki Robins at the editorial office address or via email at nrobins@iiak.org

4 From the Chair

18 Education Calendar

5 DOI News

38 Advertiser Index

9 New Members

38 Classified Ads

9 Industry Partners

38 Social Media Links

9 Upcoming Events

38 There’s an APP for that

Mission Statement The mission of the Independent Insurance Agents of Kentucky is to be the preeminent advocate for Kentucky Independent Agents and support their business and professional development needs.

www.iiak.org | September/October | 3

Chair

Officers

From the

David M. Houk

Chair, Horse Cave 270.786.2724 George L. “Chip” Atkins

Chair-Elect, Louisville 502.585.3600 Michael G. Johnson, CIC Vice Chair, Lexington 859.233.1461 James D. England, AAI

Treasurer, Pikeville 606.437.7361 Stephen R. Kinkade, CPCU, AAI

National Director, Leitchfield 270.259.5465 Michelle L. Love

Immediate Past Chair, Owensboro 270.926.2806

Directors Allen J. Crawford, CIC, CSRM

Somerset, 606.679.6311 Neel Ford, AU, CPIA

Owensboro, 270.926.2806 Sharon B. Hill

Jamestown, 270.343.3144 Aaron LaRue

Bardstown, 502.348.0050 Skip McGaw, CIC

Madisonville, 270.821.3122 Crystal Reid, CIC

Paducah, 270.442.3533 Ray A. Robertson, CIC

Mt. Sterling, 859.498.3410 Laura Yount, CIC, CISR

London, 606.878.0100

Staff

Fall is here and with the changing of the seasons also comes a changing of the guard. This will be my final letter to you as your chair, and I would like to thank each and every one you for your support. It has been an honor and a privilege to serve you and the experiences will stay with me for a lifetime.

One of my more recent experiences was being able to speak at the MakeA-Wish Gala in August. Melinda and I are always touched by the bravery of these children and the amazing work the charity does in our state and across the country. Our event was part of a nationwide effort by Trusted Choice to support Make-A-Wish chapters throughout the country. Since its alliance began in 2011, Trusted Choice® has collectively raised more than $2.5 million nationwide for Make-A-Wish. Our sixth National Facebook share campaign in August raised $150,000.

It is fitting that this issue will touch on something that many of us struggle with: agency management and best practices. You don’t have to be an agency owner or even a principal to apply the tactics we’ve laid out. Every time I turn around I am planning for the future, tackling staff communication issues and always trying to improve our customer service.

Most recently I have been concerned about the new overtime law going into effect in December. Rick Pitts put together some valuable information that outlines everything you need to know to be prepared.

Our 120th Annual Convention and Trade Show will be here before we know it. We’ll be back at The Brown Hotel in Louisville on November 9-11.

The IIAK staff has worked hard throughout the year to ensure that this event is top-notch, and I know that this year will be no exception. There is something for everyone: a trade show with vendors from around the country to meet with face-to-face, 8 hours of CE credit, topical speakers (see page 21 for topics & bios) and even time for fun at the track and bowling. I hope to see you there!

Peggy P. Porter

President & CEO Katie M. Freshley

Education & Events Director

Sincerely,

Tara T. Purvis

Marketing Director Nikki S. Robins

Communications Director Kristie Weyer, CISR

Insurance Services Director

4 | www.iiak.org | September/October 2016

David M. Houk

DOI News

From the Commissioner By: Brian Maynard In keeping with this month’s theme – Agency Management and Best Practices – I wanted to mention a few observations from my time at the Department, in addition to input from my staff. I also want to share some of the most frequently asked agent-related questions that come to our general information mailbox.

I’m sure others will tell you about the best software to use, how to maximize your presence on social media, etc. While I think those things are important, I believe one of the best things you can do to run a successful agency is to become involved in an organization – like the Independent Insurance Agents of Kentucky – so you can meet with other agents, gain information and share your experiences.

Get involved in the community. Take advantage of networking opportunities with local organizations.

While participating in local events is important, some successful agencies take it a step beyond and sponsor/ plan activities in the community. Agents sponsor youth sports teams, have pool parties for their clients, sponsor educational sessions – the list is endless.

Perhaps the most important thing you can do is to hire the best people. Your employees will represent you – so choose wisely.

Just a few agency-related reminders from DOI: • Our Agent Licensing division reports that it receives calls from agency personnel or applicants asking if a person can schedule an exam the day after he/she has filed an application. Be advised that processing time for new agent applications is up to five business days. It is not realistic to submit an application and expect to take the exam the next day, particularly if there are issues in the background check that need to be reviewed. Status should be monitored through the applicant’s eServices account.

• We still receive a number of questions about renewals, address updates, name changes, paying fees, etc. All these functions and more can be handled easily through our eServices portal.

Please share this with new employees. This is the most efficient and certainly the fastest way to get information and make changes or payments.

• We also periodically receive requests for new licenses, even though we have not mailed licenses since 2010.

An agent can go to his/her eServices account at any time to print a license or ID card.

We are here to help your agency be a success.

Please let us know if we can help or if you have ideas on how we could serve you better.

www.iiak.org | September/October | 5

By: Virtual University The perennial challenge for employers is how to identify applicants that are the right fit and have the knowledge, skill, and abilities to do the job. In pre-industrial society, the problem was generally solved by either hiring someone that the employer knew, or basing the hiring decision upon a personal recommendation. Another method was using an apprenticeship type program that gave an employer a great deal of insight into who they were hiring.

Although these approaches are still in use today, it is no longer possible to match millions of applicants and jobs based upon the employer having a pre-existing relationship with applicants. Additional approaches such as using the internet to find good candidates have developed. Since every time an employer hires a stranger, it is somewhat of a “leap of faith,” employers need tools to make good decisions.

Employers are seeking ways to determine who the person really is and what the person has done in the past, as predictors of how they will perform. Although past is not always prologue, past performance says a great deal about how a person may be expected to perform in the future. Employers also want a means to “look under the hood” at applicants rather than just accepting them at face value.

Every hire represents a significant investment and – at the same time – a significant risk. A bad hire can result in a legal and financial nightmare. Bad hires cost an employer a great deal in terms of time wasted recruiting, hiring and training, and searching for a replacement, not to mention the job not being done. A bad hiring decision can also lead to litigation for negligent hiring, if the new employee turns out to be unfit, dishonest, or dangerous, and someone is harmed. To add insult to injury, when the bad hire is eventually terminated, employers need to deal with the possibility of a wrongful termination lawsuit even if the firing is entirely justified.

In order to evaluate the various hiring tools, it is essential to understand that the hiring process occurs on a time line. Each step of the continuum carries its own set of legal implications. Matching your hiring tools to the proper stage of the time line is key to

6 | www.iiak.org | September/October 2016

sorting out the best applicants AND to helping prevent a bad hire.

The stages and available tools of the hiring process can roughly be divided as follows: 1. Sourcing stage: This is the process of gathering potential applicants through a variety of means that can include inbound applications from job boards, websites, newspapers, or outbound efforts, such as recruiters seeking passive candidates; 2. Preliminary screening stage: In order to narrow down the applicant pool, there is a preliminary screening primarily based upon the applicants’ selfstated qualifications, conveyed by the resumes or applications or newer tools such as video websites;

3. Assessment stage: This stage can include the interviewing process to further narrow down the field of candidates, as well as numerous other assessment tools, ranging from objective testing to references from past employers or supervisors, or various other testing methods; 4. Decision process stage: Here, the employer has narrowed the pool to one, two, or three finalists and is moving toward a conditional job offer based upon an internal decision-making process; 5. Background checking stage: At this point, either a conditional job offer has been made or is contemplated, and the employer needs to exercise due diligence, typically through a background screening firm, to determine if there is any reason NOT to hire the candidate. The emphasis of a background screening firm at this point is a factual verification of details such as job title and dates;

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7. The post hire/on boarding stage: This is where an employer, for example, can complete the form I-9 process.

These seven stages illustrate a clear demarcation between efforts pointed at deciding who to hire, and efforts directed at deciding who NOT to hire.

This is where evaluation of the pros and cons of the hiring tools comes into play.

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6. The post offer/pre-hire stage: This is where an employer is able for the first time, if they so choose, to address such areas as pre-employment physicals;

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Background checks, for instance, are of little assistance in stages 1 through 5. That is because a traditional background check is only performed on finalists, where, by definition, an employer has already made a tentative decision to either hire or place that person in the group of finalists.

Background checks are used to decide who NOT to hire.

For more tips from Big “I” Virtual University, visit www.independentagent.com/vu. Big “I” members receive discounted pricing on Caliper products to help your agenct with pre-employment assessments, staff development and corporate culture. For more information, visit www.iiak.org/caliper.

www.iiak.org | September/October | 7

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Aviation | Bonds | Brokerage | Commercial Lines | Farm | Medical Professional Personal Lines | Professional Liability | Transportation | Workers’ Compensation

8 | www.iiak.org | September/October 2016

Thank You 2016 Industry Partners IIAK would like to welcome our newest members:

(as of 9/27/16) Premier

Agency Members ANSAC, Inc Louisville

Baker Insurance Agency Lexington

Diamond

Hickerson Agency Hillsboro

Platinum

For information regarding IIAK membership, contact Tara Purvis, Marketing Director 502-245-5432 • tpurvis@iiak.org

Young Agent Day at Keeneland

Gold Acuity Bolton & Company Grange Insurance Company KEMI MAPFRE Insurance Risk Placement Services, Inc.

October 14, 2016 Lexington

Silver

Upcoming Events 120th Annual Convention & Trade Show November 9-11, 2016 The Brown Hotel, Lousiville

CRM: Principles of Risk Management February 22-25, 2017 Hilton Garden Inn, Louisville

Big “I” Sales & Leadership Conference June 14 & 15, 2017 Marriott Griffin Gate, Lexington

AFCO Amerisafe, Inc. Kentucky National Insurance Co Keystone Insurers Group Motorists Insurers Group Secura Insurance State Auto Insurance Company

Bronze Alexander J. Wayne & Associates Anthem Blue Cross & Blue Shield Auto-Owners Insurance Company BITCO Insurance Companies Columbia Insurance Group Countryway Insurance Company FCCI Insurance Group FFVA Mutual Insurance Company InsurBanc

J.M. Wilson KESA KY Associated General Contractors Market Finders Insurance Corporation Midwestern Insurance Alliance Prime Insurance Companies Summit Swiss Re Corporate Solutions Westfield Insurance

www.iiak.org | September/October | 9

Buying, selling, and merging an agency What should you do? By: Ronald Kettner, CPCU & Richard F. Lund, J.D. One of the biggest decisions of your professional insurance carrier comes when you decide to either sell the agency you’ve worked long and hard to create, or to buy another agency that someone else has worked long and hard to create. You’ve met with the owners of the agency, you’ve looked at the book of business, you’ve agreed on a price, hopefully you’ve contacted your attorney to help you draft the buy/sell agreement, and you’re a few short days away from closing the deal when suddenly someone asks: what about the E&O coverage? Who’s doing what? Are you going to pick up the prior acts or am I? Can we just transfer the E&O policy to the new owners? What kind of losses have you had? All of these questions should be asked at the beginning of the talks regarding the sale/purchase, but unfortunately they usually aren’t discussed until the last minute and they can have a big impact on the deal.

Think about this, when you buy a new car or are selling your current one, one of the first things you should do is contact your insurance provider. It’s no different when you are buying or selling an insurance agency. It also applies when you are only buying or selling a book of business.

In most, if not all cases, your E&O policy states that you must notify your E&O provider within 90 days of a merger or acquisition (check your policy for verification of the time limits.) Failure to notify your carrier in a timely manner could result in a gap in coverage.

So let’s go through the steps you should follow when you are making a life and business changing decision regarding your agency.

Buying an agency

You’ve been talking with a fellow agent about buying their agency for some time and now you’ve both decided that the time is right. There are many details to consider and the first of which is to do your due diligence to review the other agencies operations, book of business, finances and E&O Policy. At this point it is advisable to retain an attorney to help you through the process. Remember, an attorney can only represent one party, not both. You and the seller should each seek separate counsel. It is a good idea to have a confidentiality agreement with the seller so that you can freely review all of the documents necessary to begin the change of ownership. After you have completed your due diligence and you and the seller are comfortable with all aspects of the agency, the attorney’s will draft the buy/sell agreement. Included will be such 10 | www.iiak.org | September/October 2016

things as the timing of the sale, the assets to be transferred, the price, and of particular importance is who is responsible for the liabilities of the selling agency. The cleanest way to do this is for each party to retain their own liabilities. In regard to the seller’s E&O policy, they will purchase tail coverage and the buyer will add the new agency’s book of business to their current E&O policy.

The reason this is the cleanest way to make the change, is because the seller will have the peace of mind of knowing that should a claim arise after the sale for acts while they owned the agency, their E&O policy will provide coverage for them. For the buyer, they know that they will not be responsible for any acts that may have occurred prior to the purchase of the agency. This is true whether or not the selling agency will continue as a separate entity or location for the buying agency. In most cases, even if the buyer maintains the new agency as a separate entity or location, it can be included on their current E&O policy for errors and omissions that are made after the sale.

Another option, while not the best way to transfer the ownership, is for the purchasing agency to agree to accept responsibility for prior acts. This is accomplished by adding the selling agency to the buying agency’s E&O Policy.

However, please remember that this must be approved by the E&O carrier before the sale is completed. It is imperative that you contact your E&O agent as soon as you begin the buy/sell process. You will be required to provide a loss history of the seller, and the carrier may require an application providing information about the mix of business, gross annual premium, commissions, staff, etc. In some cases the carrier may not agree to provide prior acts due to claims history, nature of the book of business, etc. In that case the seller should purchase tail coverage from their current E&O carrier.

One thing to keep in mind is that the cost of tail coverage or additional premium expense if the prior acts are provided by the buyer can, and should, be considered in determining the sale price of the agency.

Selling an agency

As a seller of an agency, you may feel that it is important to maintain your agency’s legacy. If this is important to you, be sure to discuss this with your attorney so that it is properly addressed in the agreement. If you have valued employees that you wish to provide for, you should include

how they will be taken care of in the agreement. This may be a source of negotiation as the buyer may not wish to add any permanent staff, so make sure this is brought up in your discussions with the buyer.

An important aspect that was mentioned previously is protection for you if a claim should arise after the sale. As stated before, the best way to ensure this is to purchase tail coverage from your current E&O carrier. While you may not want to add the expense of tail coverage and you believe you are protected because of your agreement with the buyer that they will provide coverage for prior acts and will maintain an E&O policy, you have no guarantees that it will be done. It is not unheard of after an agency sale for the buying agency to either go out of business, sell their agency to another party who will not agree to provide prior acts, or have their E&O policy terminate either voluntarily or involuntary. In each of these cases you could be left without coverage.

Another thing to consider should your agency be added as an additional insured on the buyers’ policy is that any claims, whether they are for your agency or the buyer’s agency, will be subject to the policy limit of the buyers’ policy, regardless of whether there are multiple claims as a result of either agency. In other words, are you comfortable that the policy limits of the buyers E&O policy are sufficient to cover both your and their claims? Also, it should be made clear who will be responsible for any deductible payment.

Mergers

If you are merging with another agency to either form a new agency or be a continuation of one of the two, there are a couple of different ways to handle this in regard to your E&O coverage. One way is to have a new E&O policy for the newly created entity. This ensures a clean slate for all involved. If a new policy is created, each of the former agencies can purchase tail coverage or they can be added as additional insureds on the new entity policy.

Again, keep in mind that any claims will be subject to the limits of the remaining policy and remember that this must be approved by the E&O provider prior to the completion of the agreement to ensure that the carrier can comply with your wishes. Another way to handle a merger is to terminate one policy and have that agency added as an additional insured to the policy of the “surviving” agency.

The agency that is terminating their policy can either purchase tail coverage or be added as an additional insured upon approval by the E&O provider.

Internal sale

Many times an owner has a key agency employee who they believe is qualified to take over the agency. Everything that has been stated before applies just the same in www.iiak.org | September/October | 11

these situations. There should be due diligence by both parties, attorneys should be retained, agreements drafted and entered into, and all other aspects of the change of ownership should be carefully contemplated and resolved.

Transfer of a book of business

Remember that even if all you are doing is transferring a book of business, either as a buyer or a seller, all of the things mentioned previously apply. While you might think that a transfer of only a small book of business should be uncomplicated, as soon as a claim is made it can become very complicated.

Key points to remember

1. Consult your attorney and have a formal written agreement outlining the duties and responsibilities of all of the parties.

2. Contact your E&O provider as soon as you can to ensure that coverage can be provided as you intend and that there are no gaps in coverage.

3. Giving timely notice to your E&O provider is of utmost importance as many carriers may be unable to comply with your intent after the transaction has already been completed.

12 | www.iiak.org | September/October 2016

You spent your professional insurance career building a business that has provided you with a livelihood and personal fulfillment. If you are either growing or selling your agency, you want the peace of mind of knowing that you have adequately protected yourself.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re�) and/or its subsidiaries and/or management and/or shareholders.

Ronald S. Kettner, CPCU is a Vice President and Senior Underwriter of Swiss Re/ Westport underwriting insurance agents errors and omissions coverage. He has over 30 years experience in the insurance industry, underwriting personal and commercial lines insurance as well as professional liability insurance during his career.

Richard F. Lund, JD, is a Vice President and Senior Underwriter of Swiss Re/Westport, underwriting insurance agents errors and omissions coverage. He has also been an insurance agents E&O claims counsel and has written and presented numerous E&O risk management/ loss control seminars, mock trials and articles nationwide since 1992.

Copyright 2011 Swiss Re

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14 | www.iiak.org | September/October 2016

Bring Real Meaning to “Customer Service” By: IIABA Best Practices ​​​​​​​​​​​Agencies are more successful when customer service is at the forefront of their operations. Meeting and exceeding customer expectations, responding to any and all feedback, and providing the trust and expertise they need and expect are what differentiates independent agencies from their competitors. Agencies that take the time to get to know their customers, solicit feedback, and instill the importance of putting the customer first, regardless of how the interaction occurs are the most successful. In this month’s segment of the Customer Service Experiences, learn how seeing service from your customer’s perspective can help your staff deliver great service and improve retention.

Many research studies confirm that customer service is a pivotal attribute of any insurance provider for both personal and small commercial clients. Personal lines buyers particularly are concerned with having a personal advocate who is representing the interests of the client more than the company. Small commercial lines customers are focused on quick carrier response, fair claims settlements, accurate policies, billing issues and having a knowledgeable agent.

There’s more to customer service than returning phone calls, following up on e-mail or completing annual policy checks. Customer service is every bit as much about how you do things as the daily checklist of what you do. It’s about consistent delivery of your brand values with each and every customer interaction.

It’s about seeing your services from your customer’s perspective, not from your own.

Always remember: if you can deliver against client expectations, the business will come.

Step 1: Consider what’s required throughout a customer lifecycle.

Not only are individual customer needs not the same, the same customer has different needs depending where they are in the purchase cycle.

New customers need more handholding. Don’t assume because they aren’t asking questions that they aren’t curious or confused. Explain your processes, introduce your team, let them know what to expect.

Existing customers need reinforcement that they’ve made the right decision. Remind them why certain policies or services are appropriate for their account.

Solicit regular updates on their business goals and take the time to uncover new concerns.

Refresh your account relationships. Don’t leave appreciation to chance. If you don’t have a regular schedule for client contact, create one. It doesn’t always have to be face-to-face (although that should occur quarterly at a minimum). Take the time to forward relevant articles, recognize important milestones or business accomplishments, ask questions, and listen. If you sense an area of concern or worry, address it promptly and provide solutions.

Always look for opportunities to upsell existing accounts. This should not be a heavy-handed sales job. However, during regular review of client business, share information about new or relevant products and services. Even if the client isn’t ready for a sale right away, when you position yourself as an interested, trusted resource, they will think of you first when new opportunities do arise. www.iiak.org | September/October | 15

Step 2: Convey the benefits you provide as an independent agent.

There is an intangible that independent agents bring to a relationship. Be sure you communicate these advantages clearly. In addition to your own individual brand strengths, share the strengths you likely share with most independent agents: • Understands the worries other business owners face • Flexibility • Personal interest in seeing every client succeed • Local, accessible • Invested in the community • Focused on long-term client relationships, not short-term sales • Ability to create customized coverage—not limited by corporate requirements established by headquarter offices elsewhere

Your Agency In The Community: Consider some non-traditional ways to create more touch points with your current and potential customers. Think about offering webinars, daily social media updates about fun things happening in your office, manning a booth at local trade shows and conventions. And don’t forget that while people come to these forums to learn about insurance from you, you can learn as much–if not more–from them.

IIABA’s Best Practices created; The Customer Service Experience: An Independents Agent’s Guide to Serving Today’s Consumer to enable you to provide valuable and profitable customer service as a foundation of your business. The complete guide can be found at www.independentagent.com

Step 3: Have A Consistent Strategy

While you staff may have the skills to interact with your customers, it is also important to have an overall organizational strategy to keep your customers happy. Following are some tips to ensure that your agency is constantly providing proactive customer service at every client interaction: Personal Touches Count: Your customers want to feel like they have access to real people. Don’t let your telephone prompts and website send them in a circle of never-ending frustration. Post photos and bios of your staff on your website, allowing customers to see that there are real people working on their behalf.

Be There For Your Clients: Ensure that your customers can reach you. Provide an after-hours answering service, and if there is a widespread claim situation such as a flood or hail storm, have the office staffed both early and late when needed. Avoid the use of PO boxes for your mail and make sure they know your physical address, This will help build trust and remind them that your agency is a real business, with real people who care about their needs.

Give Them What They Want: Make sure you are fully meeting your customers’ needs. Set up focus groups, interview customers, or run a survey to get ideas on what they really want from doing business with your agency. Consider a quick follow-up survey after each interaction.

16 | www.iiak.org | September/October 2016

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LOCAL KNOWLEDGE. PERSONAL SERVICE. “I’m a safety nerd and my license plate proves it – it says “R U SAFE.” I love to find trends policyholders aren’t aware of, then give them a variety of ways we can work together to reduce the losses. It’s fun to see the lightbulbs go on!”

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www.iiak.org | September/October | 17

Upcoming Education Classes Affordable Care Act: Update 2015 & Beyond* - NEW 3 hours C.E. November 8 @ 10 am

Agency Management Based E&O and Ethics* - NEW 3 hours C.E. October 18 @ 1 pm November 3 @ 10 am

Annuity Basics and Where They Fit* 1 hour C.E. October 28 @ 11 am November 29 @ 2 pm

Business Fraud Protection* - NEW 1 hour C.E. October 13 @ 11 am November 8 @ 12:30 pm

Business Auto Claims That Cause Problems* - NEW 2 hours C.E. November 10 @ 10 am

Certificates of Insurance - Emerging Issues and Other Stuff that May Scare You!* - NEW 3 hours C.E. October 21 @ 11 am November 8 @ 11 am

Commercial Lines Claims That Cause Problems* 2 hours C.E. October 20 @ 2 pm

Commercial Property Endorsements That Can Make You Money!* 2 hours C.E. November 8 @ 10 am

COPE - Property Underwriting and Effective Loss Control* - NEW 2 hours C.E. November 16 @ 10 am

Data Privacy Insurance*

2 hours C.E. October 25 @ 2 pm November 18 @ 11:30 am

Directors and Officers Liability Insurance* 2 hours C.E. October 26 @ 12 pm November 16 @ 2:30 pm

Double Trouble - Certificates of Insurance & Business Auto Endorsements* - NEW 2 hours C.E. October 21 @ 1 pm November 17 @ 1 pm

Dueling Additional Insured Endorsements* - NEW 1 hour C.E. October 21 @ 12 pm November 14 @ 1 pm

E&O Risk Management - Meeting the Challenge of Change* 6 hours C.E. October 20 @ 10 am November 1 @ 11 am

Ethics and Business* - NEW 3 hours C.E. November 3 @ 9 am

Estate Planning Basics*

2 hours C.E. October 13 @ 11:30 am November 10 @ 12 pm

Home Based Business Exposures* 2 hours C.E. October 27 @ 2 pm

Hot Topics in Personal Lines* - NEW 2 hours C.E. October 20 @ 1:30 pm November 16 @ 2:30 pm

Liability Issues to Worry About - Indemnity Agreements and Additional Insureds* - NEW 2 hours C.E. October 11 @ 2 pm

* - Provided by

18 | www.iiak.org | September/October 2016

Long Term Care Insurance* - NEW

Rental Cars – More Than Meets The Eye* - NEW

National Flood Insurance Program Basic Course - 2016 (includes 2015 updates)* - NEW

Shake, Rattle & Roll With It – Earthquake Basics* - NEW

2 hours C.E. October 27 @ 2 pm

3 hours C.E. October 13 @ 12 pm November 10 @ 2 pm

1 hour C.E. November 10 @ 1:30 pm

Those Kids and Their Cars!* - NEW

Personal Fraud Protection* - NEW

2 hours C.E. October 24 @ 9 am

1 hour C.E. October 25 @ 1:30 pm November 17 @ 2:30 pm

Top 5 Life Insurance Uses* - NEW

Personal Lines Claims That Cause Problems* 2 hours C.E. November 8 @ 2 pm

Professional Ethics in the Insurance Industry* 3 hours C.E. November 4 @ 11 am

Property & Liability Concepts* - NEW 2 hours C.E. October 19 @ 2 pm

We’re the quote you could come up against, so why not join us?

2 hours C.E. November 17 @ 1 pm

What You Need to Know About Employment Law & Coverage* - NEW 2 hour C.E. October 20 @ 2:30 pm November 16 @ 11:30 am

Workers Compensation Beyond the Basics* - NEW 3 hour C.E. December 8 @ 1 pm

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www.iiak.org | September/October | 19

Bright night for Make-A-Wish Gala

By: Nikki Robins

Make-A-Wish® Ohio Kentucky & Indiana held their 7th Annual BIG Wish® Gala on Friday, August 5 and it was nothing short of magical. The Independent Insurance Agents of Kentucky proudly sponsored the event for the third consecutive year, along with UAW Ford.

While the event moved venues to the Seelbach Hotel in downtown Louisville, none of the enthusiasm or inspiration wavered. Guests enjoyed a short cocktail reception filled with a great selection of silent auction items from trips to Mexico to local memorabilia from Churchill Downs and Muhammad Ali. The night officially kicked off with opening remarks from our very own David Houk and greetings from Lauren Adams of WLKY news, the evening’s emcee.

“Make-A-Wish Ohio, Kentucky and Indiana was thrilled to once again partner with IIAK as a gala sponsor this year, which gave us a unique opportunity to grant more life-changing wishes for children and to share the positive impact of the mission with IIAK clients across Kentucky,” said Doug Kelly, President and CEO of the

chapter. “Your association is truly transforming the lives of local children, and we are forever grateful” Local wish kid Will Leonberger, 17, served as the night’s featured speaker as Make-A-Wish celebrated achieving the important milestone of granting the chapter’s 1,500th Kentucky wish in 2016.

Additionally, Make-a-Wish Ohio, Kentucky & Indiana, along with the family of late wish kid Gabe Kinderman, presented chapter wish kid, Victoria Boals, with the first “Gabe Kinderman Courage Award,” honoring the bravery and positive spirit of children who are continuing to fight through their life-threatening medical conditions.

This was the most successful gala for the chapter, raising a record-breaking $211,000 to grant wishes statewide.

Michele & Rick Landberg

Eric & Crystal Reid

Nikki Robins & Mike Johnson

Mike & Peggy Porter

Amanda & Jimmy England

Mickey England & Jay Page

Michelle, Chris & Daniel Love

Katie Freshley & Keith Hines

Lindsay & Eric Harden

Jill & Jimmy Blount

20 | www.iiak.org | September/October 2016

120th Annual Convention & Trade Show November 9 - 11, 2016 • The Brown Hotel • Louisville

Protecting Your Organization from Computer Crime

Swiss Re Mock Trial

(2 hrs C.E. credit KY/IN)

presented by

presented by

Michael Bazzell This updated session focuses on recent trends of online fraud, computer intrusion, and ways that suspects steal valuable data from your company. The presentation includes the details of how hackers commit their crimes and what any employee can do to protect company assets. The audience will learn immediately how password hacking, email phishing, wireless access, telephone scams, social engineering, and portable devices are an emerging threat against every business. Live examples of ‘hacking’ into information will shock the audience, while detailed solutions will be displayed on how to stop the threat.

Michael Bazzell spent 18 years as a government computer crime investigator.

During the majority of that time, he was assigned to the FBI’s Cyber Crimes Task Force where he focused on “Hackers” and various computer crime investigations.

As an active investigator for multiple organizations, he has been involved in numerous high-tech criminal investigations including online child solicitation, child abduction, kidnapping, cold-case homicide, terrorist threats, and high-level computer intrusions.

YAC Breakfast

(3 hrs C.E. credit KY/IN)

with special guest

Richard Lund, JD

On September 11, 2001, Sgt. Maj. Tony Rose was talking with his co-workers in the Pentagon about the World Trade Center attack, when American Airlines flight 77 crashed into the building at over 400 miles per hour exploding directly under Tony’s second floor office killing twenty-nine of his fellow soldier and civilian employees. Blown to the floor by the concussion blast, Tony watched in slow motion as the building ripped apart around him and the 2200-degree fireball ignited everything it touched.

Bushwood Country Club v. Danny Noonan’s No Risk Insurance Agency is a Mock Trial presentation designed to provide a humorous and entertaining method of providing risk management ideas to a large audience outside of the normal classroom setting. While the characters are fictional, the facts and circumstances are based on real errors and omissions claims that have been made against Swiss Re Corporate Solutions policy holders. These credits can be used towards your E&O loss control credit.

Richard Lund is a Senior Underwriter in the Independent Insurance Agents Errors and Omissions Program (IIP) of Swiss Re. Richard is responsible for underwriting E&O business in Tennessee and Missouri.

In addition to his underwriting duties, Richard is the E&O Risk Management Coordinator and oversees loss control and risk management for the IIP. He works closely with the Independent Insurance Agents and Brokers Association (IIABA) both nationally and with the individual state IIABA associations to develop, implement and promote ongoing risk management efforts for independent insurance agents. He has also authored numerous insurance agents E&O articles and presented loss control and risk management seminars, webinars and podcasts across the United States.

Tony Rose

Tony is a Mental Health Licensed Professional Clinical Counselor. He served as the Department of the Army’s Senior Career Counselor Sergeant Major, at the Pentagon where he received the Army Soldier’s Medal for Heroism for reentering the burning Pentagon five times to save lives on 9/11 and the Purple Heart for personal injuries incurred. Tony’s numerous military awards and decorations also include Israel’s Mighty Man of Valor Award and the American Yellow Ribbon of Freedom Award.

Visit www.iiak.org to register www.iiak.org | September/October | 21

Is the Future Positive for Small, Traditional Agencies?

By: Chris Burand

22 | www.iiak.org | September/October 2016

As with most broad looking-into-the-future answers, it depends. It depends on knowledge, commitment, and recognizing reality.

Knowledge I find one reason many small, traditional agency owners are discouraged when looking into the future is partially caused by a lack of knowledge. Sometimes they read too much industry press written by inadequately knowledgeable people and sometimes they just don’t read. (As Mark Twain famously asked, “What is the difference between a man that doesn’t read and one that can’t read? Nothing.”)

The inaccurate information being written and causing consternation includes the aging industry, the inability to develop new people, and how a few heavy advertising direct writers are having all the success.

First, the industry is not really aging. Individuals are aging, as are their peers, making it seem like everyone around them is aging. The average agency owner age has not changed materially since I’ve been in this industry which has been 25 years. It was 56-58 years old then and its 57-59 years old now. Writers expressing concern the industry is nearing collapse because of aging agency principals are simply Chicken Littles.

Second, the ability to develop new people has never been better. The resources for testing, hiring, educating, and training new people are of far higher quality and abundance than any time in my career.

The problem I see is that few agency owners know of the resources or they do not use the resources appropriately.

Third, the heavy direct advertising is having an effect.

It is successful. However, it is a strategy that ONLY APPLIES IF the company/agency is big enough to spend enough AND if the client target is not primarily interested in more than a superficial transactional relationship. The independent insurance agency system WAS DESIGNED TO AVOID BOTH CONDITIONS. The carriers that originally distributed insurance through independent insurance agencies did not advertise to the general public because they relied on their agents to advertise. Those agents in turn advertised generally on a community platform and marketed on a social platform. The advertisements were at the Little League park, high school year books, local newspapers, and so forth. The marketing was through relationships and true social networking versus electronic social networking. These methods worked because the client target was someone

wanting a relationship. Going forward then the question becomes, who is your client target and if it is people wanting superficial transactional relationships, can you afford to advertise adequately?

Commitment The question is not only can you afford to advertise adequately, but will you commit to advertise so significantly? Your advertising budget may have to quintuple. Historically agencies, especially smaller ones, have not had to make much of a commitment once established. This is because once established, agencies’ retention rates were adequate to generate safe cash cows and since a great many agency owners were satisfied with the cash generated, they could just ride along. I hear the concern in many agency owners’ voices these days because they see they have to make a commitment and they don’t want to do so. One reason they enjoy the business is the flexibility they have and a commitment can sorely limit that treasured flexibility. The emotion tied to committing oneself to building a future is what causes so many to wonder about their future.

On the other hand, approximately 5,000 new agencies have been created in the last five years. That is an amazing number and many of these agencies have made a commitment to the future. They haven’t yet experienced the cash cow and flexibility so they’re just busting their butts to pay the bills. They don’t really have the same concerns. They are playing offense to win and the traditional agents are playing to not lose. Playing to not lose is rarely a winning strategy and insurance carriers recognize the difference when appointing agencies.

The solution many such agencies have latched onto is a cluster or aggregator. Done well, clusters and aggregators may be a solution, but the majority of these entities have been established sloppily.

Sloppiness seems to abound because the members do not want to make a true commitment to an enterprise that ultimately requires a true commitment. These entities are partnerships and any partnership that truly succeeds requires a complete commitment.

Going forward then, the future is truly bright for those willing to make a true commitment to building their agencies every single day. This means selling every day. This means developing people using the great tools available.

www.iiak.org | September/October | 23

Accepting Reality The reality is that owning and running an independent insurance agency is going to get tougher. More business operational knowledge will be required, more insurance technical knowledge will be required, and more leadership will be required. Instead of resting on one’s sales, reality is that no amount of volume will ever be enough. For example, historically in small towns many agencies would grow to some large percentage of the market and then plateau because the reality was that with their market share, they could not grow much more. The new reality is that it is time to start selling insurance in the next town over.

The reality is that more structure is required to minimize E&O exposures, to appeal to younger employees, and to develop new employees more effectively. The reality is that your companies are no longer going to depend on just agencies to make their sales. They know some people only want superficial transactional relationships and they’re going to advertise to that audience. They know some agency owners are committed and they know some are not, they know some listen to too many tall tales about what is happening and they know some are quite well informed.

In sum, the reality is that in the past, to put in the terms of the wonderful book by David McNally, The Eagle’s Secret, Survivors could do just fine in this industry. Going forward, this industry has a great future for Thrivers, but maybe not Survivors.

In fact, I don’t think I have seen more opportunity for Thrivers than ever before because historically, the ease with which Survivors survived was an important impediment to Thrivers thriving. Companies protected Survivors, customers would not leave Survivors easily, and the historic independent agency distribution model was designed to protect Survivors. The upheaval pressure Survivors are feeling, causing them to question the future of small traditional agencies, is directly correlated to their position as Survivors.

Thrivers are not concerned about their futures because their futures are so bright, they have to wear shades.

Chris Burand is president of Burand & Associates, LLC, an insurance agency consulting firm. Readers may contact Chris at (719) 485-3868 or by e-mail at chris@burand-associates.com.

NOTE: None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article.

Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.

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30071A

24 | www.iiak.org | September/October 2016

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Right?

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Offering each and every client an umbrella not only protects those who choose to purchase the coverage. It protects your agency from liability. And it protects your book of business, since studies show that customers who have multiple policies are less likely to move their business elsewhere.

As a Big “I” member, you have access to a stand alone personal umbrella program from A+ rated carrier RLI, featuring: Limits up to $5 million available Excess UM/UIM available in all states You can keep your current homeowner/auto insurer 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

Competitive, low premiums for increased limits of liability Simple, self-underwriting application that lets you know immediately if the insured is accepted E-signature and credit card payment options Immediate coverage available in all 50 states plus D.C.

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Does Your Office Play “Where’s Waldo?”

By: Steve Anderson How does your office keep track of where employees are and when they will be back?

Unfortunately, too many agencies are still stuck on using oldfashioned “analog” in/out boards to monitor the whereabouts of employees. It is probably time you give up the old and explore new options available to you with a Windows-based electronic in/out status board. It can be a great solution for saving your employees time and, at the same time, letting everybody know who is where.

It is still helpful to keep track of who is coming and going. To do this accurately, we need to shift from the old and out of date tools and adopt tools that are up to date. With the help of an electronic in/out board, your staff’s status, availability, and location are now just a few clicks away. Instantly, you receive the information that you need!

The modern versions of the in/out board are typically Webbased, which leverages every employee smartphone for quick and automated updates of their location. It is easy to get started: create an account and then add the users. As a user signs in through his Web browser, iPhone, or Android phone, it takes just a few clicks to update their status.

There are many other options where you can add status messages such as Out for Lunch or Unavailable. The electronic in/out board will automatically reflect the updated information to all users.

Features to look for in an electronic in/out board Geo-fencing: It should have an onscreen map that can be used to designate a virtual boundary around your office. So when an employee comes in or leaves that particular area, the GPS on his smartphone automatically updates their status accordingly.

This solves one of the biggest issues of ensuring that staff uses the electronic in/out board. With geo-fencing, you do not have to run after your employees. Also, remember that the iOS and Android apps don’t go beyond the given location while tracking, so any privacy concerns are taken into account.

Usernames and passwords: Adding users can be a tedious job so you can request employees add themselves by sending email invites. Once they receive the information, they can set their usernames and password individually.

26 | www.iiak.org | September/October 2016

Reasons to use in/out status board software Staff collaboration and management: This information improves collaboration among employees within a company.

Many services have a built-in private social network enabling you to create public and private groups.

Improves customer service: The two aspects that make a business or company successful are exceptional customer service and fast response. It is easy to let people know the status of an individual and when they are scheduled to return to the office.

It tracks the available resources: The software helps you track the resources and manage them. It covers the working status of the used resources, the user it is assigned to, and precise schedules of those resources in the Calendar.

Attendance tracking and time: It gives precise data for when an employee arrives and leaves the office.

Mobile device accessibility: Employees can use mobile devices to update and maintain their current location and status.

Using an in/out board continues to be sound management practice. Translating it to an electronic version enhances its usefulness.

I have included a spreadsheet with information on a few vendors. I have not done an in-depth review on any of the products but included it as a tool you can use to start your research.

What do you currently use to keep track of employee whereabouts?

Let me know if you have any recommendations on products and services that we can pass along.

Reprinted with permission from Steve Anderson’s TechTips Newsletter. You can sign up at http://www.steveanderson. com/techtips

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www.iiak.org | September/October | 27

What’s the Big Deal about Overtime?

By: Rick Pitts

The score’s not tied and this column isn’t an attempt to explain the National Football League’s regular season and playoff overtime scoring and rules. It’s about something that’s at nearly the same level of complexity, but is a whole heckuva lot more important to agencies – the new Department of Labor rules on overtime pay. So, what follows is not the X’s and O’s of drawing up football plays, but instead a few Q’s (questions) and a few A’s (answers…we hope!).

I’ve been seeing headlines about this – what’s the big deal?

The United States Department of Labor is in charge of enforcing overtime pay laws throughout the country. The overtime law is part of the Fair Labor Standards Act (FLSA), which actually had its start as part of the New Deal. It passed in 1938 and it was the law that introduced the forty hour workweek into statute. In May of 2016, the Department of Labor announced new rules under the FLSA that are designed to make a whole lot more workers eligible for overtime. The new rules were and are controversial, but they are final. As of right now, they will go into effect December 1 of this year.

How’s it make more people overtime eligible?

We all know that employees get paid different ways. Some get paid a salary; some get paid for each hour that they work. In agencies, many producers get paid commission.

However, for purposes of the FLSA, there are really only two types of employees: the exempt and the nonexempt. “Exempt” workers are carved out of the overtime requirements of the FLSA. “Non-exempt” workers are the ones who, under the FLSA, have to be paid overtime.

There are a bunch of different types of exemptions – things like being a forestry employee or a lumber worker for small firms, or an aircraft sales person. However, the exemptions most employers typically use are commonly called the “white collar” exemptions. They give an exemption from overtime law for qualifying executive, administrative, and managerial employees.

The biggest thing that the new Department of Labor rules do is “raise the floor” for qualifying for the so-called “white collar” exemptions. Right now, if an employee makes more than $455 per week, that employee is eligible for consideration to see if they meet the rest of the tests to be a qualifying executive or administrative/managerial employee.

28 | www.iiak.org | September/October 2016

Under the new rule, the test will go to $913 per week (or just about double). That means that the threshold goes from $23,660 in annual pay to $47,476.

What do you mean, “raise the floor”?

If you’re shooting for the “white collar” exemptions, ask this question first: “does this person make more than $913 per week?” If the answer is “no,” then that person isn’t “exempt” and probably has to be treated as an hourly worker who’s eligible for overtime. If the answer is “yes, that person makes that much money,” then you go on to the other tests to see if they actually do qualify for exempt status.

What other tests?

Things like, “do they have a primary duty of managing two or more full time equivalent employees?” or “do they have a primary duty of exercising discretion and independent judgment with respect to matters of significance?” And things like, “do we actually treat them as an exempt or salaried employee?” The employee and the position has to pass those tests, too.

So this $913 isn’t the only question?

No, it is not. Depending on the answer to that one question, it’s just a gateway to the other tests. That’s why we say “raise the floor.” It means raise the threshold for eligibility.

Does this apply to everyone in our agency?

Maybe; maybe not. This is where this really gets confusing.

Many agencies have producers who are paid on a commission basis. The new rule might have some impact on those commissioned salespeople. According to a document the IIABA put out earlier this year, there is no specific provision in the FLSA that makes insurance sales people “exempt.” As a result, employees who are in a sales position have to meet a separate test for exempt status. This particular exemption is called the “outside sales employee” exemption and it has a specific test.

What’s the test?

The Department of Labor’s Fact Sheet #17F says, “To qualify for the outside sales employee exemption, all of the following tests must be met: • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

• The employee must be customarily and regularly engaged away from the employer’s place or places of business.”

Sounds like a tough test to meet.

It is. Our national IIABA described it as “narrowly defined,” meaning, not as widely available as you might think. Here’s an example from the Department’s Fact Sheet: “Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.”

However, it does have one huge advantage if the test is met – the salary threshold test does not apply. As the Department says, “The salary requirements of the regulation do not apply to the outside sales exemption.”

So the $913 requirement doesn’t apply?

Not to the outside sales exemption. It still does if the agency will be going for the executive, administrative, professional, or managerial exemption.

But I heard the rules were changing on commissions.

How is that going to affect all this?

Well, it’s not exactly commissions per se. Instead, there is a rule change that will allow employers to count certain “nondiscretionary bonuses and incentive payments” to determine if the $913 per week is met. Those incentive payments can include commissions. Under the new rule, as our national says, commissions can be used “to satisfy up to 10% of the $47,476 salary threshold, provided those payments are made on a quarterly or more frequent basis,” and if there is a “catch up” provision for the next quarter.

Wait. I thought you said the $913 doesn’t matter?

Again, it doesn’t if the agency is going for the “outside sales” exemption. It does if the agency’s going for the “white collar” exemptions. And, under the new rule, commissions can count toward seeing if the $913 per week is met. So, if the agency has a management employee partially compensated through commissions, those commissions can count toward meeting the new, higher floor. The commission / incentive payments can also count toward other exemptions we haven’t even mentioned, such as highly compensated employees.

I think I’d rather talk about the other overtime rules.

According to the National Football League, the league uses a “modified sudden death” system in the event of a tie. “The system guarantees each team a possession or the opportunity to possess, unless the team that receives the opening kickoff scores a touchdown on its initial possession.”

Sounds like it’s just as complicated as the Department of Labor rules.

Wait until we discuss the college football overtime rules.

Richard S. Pitts, IIAK’s General Counsel is also part of our newest member benefit, First Call Free Legal. Members receive up to a 30minute phone consultation on an insurance or agency-related matter once a year at no charge. Contact IIAK for more information.

Find out more on DOL Overtime Regulartion by visiting www.independentagent.com/GovernmentAffairs/Issues/overtime.aspx

www.iiak.org | September/October | 29

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30 | www.iiak.org | September/October 2016

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The little stuff that drives your customers away

By: John Graham

With all the talk today about the need to create a great experience for customers, why are so many companies overwhelmed with a tidal flood of customer complaints? Much of it is little, picky stuff. But small things get big in a customer’s mind, and the next thing you know, the customer is gone — for good. Spotting the little stuff that upsets customer is the first step. The next one is to doing something about it.

5. Having to repeat your story. It’s not only frustrating and drives customers out of their minds, but there’s no acceptable reason why it should occur. Yet, it happens all-too-frequently. “Isn’t this information already in your computer?” a customer asks. The response is often an unsatisfactory excuse.

Here are examples of little stuff that drive customers crazy — and away:

6. Being put on hold endlessly. There is nothing worse that having to hear the same words repeated endlessly: “Your call is important to us. A representative will be with you shortly.” After 25 times the voice adds, “We’re sorry for the inconvenience.” The message the customer hears is different: “My call isn’t important to you.” Customers retaliate by leaving.

1. “We make it easy for you.” For many customers, these words are a red flag. They’ve been duped too often. What’s easy from a company’s viewpoint may be complicated and confusing to its customers. Check with them before using “easy” or “convenient.”

2. Counter intuitive websites. If visitors get confused when trying to navigate a website, they leave, unwilling to spend any time trying to figure it out. Websites are a marketing tool that must make sense to users.

3. Making excuses. “Sorry you had a problem. I gave that to my assistant to take care of….” Or, “I meant to get back to you but I was in meetings all afternoon.” Such words inflame customer rage, and send the message that someone is disorganized, distracted or incompetent.

Companies should be an “Excuse-Free Zone.”

4. Slow is a killer. Amazon’s “1-click,” Apple pay, and 4-hour (or less) delivery all point in one direction: fast is never fast enough, as customer expectations go higher and higher.

Slow, by whatever standard, isn’t tolerated.

7. Getting differing answers. “The salesperson assured me…,” says the customer when making an inquiry a week later. “Oh, we’ve never done that,” according to someone else. It raises the question, “Can I trust this company? Am I going to get what I expected?” Creating doubt drives customers away.

8. Putting customers on the defensive. When they asked why something occurred without prior notice, the manager said, “We sent an email to everyone and posted the notice.” That’s how to make customers feel stupid. A better approach may have been, “I understand how you feel if you didn’t get the email. I’ll make sure that’s corrected.”

9. Lack of knowledge. Even five years ago, having to deal with people who lacked knowledge was irritating, but often ignored. Today, with instant access to endless sources, customers won’t tolerate it. If customers want help, they’ll find it. Ignorance isn’t bliss; it’s lost customers.

10. Faking answers to questions. Customers may not know everything, but they figure it out fast when someone makes up answers. It sounds basic, but employees should be empowered to get accurate information.

11. Getting passed around. After telling your story, there is nothing more aggravating than to be told, “You’ll have to talk to Martin about that. I’ll transfer you.” Then, you hear that Martin is away from his desk or helping other customers. Today, we get one shot at satisfying customers.

www.iiak.org | September/October | 31

12. Inconsistency. It’s a lack of consistency that upsets customers. It applies to all types of change, from phone options, to personnel, website navigation, discounts, return policies, and product/service availability. So, prepare the way with customers before making even small changes.

And, remember, customers are smart, so don’t tell them a change is to improve service. They won’t need any help in making that decision.

13. Not using communication options. Whether it’s texting, a chat line, or a help line, making it convenient for customers to get information or get their questions answered, technology helps maintain customer relationships.

14. Making things complicated. The CVS clerk rang up the purchases and keyed in the coupons, until he came to the $6 “good customer reward.” Pointing to a coupon dispenser, he said, “You need to get it from the machine over there first and come back.” Not good. Customers want everything as simple as possible.

15. Not answering inquiries. The button on the restaurant’s website, said, “Send us a message,” noting that it will be answered within an hour. Three weeks later, still no response.

The story is repeated when the name of this restaurant comes up. Tending to customers is as important as working the grill.

16. Making changes without telling customers. Let customers know why, and when you’re making changes.

The city was buried in snow, but the Boston Globe emailed its home delivery customers letting them know the Sunday edition would come at night when there was less traffic.

Result: happy readers and a lot fewer complaints.

17. Lack of follow through. Broken promises are indelible; they don’t go away. They influence how customers feel about a company from then on, and it’s even worse when customers take the initiative to find out why and are told one or more of the following, “I’m sorry, but I got busy,” or “It slipped through the cracks,” or “I thought I did that,” or “I’m just getting around to it.” Customers deserve timely responses.

18. Not showing appreciation. No customer likes feeling ignored or, worse, taken for granted. Relationship building begins with finding thoughtful expressions for saying “thank you” and “you’re important to us.”

19. Ignoring social media postings. With so many customers checking out businesses online, negative and inaccurate reviews can be damaging to a brand if ignored.

Such examples make it clear that the little stuff that aggravates customers is a big deal.

John Graham of GrahamComm is a marketing and sales strategistconsultant and business writer. He publishes a free monthly eBulletin, “No Nonsense Marketing & Sales.” Contact him at jgraham@ grahamcomm.com or call 617-774-9759.

.®

.

There can be no doubt that all our knowledge begins with experience. – Immanuel Kant

www.summitholdings.com

Policies are underwritten by Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, authorized insurers in AL, AR, FL, GA, IN, KY, LA, MS, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. ©2016 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801

32 | www.iiak.org | September/October 2016

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How to Make Your Employees Love By: Emily Huling Where They Work You’ve probably seen businesses in your community earn the coveted “best place to work” awards. What makes these types of awards especially prestigious is that many of them are based on employee surveys of their own workplaces.

Over the years, numerous clients of mine have received these types of awards. Here are five initiatives, programs and ideas they’ve all shared that contribute to becoming a “best place to work.”

1) Support of good health and well-being.

Studies show that employees who are both physically and emotionally fit are happier—and also boast fewer absences, produce higher-quality work and contribute to positive morale.

Employer-funded initiatives that generate improved health and well-being include: • Complimentary healthy food in the break room.

• On-site fitness programs or access to a local health club.

• Breaks to use fitness facilities.

• Quiet rooms for meditation and recharging.

• Flexible work schedules to accommodate family and personal needs.

Top employers recognize the influence of employees’ families in creating a positive work environment.

They give special attention to the family in activities

34 | www.iiak.org | September/October 2016

like picnics and holiday parties, office trick-ortreating, bring your child to work day and other celebratory occasions at the office. These employers may also send company newsletters to the home, along with restaurant gift cards as a family thankyou.

One company owner I know assists with financial well-being by offering his staff a complimentary meeting with a financial adviser to learn about retirement plans, college saving plans, budgeting and eliminating debt. He also gives his employees a personal subscription to the Kiplinger Personal Finance magazine.

2) Continuous learning and career development.

What employees learn on the job is theirs to keep forever. That’s why top performers are passionate about furthering their knowledge to advance their earning potential and careers.

Consider establishing a company university and asking each employee to create a personalized education curriculum. Options abound: Self-study, in-house training, industry association classes, complimentary vendor programs, co-worker instruction and formal mentor programs could all be part of your in-house education offerings.

“Best place to work” businesses also encourage employee participation outside the office in

Toastmasters, Dale Carnegie programs and Fred Pryor and Skillpath seminars. Spend time working with each employee to create a development plan that benefits the individual, your company and your clients.

3) Personalized workstations.

While standards and procedures must be consistent to ensure quality work and outstanding service, individuals have unique preferences that suit their best thinking, creativity, physical comfort and productivity. Ergonomic experts can help by recommending an appropriate office setup.

Standing workstations are becoming very popular.

Choice of chair, desk height, keyboard and monitor position, and foot stools are just a few things that can make a huge difference in avoiding discomfort and injury.

Personalization can also go one step further: Awardwinning workplaces give office-based employees the option to work from home one or more times a week, an option that also helps promote good health and well-being.

4) Commitment to a cause.

Participating in something for the greater good improves morale and encourages teamwork.

Popular volunteer activities your business may want to consider include tutoring children, participating in Meals on Wheels, helping out at senior care centers and fundraising for walks or races. Consider offering each employee four hours a month to volunteer as they choose.

5) Time for fun.

I have several clients who excel in this area. Pool and ping-pong tables that double as meeting tables make for spirited Friday afternoon competitions.

Employees can use a well-equipped kitchen to make meals together or participate in cooking classes. Put an oversized crossword puzzle on the wall for all to work on. Designate a table for jigsaw puzzles. Host a talent contest. Start seasonal traditions such as an Easter egg hunt, a Halloween costume contest or a chili competition. Ask employees for their ideas for fun and amusing activities—you’ll get dozens of suggestions.

Emily Huling helps the insurance industry create top-performing sales, service and leadership organizations. She is the author of “Selling from the Inside,” “Great Service Sells” and the audio program Service Selling Supercharge.

Did You Know?

According to the Wall Street Journal, happy employees:

Stay twice as long in their job as their least happy colleagues.

Achieve their goals 31% more often.

Believe they are achieving their potential 2x as much.

Help their colleagues

33% more often than unhappy ones.

www.iiak.org | September/October | 35

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SERVICE-CENTERED WAY OF DOING BUSINESS

We form trusting relationships built on loyalty and integrity. What sets us apart is far more than what we do — it’s how we do it.

Join Us MEGAN WETLI MEGAN.WETLI@MOTORISTSGROUP.COM | 614-225-8389 CHRISTOPHER SNYDER CHRISTOPHER.SNYDER@MOTORISTSGROUP.COM | 513-490-5816

www.iiak.org | September/October | ®37

Classifieds Acquisitions

Established Louisville agency interested in acquiring insurance agencies in Jefferson and surrounding counties. If you are interested in selling, merging, or need assistance with perpetuation, we would like to talk with you in confidence.

Call R. Alex Rankin, CPCU or Steve B. Thompson, CPCU, at Sterling G. Thompson, Co. at 502-585-3277

Looking for Producers

Independent with top best markets looking to expand presence in Jefferson, Oldham or Shelby counties.

Wanting Personal lines, Producer or book of business to move or purchase.

All arrangements possible, in strict confidence. Please send inquiries to Turner Insurance Agency, 2460 Shelbyville Road, Shelbyville, KY 40065 or call Kurt Turner, CPCU at 502-633-6060.

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Ad Index Amerisafe Arlington/Roe Associated Risk Managers Big “I” Markets Bolton & Company EMC Insurance FCCI Guard Insurance J.M. Wilson Kentucky Retail Federation KEMI KESA Motorist Mutual RLI Personal Umbrella Secura Summit Consulting Swiss Re Professional Liability United Fire Group West Bend Mutual Insurance

12 8 24 17 OBC 13 16 19 7 IBC 14 IFC 37 25 30 32 36 27 33

For classified ads or to advertise in the Kentucky IA, contact: Nikki Robins, Communications Director at 502-245-5432 or nrobins@iiak.org

38 | www.iiak.org | September/October 2016

Simple In/Out

Cost: Free Rating: ««««« Learn more: https://www.simpleinout.com/ “Simple In/Out is a Web-based in/out board, one that leverages employees’ smartphones for easy and even automated location updates. Getting started is ridiculously simple: just create a free account, then start adding users. You also have the option of adding a status message, like “in a meeting” or “out to lunch.”

What really sets the service apart is support for GeoFencing: Using an onscreen map, you can designate a virtual fence around your office When an employee enters or leaves that area, his GPS-equipped smartphone updates his status accordingly.” - PC World

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Phone: 502-426-7474 Fax: 217-477-6460 www.krfsif.org www.iiak.org | September/October | 39

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