Wisconsin Independent Agent | December 2020 Magazine

wisconsin INDEPENDENT AGENT DECEMBER 2020

Gifting you with a new way to connect pages 4-5

CONTENTS wisconsin INDEPENDENT AGENT

COVER STORY: Gifting You with a New Way to Connect We launched the IIAW Online Community at the beginning of November, and we are already seeing our members utilize this new platform as a way to connect with industry professionals. Tis the season for connecting, especially with our new platform!

PAGES

4-5

INSURANCE BARTENDER..........................................................12-13

INDEPENDENT INSURANCE AGENTS OF WISCONSIN 725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 Fax: (608) 256-0170 www.iiaw.com

2020-2021 EXECUTIVE COMMITTEE President:

Darrel Zaleski | Spectrum Insurance Group, Eau Claire

President-Elect:

Marc Petersen | American Advantage - Petersen Group, New Berlin

Secretary-Treasurer:

Nick Arnoldy | Marshfield Insurance Agency, Inc., Marshfield

IIAW Welcomes New, Exclusive Supporting Company Member, Security Financial Bank

Chairman of the Board:

AGENCY OPERATIONS...............................................................14

State National Director:

Chris Costakis | Midwest Insurance Group, Delafield

Celebrating Together - Apart

Steve Leitch | Leitch Insurance, River Falls

RISKY BUSINESS...........................................................................16-17

2020-2021 BOARD OF DIRECTORS

The Mirror Test & The IIAW Emerging Leaders Have the Christmas Spirit

Mike Ansay | Ansay & Associates, Port Washington

EXCLUSIVE SPOTLIGHT............................................................19

Mike Harrison | R&R Insurance Services, Inc., Waukesha

SECURA Insurance Company: Updated Brand, Same Genuine Company

Aaron Marsh | Marsh Insurance Services, Inc., Rice Lake

GOVERNMENT AFFAIRS............................................................20-21

Joanne Lukas Szymaszek | Johnson Insurance Services, LLC, Racine

Legislative Republicans Defend Majority Absent Blue Wave

ASK AN EXPERT.............................................................................22-23 COMMENTARY FROM COUNSEL...............................................24

First Policyholder Win on COVID-19 Business Interruption: North Carolina Court Sides with Restaurants

VIRTUAL UNIVERSITY.................................................................26-27 Coronavirus Revisited - Should the Business Income Policy Respond?

MEMBERS IN THE NEWS..............................................................28-29 FOOD FOR THOUGHT....................................................................31

ADVERTISERS INDEX AAA......................................................................16 Badger Mutual Insurance............................31 DAIS......................................................................30 Erickson Larsen...............................................31 IMT........................................................................32 Integrity...............................................................25 Penn National...................................................3 Robertson Ryan & Associates...................29 Security Financial Bank................................11 West Bend..........................................................10 Western National............................................18 2 | DECEMBER 2020 |

wisconsin INDEPENDENT AGENT

Dan Lau | Robertson Ryan & Associates, Milwaukee Chad Tisonik | HNI Risk Services, LLC, New Berlin Andrea Nelson | Unisource Insurance Associates, LLC, Wauwatosa Jonathon Zwettler | Baer Insurance Services, Middleton

IIAW Staff Matt Banaszynski | Chief Executive Officer 608.256.4429 • matt@iiaw.com Mallory Cornell | Vice President and Director of Risk Management 608.210.2975 • mallory@iiaw.com Kim Kramp | Association and Agency Accounting Manager 608.210.2976 • kim@iiaw.com Trisha Ours | Director of Insurance Services 608.210.2973 • trisha@iiaw.com Kaylyn Zielinski | Marketing and Communications Coordinator 608.210.2977 • kaylyn@iiaw.com Evan Leitch | Technology and Risk Advisor 608.210.2971 • evan@iiaw.com Andrea Michelz | Membership Engagement Coordinator 608.210.2972 • andrea@iiaw.com Diana Banaszynski | Education Coordinator 608.256.4429 • diana@iiaw.com Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2020

For information on advertising, contact Kaylyn Zielinski, 608.210.2977 or kaylyn@iiaw.com.

In 1919, A group of Pennsylvania farmers founded Penn National Insurance to provide affordable workers’ compensation insurance.

Today, Penn National Insurance sells property-casualty insurance in 11 states by partnering with more than 1,200 independent agency operations. In 2012, we affiliated with Wisconsin-based, Partners Mutual Insurance Company. As one company, we bring the personal attention and local focus of a regional carrier, along with the quality of products and services of national carriers.

Interested in partnering with a thriving insurance carrier with superior customer experience? We are looking for select commercial lines-oriented agencies in Wisconsin.

Contact: Vicki Lentz 262-432-3420 vlentz@pnat.com

Clayton Zogata 262.432-3422 czogata@pnat.com

• Strong financial performance and A.M. Best Financial Strength Rating of A• Expanded Commercial Lines product and services with competitive pricing and comprehensive coverages to help our agents grow profitably.

• Comprehensive Personal Lines product offerings, including Homeowners Equipment Breakdown and additional protection plans.

• State-of-the-art quoting, processing and self-service tools, making is easier and faster to meet your customers’ needs.

• Local experienced underwriting, claims and management staff

An Equal Employment Opportunity/Affirmative Action Employer ©2020 Penn National Insurance

Policies issued for domiciled businesses and individuals in Wisconsin and Iowa are underwritten under our affiliate, Partners Mutual Insurance Company.

ONLINE COMMUNITY

GIFTING YOU WITH A NEW WAY TO CONNECT As we enter the 2020 holiday season, it’s not Our Online Community is for every single one a surprise that the holidays are feeling very of our members, whether that be independent different this year. Holiday parties are being agents, carriers, vendors, companies, etc. put on hold and end-of-year networking events are being postponed. However, we are gifting you with a solution to allow for much-needed networking in the time of I really like the concept of the Online social distancing! You no longer need to Community. One of the benefits of being sift through the posts on LinkedIn to find involved in the Big I in general is the content and connections that matter to opportunity to interact and get to know other you - that’s what our Online Community agents from across the state. The Online is for: a curated platform for insurance Community is a great new part of that, professionals. This holiday season, we’re gifting you with a place for connection, in a especially in light of the fact that we can’t get time when in-person gatherings are nontogether in-person like we normally would. existent.

It gives us the chance to ask questions of At the time of writing this article, we have already amassed over 120 members (and growing every day) who are engaged in our Online Community! That’s over 120 people who are ready to connect, collaborate and engage with you!

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our fellow agents and share experiences or advice, all in the interest of making us better as agents and as an industry. And it’s so easy to use, even I can do it. > Steve Leitch, Leitch Insurance Agency, Inc.

The IIAW awarded Thought Leaders (previously known as Committee Members) who signed up for our Online Community. Each registered Thought Leader received a $25 gift card to a local business of their choice. Above: Amy Brice, AMERISAFE, used her gift card at Cottage Cafe in Madison; Bottom Left: Ryan Waite, Neckerman Insurance Services, used his gift card at Forage Kitchen in Madison; Bottom Middle: Jeff Thiel, R&R Insurance Services, used his gift card at Weissgerber Golden Mast Inn in Okauchee; Bottom Right: Steve Leitch, Leitch Insurance Services, Inc., used his gift card at DeVine Liquor in River Falls.

Join the community to earn your own rewards!

As we’ve mentioned in previous publications, our Online Community is two-fold. Not only are we offering a free and fun platform to exclusively network, but we’re also supporting our local communities through this outlet as well.

We just celebrated Small Business Saturday on November 28th, 2020, and we can proudly say that the IIAW and our Online Community participants truly played a part in supporting local Wisconsin businesses!

We’ve awarded our Thought Leaders (members registered to be a verified resource for questions and content within each of the Online Community Groups) a gift card for a local Wisconsin business of their choice.

Every person who participates in our Online Community can earn rewards. Each time you engage within the Community, you earn points.

Then, at the end of each quarter, if you’ve

reached certain point thresholds, you’ll receive some awesome rewards.

These rewards are: a $25 gift card to a local Wisconsin business of your choice, a $100 donation to a Wisconsin non-profit of your choice and an IIAW swag bag which contains items like Yetis, desktop whiteboards, smart plugs and more!

To join the IIAW’s Online Community, go to iiaw.com/joincommunity. Be sure to check your spam/junk folders for the invite email after filling out the survey on our website. We are looking forward to connecting with all of you in our Online Community! Happy Holidays!

>K aylyn Zielinski

Marketing & Communications Coordinator wisconsin INDEPENDENT AGENT

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The Independent Insurance Agents of Wisconsin Presents:

Online Community • JOIN THE CONVERSATION •

Step One: Sign Up Go to iiaw.com/joincommunity. First, fill out the survey on the web-page. Then, you’ll get an invite email from IIAW Online Community - be sure to check your junk or spam folder.

Once you click sign up in the invite email, you’ll have access to the Online Community!

Step Two: Join Groups Find and join the Groups (formerly known as “Committees”) that align with your interests. ne w!

ne w!

Agency Accounting

Employee Benefits

Agency Operations

Government & Regulatory Affairs

Agency Technology

Industry Relations

Education & Events

ne w!

Internet of Insurance

Emerging Leaders

Marketing & Communications

ne w!

Legal

Step Three: Earn Points Earn points as you connect, collaborate and engage with others in the Online Community!

+10

points

Per post, discussion or question

+5

points

Per reply, answer or comment

+1

point Per each like you receive on content you’ve posted

Step Four: Earn Rewards

Each quarter, reach certain point thresholds to receive the below rewards:

300-599 points: $25 Gift Card to a Local Business Near You

600-899 points: $25 Gift Card & $100 Donation to a Local Charity Near You

900+ points: $25 Gift Card & $100 Donation AND IIAW Surprise Swag Bag

CONTINUING

EDUCATION IIAW ONLINE EDUCATION & CE CLASSES 2020 DATE

TIME

COURSE

DECEMBER 07 08 08 09 09 09 10 10 10 14 14 15 15 15 16 16 16 16 17 17 17

12PM-3PM Contractual Liability... Separating Fact From Fiction 8AM-11AM Personal Lines Checkup - What’s New and What’s Changed 12PM-3PM Insurance Valuation Strategies 9:30AM-11:30AM IIABA Webinar: 3 Keys to Getting the Named Insured Correct 12PM-3PM E&O: Commercial Liability Coverage Gaps & How to Fill Them 12:30PM-2:30PM IIABA Webinar: 9 Rules for Reading an Insurance Policy 9:30AM-11:30AM IIABA Webinar: Why Certificates of Insurance - Just Why? 12PM-3PM Insuring Trusts - Protecting Your Client’s Wishes 2PM-4PM IIABA Webinar: 5 Contractor Coverages Every Agent Must Understand 7AM-9AM IIABA Webinar: 3 Keys to Getting the Named Insured Correct 9:30AM-11:30AM IIABA Webinar: 4 Key Personal & Commercial Line Exposures 7AM-9AM IIABA Webinar: 5 Contractor Coverages Every Agent Must Understand 9:30AM-11:30AM IIABA Webinar: 9 Rules for Reading an Insurance Policy 12PM-3PM Ethical Dilemmas... Making the Right Choice 7AM-9AM IIABA Webinar: Why Certificates of Insurance - Just Why? 8AM-11AM Personal Auto Hot Topics... What You Need To Know 9:30AM-11:30AM IIABA Webinar: How to Understand Commercial Property Underwriting 12PM-3PM Condominiums 8AM-11AM Cyber Liability 12PM-3PM E&O Roadmap to Homeowners Insurance 1:30PM-3:30PM IIABA Webinar: Rules for Developing the Correct Premium

For more information and to register for these classes, visit iiaw.com/education.

New course offerings coming in 2021!

QUESTIONS? CONTACT IIAW AT 608-256-4429 OR AT DIANA@IIAW.COM

The right partner and the right plan for your business Together with WPS Health Insurance and WPS Health Plan, Independent Insurance Agents of Wisconsin offers high-quality coverage and networks, affordable plans, and a wide range of benefit choices.

The choice is yours!

Choose network options to fit your unique needs

Opt for a WPS plan that offers a

ROBUST NETWORK

HEALTH PLAN

In Wisconsin Convenient access to thousands of health care providers, professional service locations, and hospitals throughout the state.

WPS Statewide Network Take advantage of health care access throughout Wisconsin, including the following providers and systems: » » » » » » » » »

Aspirus Network, Inc. Aurora Health Care Bellin Health Children’s Health System Dean/St. Mary’s/SSM Health Froedtert & Medical College of Wisconsin Mayo Clinic Health System University of Wisconsin Hospital and Clinics and many more

WPS Select Plus Network Choose some of Wisconsin’s top health care providers throughout the state: » » » » » » » » » »

Aspirus Network, Inc. Aurora Health Care Bellin Health Children’s Hospital Gundersen Health System Holy Family Memorial ProHealth ThedaCare University of Wisconsin Hospital and Clinics and many more

Choose the narrower WPS Select Plus Network Find Out More For a complete list of WPS Statewide Network or WPS for a

LOWER PREMIUM

Select Plus Network providers, visit wpshealth.com and click Find a Doctor.

Providers can leave or enter the network at any time. It is recommended that you check the network status of your provider on a regular basis.

Build your custom insurance package Health insurance remains one of the most expensive and frustrating employee benefits your business offers. Since the Affordable Care Act (ACA) passed, many have experienced price increases, higher out-of-pocket costs, and limited plan options.

IIAW heard your concerns and is proud to announce that a new IIAW Association Health Plan is here. IIAW membership is required of the business owner, there is health underwriting, and health insurance must be offered to all eligible employees.

In addition to health insurance, when you team up with WPS Health Insurance and WPS Health Plan, you’re eligible for exclusive IIAW member pricing on additional services provided by EPIC Specialty Benefits. This lets you offer employer-paid ancillary benefits, such as life, short-term disability, and long-term disability, to your employees.

Contact us today!

The Benefit Works Julie K. Allord, Broker/Owner Awarded Top Employee Benefits Broker for 2014 The Wisconsin Independent Insurance Agents Association 6200 Mineral Point Road Madison, WI 53705 Direct line: 608-729-1001 General line: 608-729-1000 Your Team Kristina Maher: 608-729-1003 kmaher@thebenefitworks.com Visit: thebenefitworks.com

WPS Health Insurance and WPS Health Plan offer: » » » » »

Comprehensive, cost-effective networks locally and nationwide Friendly, local customer service Help managing your health care Ethical, honest support Flexibility of an independent health insurer

©2020 Wisconsin Physicians Service Insurance Corporation and WPS Health Plan, Inc. All rights reserved. JO18974

33575-100-2010

Pamper your customer’s business with a policy from West Bend.

Your customers love their business. They put everything into it, nurtured it so it would grow.

An insurance policy from West Bend is the best way to keep it happy, healthy, and profitable.

So wrap it in the cozy warmth of the Silver LiningÂŽ.

INSURANCE BARTENDER

IIAW WELCOMES NEW, EXCLUSIVE SUPPORTING COMPANY MEMBER, SECURITY FINANCIAL BANK You have likely read the quote, “Coming together is a beginning, staying together is progress, and working together is success” by Henry Ford in a lot of IIAW publications and on our website. We have adopted this quote as a theme for the Association during the COVID-19 pandemic because it exemplifies the relationship (in various stages) we have with independent agencies, carriers and supporting companies throughout Wisconsin.

Recently, Security Financial Bank (SF Bank), through one of our board members, approached us about getting involved in the Association and working with the Association and its members. I was curious as to why a bank without a significant insurance agency division would want to partner with and join as a supporting member of the IIAW. I immediately began to research SF Bank and found out that they are a growing $600 million independent, community bank with physical locations throughout Northwestern Wisconsin and a presence across the state for the last 85 years.

One thing stood out that sets SF bank apart from other financial institutions: Their team of experienced professionals who understand 12 | DECEMBER 2020 |

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independent insurance agencies and their goals, desires, strategies, obstacles, and finances. Much to my surprise, SF Bank had created a niche, right here in Wisconsin, in working with and lending to independent insurance agencies. From mergers and acquisitions to refinancing to banking services, they understand and work with several of our members.

My team and I at the IIAW quickly set a meeting with Paul Rudersdorf, CEO & President of SF Bank, Curt Van Auken, Relationship Manager, and the rest of the SF Bank team to learn more.

I quickly learned that our motto of “Coming together is a beginning, staying together is progress, and working together is success” was more than just a shared vision by the leaders at SF Bank, but that the morals and ideals our members live by and exhibit in their communities are also engrained in the culture of SF bank. Like so many of our IIAW members, SF Bank and its employees are actively involved in supporting the communities they serve by sponsoring, donating, and partnering with more than 140 organizations.

In talking with Paul Rudersdorf, one of my first questions was regarding how the bank came to specialize in working with independent insurance agencies. Paul said, “Years ago, our bank had a CPA board member (Dirk Nohre) who was very involved in the insurance industry. His knowledge sparked interest for us and made us question why banks are often uncomfortable lending to agents. Our curiosity resulted in our desire to get educated; to understand the nuances of the

industry. What we learned was that insurance agencies have a predictable earnings stream in their book of business with a low failure rate. We also learned that agents could use some honest banking advice. As a community bank, we became very comfortable lending in this space. We enjoy working with the insurance industry and look forward to growing our insurance agency customer base.”

I have since learned more about the people and the institution and shared our story of the association and how the bank could provide a valuable service to our members. It is unique that we have a financial institution with the capabilities and competencies to not only work with independent agencies, but they truly understand the intricacies of independent insurance agencies. It was clear that there was a mutually beneficial partnership with SF Bank. As a result, we are proud to announce SF Bank as the newest Exclusive Supporting Company Member of the IIAW. When I mentioned to Paul that I was going to write this column, I asked him, why do you want to partner with the IIAW? “In October, a group of our employees met with three employees from IIAW. The exchange was open and informative.

Instantly, we could tell how deeply IIAW gets involved with their agency members, not only in educating agents, but providing services that allow agencies to profitably grow. It was easy for us to decide we wanted to learn more and become a bigger part of making agencies thrive.

This partnership will evolve as each of us gains more in-depth knowledge of our respective industries. This will happen with continual, open communication. We look forward to a long relationship with IIAW”, Paul said.

I echo Paul’s sentiment and I too look forward to a long relationship with SF Bank. The IIAW looks forward to helping educate their associates on independent insurance agencies, promoting the bank and its brand and working together to serve independent insurance agents. For far too long the Association was routinely asked, “Is there a financial institution in Wisconsin we can turn to and trust who truly understands the business model and needs of an independent insurance agency?” Before today, we did not have a partner we could recommend to our members, but that has now changed. I encourage you to contact Paul, Curt or any other members of the SF Bank team. I know you will be as impressed as I have been. As always, I am happy to talk with you regarding our process and due diligence in SF bank and the relationship we’ve established with the team.

While this partnership of coming together is just the beginning, our journey of working together for the progress and success of independent agents throughout Wisconsin is just getting started! > Matt Banaszynski CEO of IIAW

Matt’s Mixology Patrón Ruby Spritzer “Pa·tron” (pātron) otherwise known as a person who gives financial or other support to a person, organization, cause or activity. It’s fitting that this month’s drink recipe features Patrón and is perfect for celebrating the holidays or helping you get through the holidays.

Ingredients

• 1.5 ounces Patron Silver Tequila • 1 ounce pomegranate juice • 0.5 ounces fresh squeezed lemon juice • 2 ounces Martinelli’s Sparkling Apple Cider • 1 dash Angostura bitters • Lemon twist for garnish

Directions

1. Combine tequila, pomegranate juice, lemon juice, sparkling apple cider and bitters in a large, ice-filled shaker and shake to chill.

2. Strain into champagne flutes, add a twist of lemon and serve.

Courtesy Patrón Tequila wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 13

AGENCY OPERATIONS

CELEBRATING TOGETHER - APART We are officially in the midst of the holiday season!

For me, just like for many Americans, that usually means family gatherings, parties with friends, homecooked meals shared among loved ones, giggling grandchildren, clinking glasses, yummy treats, twinkling lights and lots of laughter. But 2020 isn’t like other years.

As COVID continues to upend our lives, and cases tick up across the country, our usual group celebrations are off the table this year. So we are left to wonder: How can we stay safe yet connected during the upcoming holiday season?

As seasoned work-from-home experts, we at WAHVE know there are many ways to build bonds and engage in fulfilling social activities from a distance.

It’s not just our business - it’s our passion! A few of our tried-and-true strategies for bringing together remote work teams can be applied to our personal lives, as well. For example: Virtual Toasts. Get out your glasses and give them a digital “clink” with your friends and loved ones over Zoom, Skype or any other video conferencing service. Just because we can’t physically be in the same place doesn’t mean we can’t see each other’s faces, catch up and enjoy a well-deserved cocktail together. To bring the group together more, consider building in a shared expeirence, whether that’s a theme for the party, a specialty food or drink (having everyone bake their own chocolate chip cookies or mix their own margaritas, for example), or instituting a party game or ice breakers (“share your favorite winter activity”).

Send Care Packages. Another fun way to offer a shared experience among relatives or friends is to 14 | DECEMBER 2020 |

wisconsin INDEPENDENT AGENT

send everyone a small gift that each person can open onscreen, during a group video call. This builds the bond and keeps some of the tradition of the holidays going.

Don’t forget the holiday cards. If you usually send out family updates during the holidays, whether that’s in the form of a card or a newsletter, it will be extra appreciated this year because people are thirsty for real, human connections. Consider personalizing them a bit more this year, perhaps by handwriting them or adding in customized notes for each recipient.

Schedule group activities. To build in more connection during this potentially isolating time, get creative. Offer some structured activities for people to participate in, such as virtual exercise, cooking or painting classes. You might be surprised at who signs up and what you can learn from each other.

Go outside. It’s possible for small groups of family members to celebrate outdoors, socially distanced with masks. Enjoy the season’s crisp weather by investing in warm blankets and outdoor heaters, then place chairs at least 6 feet apart and sip cups of hot cocoa, apple cider, or hot toddies together.

The holidays are usually filled with precious moments of togetherness. With a little creativity and positive spirit, we can ensure this year’s festive season is just as meaningful and connected as in the past. We are in this together. > Sharon Emek, PhD, CIC CEO and President, Work at Home Vintage Experts

AGENCY SOLUTIONS

TRUSTED CONSULTING FOR THE INDEPENDENT AGENT Because we know how important it is for you to succeed in business, IIAW has created a portfolio of solutions built just for you.

TECHNOLOGY

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MARKETING

We help you navigate and choose the best solutions to fit your needs

Protect your investment by reviewing business goals and strategies

Update and improve agency workflows and operating procedures

Review financial processes for accuracy and efficiency

Review your agency marketing efforts and discover helpful tools and resources

YOUR FIRST CALL

We are a trusted partner for independent agents across the nation and a leader in agency risk management and agency solution

Mallory Cornell, IIAW Vice President mallory@iiaw.com www.iiaw.com wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 15

RISKY BUSINESS

THE MIRROR TEST Does your client’s new policy match their old one?

There are a lot of changes going on in the insurance industry and oftentimes change also means emerging risk. If you have listened to any E&O webinars lately, there is a good chance you have heard of the “mirror test”. If you are not familiar with this term, then it is something to pay attention to no matter what line of business you work in.

The agent has a duty to provide the insured with information on these changes and should also have documentation of the customer’s acknowledgment that they understand these changes.

As with any material conversation, a customer sign-off would be ideal but an email from the insured would still provide a good defense if an E&O claim was made.

The reason we are talking about the “mirror test” is because the market is hardening. This change is causing agents to look for better pricing from new carriers to help their customer’s avoid premium increases. The risk? Well a new policy also means new terms and conditions. Does the insured still have the same limits and the same coverage options with their new carrier? It may not be a deal breaker if the coverage has some differences, but what is important is making sure the client is aware of these differences.

If you have questions regarding your current workflow when a customer is moved to a new carrier – or your lack of workflow – feel free to reach out to the team at IIAW for support. There have been E&O claims arising from this issue in the past and we anticipate seeing more of them during this hardening market.

An important value of an independent agent is having access to multiple carrier options. We need to make sure this value does not also come with an increased E&O exposure.

AAA Independent Agents earn commission on each membership sold!

For more information on becoming an AAA partner contact: Leo Plese, Regional Sales Director at lmplese@acg.aaa.com or (630) 328-7076

IIAW Emerging Leaders Have the Christmas Spirit December is here and the holiday season is upon us. As we all try to make the most of this dumpster fire that is 2020, it likely does not feel the same as year’s past.

But there is a special gift to be given this holiday season and it comes from the IIAW Emerging Leaders Committee. Last year, the committee came together and gave an assorted gift of toys, crafts and games to the American Family Children’s Hospital in Madison. These gifts were distributed to patients receiving care from the hospital during the holiday season.

So…do we just not do anything? No way!

Definitely not an option for this group of generous young professionals. Instead, there is a donation fund set up to raise money for the hospital’s Child Life Department Fund. The fund is well on its way of exceeding its $1,000 goal (follow the IIAW Facebook page for final donation amount!). The fund will be accepting donations until December 9th and on December 10th will virtually present a check to Lori Schultz, the Development Program Coordinator for American Family Children’s Hospital.

If you or someone within your organization would like to donate or would like to join the fun on the IIAW Emerging Leaders Committee, please reach out to Mallory Cornell (mallory@iiaw.com).

The IIAW would like to send a huge THANK YOU to the Emerging Leaders committee and to everyone who has donated to fund for the American Family Children’s Hospital.

Photo: In 2019, the IIAW Emerging Leaders Committee donated toys, games and crafts to the children receiving care during the holiday season.

This year, because of the need to be especially cautious with the pandemic, the hospital cannot accept in-kind donations.

> Mallory Cornell,

IIAW Vice President and Director of Risk Management

wisconsin INDEPENDENT AGENT

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EXCLUSIVE SPOTLIGHT

UPDATED BRAND, SAME GENUINE COMPANY Building positive relationships and providing exceptional customer service will always be the foundation for success at SECURA. We pride ourselves on not only delivering this foundation, but doing it in a uniquely genuine way.

SECURA Insurance, headquartered in Neenah, Wisconsin, is actively refreshing our brand to highlight this genuine way we do business.

After gathering data from all of our customers – our agency force, our policyholders, and our associates – the results told us our greatest strengths are being genuine, approachable, relationship-focused, and quick to respond. We took this feedback and applied it to the SECURA brand to better reflect who we are as a company.

SECURA’s Purpose Statement We replaced our mission and vision statements with a purpose statement – a meaningful proclamation that SECURA associates live out every day with each interaction they have with you and our shared customers.

We’re making insurance genuine – from the protection we provide to the relationships we build. It’s our mission to provide quality coverage and unmatched service to empower our independent agents and protect our customers.

The SECURA Story There are many ways to tell others who we are as a company; we thought the most efficient way is through video. Visit secura.net/genuine to watch and share our video on your social platforms, with policyholders, or with prospects.

Reflecting the SECURA Brand Our approach to brand colors and visual identity has also updated. We refreshed our color palette to be more bright and vibrant – reflecting our company culture and personality. You’ll notice changes to our printed materials and web platforms as we continue to update these now and into the future.

Your partnership as an independent agent with SECURA is invaluable. We made these brand changes to better reflect the relationship we have with you, and with our shared customer – the policyholder. As we continue into the future under this refreshed brand, we invite you to share in our purpose – to Make Insurance Genuine.

Questions? We’re happy to help. Please contact our Marketing team at marketing@secura.net.

wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 19

GOVERNMENT AFFAIRS

LEGISLATIVE REPUBLICANS DEFEND MAJORITY ABSENT BLUE WAVE

We were told a large, political blue wave was imminent on Tuesday, November 3rd. Every single Wisconsin poll conducted since this spring had Joe Biden defeating Donald Trump on average by 6.7 percent, according to RealClearPolitics (RCP) data.

The mainstream news media, night after night told us the President had no chance of winning in Wisconsin both in 2016 and 2020. Wisconsin’s respected Marquette University Law School poll had Biden ahead by 5-points. And an ABC/Washington Post poll, just a week before the election, had Biden leading by a whopping 17-points. Internal campaign polls were hinting that numerous down-ballot legislative races, particularly in the Milwaukee suburbs, would get swept up in the wave. Privately, Wisconsin stateside Republicans were preparing for a worst-case, “bloodbath” scenario.

Then November 4th came and we woke up to discover that the blue wave never came and the polling was wrong for a second straight Presidential election. While Trump lost the state of Wisconsin to Biden in unofficial results by less than one percent, arguably the opposite of a blue wave happened here and elsewhere across the country. Republicans so far have done better than analysts expected in state legislative contests, as well as the U.S. Senate and House. The pollsters were caught with their pants down...again.

To date, at the federal level the GOP has picked up 7 House seats and are positioned to win additional contests narrowing the Democratic house majority going into the next Congress. In the U.S. Senate, Democrats won seats in Arizona and Colorado, while losing one in Alabama. The biggest surprise of the night though was Republican incumbents thought 20| DECEMBER | DECEMBER2020 2020 | | 20

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to be in danger to one degree or another in Alaska, Iowa, Maine, Montana, North Carolina, and South Carolina all held on, comfortably winning in most cases.

With 50 seats declared for Republicans, control of the U.S. Senate will come down to two runoff races in the state of Georgia on January 5. If incumbents David Perdue or Kelly Loeffler hold onto their seats, Republicans will have at least a one seat majority and keep control. If Democrats can sweep both contests, Democrats will regain control of the majority with Vice President-elect Kamala Harris as the deciding vote on many issues.

Stateside in Wisconsin, Senate Republicans managed to increase their majority from 18 seats to 21 seats by knocking off an incumbent Democrat and winning an open seat, falling just one seat short of a two-thirds veto proof majority. Several incumbent Republicans who many thought could fall on election night, like longtime Senator Alberta Darling near Milwaukee and Senator Patrick Testin in central Wisconsin, easily won their re-election. Assembly Republicans did lose two seats in the Milwaukee suburbs, but they maintained their majority with 61 seats and almost defeated two Democratic incumbents in northern Wisconsin, when they were fully prepared on election eve to lose up to 8 seats. It’s no secret to anyone paying attention that Republicans were out-polled and heavily out-spent

by Democrats this election cycle by a 2:1 margin on the prediction of a Democratic blue wave, yet they managed to return comfortably in control of both houses for the upcoming 2021-22 legislative session.

The result of the election in Wisconsin is politically significant for state lawmakers here because in 2021 they start the important process of redistricting that

will determine legislative district boundaries and possibly partisan control of the legislature for the next decade. Fortunately for Democrats, Governor Tony Evers will have a say in the redistricting plan which is likely to end up in the courts. But this next partisan battle makes the 2022 gubernatorial race that much more consequential for both parties. And that race has already begun.

Next session, there will be a total of 24 new lawmakers sworn in to the Legislature in January.

Sixteen are new to the State Assembly (6 Republicans and 10 Democrats) and 8 will join the State Senate (5 Republicans and 3 Democrats). Five of the Senator-elect members previously served in the State Assembly. The 24 new lawmakers is slightly below the 27 new lawmakers that were on average sworn in each session over the last 10 years. Nearly two-thirds of the 99 members of the State Assembly were elected in 2014 or since 2014. 59% of Assembly Republicans and 68% of Assembly Democrats have been elected since 2014. Almost half of Assembly Democrats (47%) were elected in the last two election cycles. 70% of the State Senate has been elected since 2014. Over three-fourths of the Senate Republican Caucus (76%) have been elected since 2014 and just over half (7 of 12) of the Senate Democrats have been elected since 2014. These figures represent a newer and less experienced Legislature than years past. The Insurance industry alone will face new chairs of the Insurance Committees in both the Senate and Assembly.

Outgoing Assembly chairman, Representative Kevin Petersen, was elected to the leadership post of Assistant Majority Leader and can no longer chair a committee. He has served as Insurance Committee chair since 2011. And Senate Insurance Committee chair, Senator Dave Craig, did not seek re-election this fall.

Following the election, all four legislative caucuses quickly elected their respective leadership for the 2021-2022 legislative session. The most notable changes took place in the Senate where Senator Devin LeMahieu (R-Oostburg) was elected to serve as the new Senate Republican Majority Leader replacing outgoing Senator Scott Fitzgerald who won election to U.S. House of Representatives in the 5th congressional district. Senator Chris Kapenga (R-Delafield) was chosen to serve as Senate President replacing Senator Roger Roth of Appleton who came up short running for the Majority Leader post.

Here is the full slate of caucus leadership for next session: Assembly Republicans • Speaker – Robin Vos (R-Rochester) • Speaker Pro Tempore – Tyler August (R-Lake Geneva) • Majority Leader – Jim Steineke (R-Kaukauna) • Assistant Majority Leader – Kevin Petersen (R-Waupaca) • Caucus Chair – Tyler Vorpagel (R-Plymouth) • Assistant Caucus Chair – Cindi Duchow (R-Town of Delafield) • Caucus Secretary – Jessie Rodriguez (R-Oak Creek) • Caucus Sergeant at Arms – Samantha Kerkman (R-Salem)

Assembly Democrats • Minority Leader – Gordon Hintz (D-Oshkosh) • Assistant Minority Leader – Dianne Hesselbein (D-Middleton) • Caucus Chair – Mark Spreitzer (D-Beloit) • Assistant Caucus Chair – Lisa Subeck (D-Madison) • Caucus Secretary – Beth Meyers (D-Bayfield) • Caucus Sergeant at Arms – Kaylan Haywood (D-Milwaukee)

Senate Republicans • Majority Leader - Devin LeMahieu (R-Oostburg) • President - Chris Kapenga (R-Delafield) • President Pro-Tempore - Patrick Testin (R-Stevens Point) • Assistant Majority Leader - Dan Feyen (R-Fond du Lac) • Caucus Chair - Van Wanggaard (R-Racine) • Caucus Vice-Chair - Kathy Bernier (R-Chippewa Falls)

Senate Democrats • Minority Leader – Janet Bewley (D-Mason) • Assistant Minority Leader – Janis Ringhand (D-Evansville) • Caucus Chair – Jeff Smith (D-Eau Claire) • Assistant Caucus Chair – Melissa Sargent (D-Madison)

>M isha Lee IIAW Lobbyist

wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 21

VIRTUAL UNIVERSITY

ASK AN EXPERT

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Q: Snow Plowing... BAP or CGL? Your insured hires an independent contractor to snowplow his lot. If your insured is sued, under his BAP should he have at least Symbol 8, or 9 coverage? In other words, is this a hired or nonowned auto exposure? Or does he need a BAP at all for this claim? Could his CGL policy suffice?

With regard to Hired Car and Non-Owned coverage, which of the two coverages would apply to a commercial insured who hires someone to snowplow his lot? This company has hired an independent contractor that snow plows property in the winter months. Agency staff is having a discussion as to whether it would be the Hired Car coverage or the Non-Owned Auto coverage that would come into play in the event of a claim for bodily injury to a pedestrian that is hit while the property is being plowed.”

therefore have coverage under the CGL. As a matter of risk management, the proper owner should require the other person to maintain auto liability coverage under which he is an additional insured.

---------If your property owner is sued, the nonowned auto coverage would defend and pay any damages for your insured and subrogate against the snow plowing firm. But your insured could also get defense and coverage from the snow plowing firm’s Business Auto Policy (assuming they have one). The Who Is An Insured part of the Liability section names anyone vicariously liable for an insured as an insured. Get a copy of the snow plower’s policy and look over the coverage.

A:

----------

Below are some observations from the Virtual University faculty.

The presumption is that your insured has a CGL and a BAP policy. As you can see, Symbol 1 is preferred for BAP coverage, though Symbols 8 and/or 9 might be necessary depending on the carrier. However, while a BAP is probably justified for other exposures, is it needed here?

---------Sounds like a non-owned auto exposure to me (only those autos you do not own, lease, hire, rent or borrow that are used in connection with your business). Your insured is hiring an independent contractor to do a job. I don’t think that would constitute “hiring” an auto.

---------In my view, it’s non-owned. But, why not solve the whole issue (and more) by requesting both symbols 8 and 9, or symbol 1.

---------The person who hires someone (an independent contractor) to do snowplowing on his property would be covered under his or her CGL policy. The coverage applies because the automobile exclusion does not. Note it only applies to BI or PD arising out of the ownership, maintenance or use or entrustment to others of any auto owned, operated by, rented or loaned to any insured. None of these applies to an independent contractor.

The named insured owner of the property to be plowed would 22| |DECEMBER DECEMBER2020 2020 | | 22

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If your insured has an ISO CGL policy and the party being hired is an independent contractor, as opposed to an employee/ CGL insured, then the CGL policy should respond. This is what the CGL “auto” exclusion says: “Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading”.

The contractor’s vehicle is not “owned or operated by” the insured, nor is it “rented or loaned to” the insured. The contractor is simply performing a service for the insured that involves a vehicle and the exclusion when read literally does not apply to this scenario as long as the other party is not an insured under the CGL. Not that BAP coverage isn’t a good idea. For nonowned exposures, Symbol 1 is preferred; otherwise both Symbols 8 and 9. It is the rare business that doesn’t have an employee use their own vehicle for business on occasion…Symbol 9 is a must and, to be fair, I’d add the Employees As Insureds (CA 99 33 02 99) endorsement to extend liability coverage to the employee himself or herself.

Q: How Should My Agency Handle Nonresponsive Separated/ Divorced Individuals on a PAP? I’m working on establishing a standard office procedure for our office when dealing w/ divorce and personal auto policies. I’ve done some reading on the procedures when the ex-spouse is not a named insured and my specific questions are tailored towards when the ex-spouse IS the 2nd named insured and is non-responsive to our office.

Our office has the stance that we like to speak with both parties anytime there is a separation or divorce; however, we will occasionally run into the situation where we don’t have good contact info on the ex or they are non-responsive to any contact we make. At what point are we able to remove the other party? If the first named insured sends in a copy of the formal divorce decree, are we able to then proceed with removing the other party?

A: In addition to the good things you are doing, in the case of a nonresponsive ex-spouse, you need to be sure to do four others: 1. Document the titles, usage, and locations of all cars on current policies and deal with that information appropriately 2. Send a postal letter and email to the last known address of the nonresponsive person, explaining exactly what changes are being made to the policy and strongly suggest he or she get in touch with you.

3. Maintain cell numbers for ALL members of households so you can reach out that way; and if course document that attempt and if contact is made, do as appropriate and document.

4. Determine and document all potential and previously listed drivers and add as appropriate.

If property coverage is also in place, that is another whole set of issues.

When I teach personal lines classes, I facetiously advise not letting your insured’s get divorced because it causes a LOT more work and exposure for you.

BTW: Commercial “breakups” have their own issues and needs for an agency to address.

---------It’s rarely safe to remove a policyholder without their consent - ideally in writing. If a former or separated spouse isn’t willing to sign a policy release, then it’s best to let the current policy lapse and issue a new policy for the spouse who wants to continue their coverage. Even then it’s a good idea to advise the former or separated spouse of the cancelation by sending notice to them at a new address. The person wanting to continue coverage could even authorize their removal from the current policy and its transfer to the other party.

There are several companies now that have introduced provisions in their policies that authorize any named insured, or in one case the first named insured, to make changes to the policy including removing the other policyholder. In those cases where there is contract a provision like that, removal of one insured by another may be appropriate. Even so, it’s a good idea to notify the affected party whenever possible.

----------

This is a touchy situation and a possible E&O exposure. You cannot remove a named insured without their permission. You could remove the other ex-spouse and write a new policy.

However, there might be a problem if the remaining spouse does not receive a premium notice and the policy lapses. I would try to get an address of the ex-spouse and send a letter that he or she should obtain separate coverage, either through you or another agent.

---------I would let the insurer make the decision since only they and the insureds are parties to the contract. The first question is, what’s the hurry to remove the other party? Is one of the parties requesting that? If so, have that person get the other party to respond and comply.

What can or can’t be done is governed by the insurance contract’s provision for who is authorized to make changes. It may also be governed by how the parties are shown on the declarations, for example, John AND Joan Doe or John OR Joan Doe. The bottom line is that I would not do anything to reduce or eliminate coverage for a named insured without express written permission.

---------It isn’t a simple question because of the legal implications. In most cases, you’ll want to be on record recommending that your client discuss this with his or her attorney. The important thing for fact finding is to inquire about the ownership of all property (houses, cars, RVs, investment property, etc.) and the occupants or users of these properties. If those steps are done carefully, you’ll know if there’s another party who needs to be addressed. If there is one, whether it be an ex-spouse, a trustee, lessee, etc., the situation should be referred to a senior member of your team to be sure all of the exposures are handled correctly. There are too many potential problems to deal with in this short-answer forum, or in your checklist for that matter.

ASK AN EXPERT wisconsin INDEPENDENT AGENT

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| DECEMBER 2020 | 23

COMMENTARY FROM COUNSEL

FIRST POLICYHOLDER WIN ON COVID-19 BUSINESS INTERRUPTION: NORTH CAROLINA COURT SIDES WITH RESTAURANTS Tired of fielding questions about whether your clients’ business interruption coverage includes pandemicrelated closures and losses? And even more tired of handing out bad news each time? Well, there has finally been a court decision going the other way—though in a different state. In North State Deli, LLC, et al. v. Cincinnati Casualty Co., et al., a trial court in North Carolina sided with a group of restaurant owners claiming their “all risk” property insurance policies provided coverage for losses their business sustained due to various government orders mandating business closures and limiting nonessential travel due to the COVID-19 pandemic. The court determined that these losses constituted a direct physical loss under the terms of the policy. This decision appears to be the first policyholder win in such a case (against a backdrop of numerous decisions around the country going the other way) and will likely be appealed.

Regardless, it will no doubt be cited in similar cases as a foothold for pandemic business interruption coverage.

The North State Deli Case and Decision The case’s plaintiffs are 16 restaurant operators from multiple North Carolina counties, all of which purchased “all risk” property insurance policies through Cincinnati Casualty Company. Plaintiffs sought a judicial declaration that the Cincinnati policies provided coverage for business losses sustained due to forced closures following state and local public health orders in the wake of the current pandemic. Specifically, plaintiffs alleged that the loss of business income during the shutdowns constituted direct physical loss under the terms of the policy.

Cincinnati disagreed, arguing that the term “physical” means there must be some physical alteration to the property for the policies to provide coverage.

Ultimately, the court sided with the plaintiff restaurants, ruling that the Cincinnati policies provided coverage for the losses sustained by plaintiffs during mandatory closures. Importantly, the policies did not define the terms “direct,” “physical loss,” or “physical damage.” As a result, the court turned to common dictionaries such as Merriam-Webster, Black’s Law Dictionary, and Random House Unabridged Dictionary to ascertain the meaning of the relevant words and phrases. Based on these common definitions, the court assembled a definition for the phrase “direct physical loss” as including “the inability to 24| DECEMBER | DECEMBER2020 2020| | 24

wisconsin wisconsin INDEPENDENT AGENT INDEPENDENT AGENT

utilize or possess something in the real, material, or bodily world, resulting from a given cause without the intervention of other conditions.” Thus, according to the court, “’direct physical loss’ describes the scenario where business owners and their employees, customers, vendors, suppliers, and others lose the full range of rights and advantages of using or accessing their business property.” At the very least, said the court, the policies were ambiguous, in which case their terms would be construed in favor of coverage. Either way, plaintiffs win.

Now What?

First and foremost, it is important to remember that this decision comes from a trial court in North Carolina.

Therefore, at this point, the court’s ruling is only binding on the parties to the dispute. However, the case will almost certainly be appealed, at which point a North Carolina appeals court could issue a decision with precedential effect around the state and perhaps some persuasive value elsewhere.

More important for you and your clients is the signal this decision sends to insureds and insurers around the country.

The outcome of this case will likely make similarly situated insureds more willing to bring these types of actions, leading to similar decisions in other jurisdictions.

To stay apprised of updates in this ever-changing legal landscape, stay in close contact with legal counsel. Doing so will allow you and your agencies to better understand how court cases like the one described above impact your clients, making you better advocates for them and their businesses.

The IIAW will of course be monitoring legal issues arising from the pandemic, so keep an eye on association updates and this column.

>J osh Johanningmeier IIAW General Counsel

BOUTIQUE. INTENTIONAL. RELATIONSHIPS. It’s the meaningful relationships and investment in innovative solutions that make it easy for agents to do business with us.

Come grow with us: Contact Sales Director Cathy Colón at 920.968.9326 or ccolon@imico.com

VIRTUAL UNIVERSITY

CORONAVIRUS REVISITED - SHOULD THE BUSINESS INCOME POLICY RESPOND? During the first few weeks of the COVID crisis, Virtual University received countless questions concerning COVID-19 (the coronavirus) and the business income policy. As authorities required businesses to limit activities or shut down completely, the fear and reality of the loss of income loomed large.

Insureds called their agents to ask about business income coverage and agents called us. Attorneys began trolling for clients who had suffered income loss due to the forced shut down. The pandemic panic made business income a major topic. It’s still a primary topic of conversation within the insurance industry, the courts and regulatory buildings across the country.

Should the business income policy cover the loss of income resulting from business closure or slow down as a result of the coronavirus?

I’m sorry to tell you up front, but the short and simple answer is, no, the business income policy was not designed to provide coverage for this type of situation. The longer answer is a bit more complicated, even though the ultimate answer is the same – no coverage.

In this short piece explaining why the business income policy was not designed to provide coverage, three business income coverages are reviewed: • The business income coverage itself; • The additional coverage for civil authority; and • Dependent property coverage.

Physical or property damage as understood and applied in the courts requires physical harm generally evidenced by changes in the physical characteristics that require repair.

Consider an invisible virus on any property or even in the property, does the presence of a virus on a surface or in the air change the physical characteristics such that repair is required? Given the everyday application and meaning of those terms, no, the virus does not result in property damage.

So, there is no property damage as required by the form, and without property damage, business income coverage does not respond.

Covered Cause of Loss: Even if the presence of a virus can be “forced” by the courts to be considered property damage; is the mere presence of the virus a covered cause of loss? This is a longer discussion than the other two triggers discussed above; let’s detail this trigger.

Is a Virus a Covered Cause of Loss Is the presence of the virus a covered cause of loss? Of course, whether it’s a covered cause of loss or not matters only if presence of the virus can cause property damage according to the courts.

Courts are beginning to weigh in on this topic.

Business Income

There is a specific exclusion within the policy that may apply in addition to a mandatory exclusionary endorsement. Let’s look at both exclusions.

Let’s begin with the insuring agreement from the business income coverage. The form reads:

Within ISO’s business income policy written on a special cause of loss form, the following is excluded:

We will pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.

l. Discharge, dispersal, seepage, migration, release or escape of “pollutants” unless the discharge, dispersal, seepage, migration, release or escape is itself caused by any of the “specified causes of loss”.

Within this insuring agreement, there are three key coverage triggers to consider, “suspension of…operations,” “direct physical loss or damage” and “covered cause of loss.” Let’s review each trigger.

Suspension of operations. Given the local, state or federal requirements, this condition may apply as the business may be shut down by a regulatory authority. At the height of the pandemic panic all but five states enacted stay-home orders and orders closing restaurants, bars and operations consdiered “non-essential.” The longer-term debate may be the necessity of these actions, but government made it necessary, so, this requirement is met.

Direct physical loss or damage: This was the first question that created a problem for whether coverage exists. Does or can a virus cause physical damage?

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A “pollutant” is defined in the form to mean: “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” A contaminate, particularly a biological “contaminant,” is defined as a contamination of food or environment with microorganisms such as bacteria, VIRUSES, fungi or parasites.

Based on the policy wording and the applicable meaning of “contaminant,” the unendorsed policy excludes coverage for the presence of a virus via the pollution exclusion. But even this isn’t going to stop some attorneys from grasping at straws and any possibility of coverage. On March 16, the first business income suit was filed in Louisiana (Cajun Conti, LLC et al DBA Oceana Grill v.

Certain Underwriters at Lloyd’s (and others including the governor and state)).

But even if the virus is considered property damage AND the pollution exclusion is ignored, how long will the “damage” be

present?

• The surface can be disinfected in one day.

• If not taken care of and disinfected by the owner – according to recent scientific research, the virus can live for only a short time:

• Up to four hours in the air depending on the consistency

(mist vs. droplets); and

• One to three days on surfaces – depending on the

surface Most Business Income policies have a 72-hour “deductible” or waiting period; so unless the waiting period has been reduced by endorsement (CP 15 56), there won’t be qualifying property damage after a maximum of three days for there to be a qualifying loss. But what about recontamination? Every new contamination is a new event and a new waiting period begins.

If the pollution exclusion is ignored, there is a mandatory endorsement attached to ISO property policies that removes all doubts, the CP 01 40. ISO Released the CP 01 40-Exclusion of Loss Due to Virus or Bacteria in 2006 as a mandatory endorsement to specifically exclude loss resulting from a Virus or bacteria.

ISO stated in the initial filing that the presence of viruses was NEVER intended to be covered due to the pollution exclusion, but they anticipated that some would torture the policy. The CP 01 40 was introduced to negate “efforts to expand coverage and to create sources of recovery for such losses, contrary to policy intent.” (ISO wording in the release.)

Business Income Result So, what’s the result? There is no business income coverage.

• There is no property damage – thus there is no coverage.

• If courts disagree about property damage AND ignore the pollution exclusion, what is the period of damage? According to scientist, a maximum of three days without human intervention.

(Remember, there is generally a 72-hour deductible.)

• If CP 01 40 attached, there is no question that there is no coverage.

Ultimately and overall, there is no Business Income Coverage.

Civil Authority Let’s go to the policy and look at the wording in regard to civil authority (slightly abridged): a. Civil Authority In this Additional Coverage, Civil Authority, the described premises are premises to which this Coverage Form applies, as shown in the Declarations.

When a Covered Cause of Loss causes damage to property other than property at the described premises, we will pay for the actual loss of Business Income you sustain…caused by action of civil authority that prohibits access to the described premises, provided that both of the following apply: (1) Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not more than one mile from the damaged property; and (2) The action of civil authority is taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage, or the action is taken to enable a civil authority to have unimpeded access to the damaged property.

Civil Authority Coverage for Business Income will begin 72 hours after the time of the first action of civil authority that prohibits access to the described premises and will apply for a period of up to four consecutive weeks from the date on which such coverage began and will end:

whichever is later.

What are the requirements for there to be coverage? Some look very familiar: • There must be a covered “cause of loss.” The damage, if there is any, is excluded by either the pollution exclusion or the CP 01 40.

• Access to the area must be prohibited by the civil authority. You can still get into the area you just can’t go into the building (maybe).

• The property damage must have occurred within 1 mile of insured’s premises.

• The civil authority must prohibit access due to dangerous physical conditions. Is it the property or the people that might lead to a civil authority decree? This is a biological condition not a physical condition.

• There is a 72-Hour “deductible.”

What is the result of these requirements? There is likely no coverage.

Dependent Property Coverage Before we look at the coverage, let’s first define what qualifies as a dependent property. Dependent properties eligible for coverage in the business income form include: • Buyers (ISO terminology - Recipient Locations); • Suppliers (ISO - Contributing Locations); • Providers (ISO - Manufacturing Locations); and • Drivers (ISO - Leader Locations).

Let’s review the language from one of the four endorsements: A. We will pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to “dependent property” at the premises described in the Schedule caused by or resulting from a Covered Cause of Loss.

Note the common requirements found in this language. There must be direct physical loss or damage and the damage must be from a covered cause of loss. Given the similarities, how does this coverage respond? Applying the same reasoning as that found in the other two sections, there is no coverage.

The Moral of the Story In the business income policy, with or without the CP 01 40, there is no coverage – unless: • Courts ignore the meaning and reality of property damage; • Courts ignore the pollution exclusion (in the absence of the CP 01 40); or • Governmental authorities intervene.

Even if coverage is found – there is generally a 72-hour deductible.

Many studies stated that the virus doesn’t live in the air on surfaces beyond that amount of time.

Here is the final reality, is it the property or the people that is the problem? Is this a biological issue or a property damage issue?

The commercial property policy is not designed to cover biological issues, it is for property issues.

To end this article, given the policy wording and requirements, there is no coverage for a business income loss resulting from the coronavirus. But let me give this final warning – if the insured wants to make a claim, do it and let the carrier decide. However, if the insured is just asking your opinion as to whether coverage exists, you can give it. But don’t advise against filing a claim, simply say you don’t think it’s covered based on policy wording, but that you will still file a claim if the insured wants you to do so.

> Chris Boggs Big “I” Virtual University Executive Director

(1) Four consecutive weeks after the date of that action; or (2) When your Civil Authority Coverage for Business Income ends; wisconsin wisconsin INDEPENDENT AGENT| INDEPENDENT AGENT

| DECEMBER2020 2020| 27 | 27 DECEMBER

News Members in the

ISU INSURANCE AGENCY NETWORK SELECTS IVANS MARKETS TO EXPAND BUSINESS OPPORTUNITIES Tampa, FL (October 1, 2020) - IVANS®, a division of Applied Systems®, and the ISU Insurance Agency Network announced today ISU’s selection of IVANS Markets to support ISU’s proprietary Commercial Lines Placement Advisor™ (ISU CLPA) technology platform.

“The ISU CLPA’s convenience combined with IVANS Markets speed and accuracy of real-time delivery of property and casualty insurance placement transaction information gives ISU Members a Unique Competitive Advantage™ in satisfying the clients need to consistently receive the best value for its premium dollar while maximizing revenue for the ISU Member Agent utilizing ISU’s preferred partner carriers and wholesaler brokers,” according to T J Ryan III, Chief Executive of ISU Group.

“Prior to IVANS Markets, there was no automated way for our agents to search a consolidated list of insurers with appetite for a specific risk in a specific geographic area,” said Dan McCarthy, chief operating officer, ISU Insurance Agency Network. “IVANS Markets will provide an easy-to-use appetite search tool on each user’s desktop, eliminating traditional search practices such as word-of-mouth or printed appetite guides and allowing our agents to quickly find the right markets for their clients’ specific risks.”

IVANS Markets provides an online search tool that enables agents to instantly identify insurer appetite when searching for markets to submit new and renewal business. The application enables agents to reduce dependency on traditional, time-consuming methods of identifying insurer appetite, such as reviewing insurer risk guides, visiting insurer websites or relying on historical agent experience. Leveraging IVANS’ access to markets, agencies can build new business opportunities with appointed insurers and increase visibility into additional prospective insurer and MGA partners based on lines of business and products.

“In today’s digital age, agents and insurers are looking to digital technology to enable greater collaboration, increase efficiencies, and create more value for the distribution channel,” said Brian Wood, vice president of Data Products Group, IVANS Insurance Solutions. “IVANS Markets aligns our agency members with current and new markets, enabling them to increase the value of their books of business through expanding market opportunities with both appointed and prospective insurers.”

About IVANS IVANS, a division of Applied Systems, is the insurance industry’s 28 | DECEMBER 2020 |

wisconsin INDEPENDENT AGENT

exchange connecting insurers, MGAs, agencies, and the insured.

IVANS cloud-based software automates the distribution and servicing of insurance products. For more than 35 years, IVANS innovation and expertise has connected 32,000 independent insurance agencies and 400 insurer and MGA partners to enable millions of people to safeguard and protect what matters most in people’s lives.

About ISU Founded in 1979, The ISU Insurance Agency Network is committed to helping select Independent Agents retain their independence and remain in business for themselves but not by themselves. ISU’s 230 independently owned and operated Agencies employ more than 3500 professionals who produce over $6 billion in premiums representing more than 300 insurance companies nationwide. The exceptionally high quality of ISU Member Agencies and our commitment to excellence in all we do has earned the ISU brand the reputation as the Better Source of Better Business® throughout the insurance industry. ISU Members and their clients benefit from ISU’s Unique Competitive Advantage® – the strengths and resources of a national organization combined with local ownership and independence.

BERKSHIRE HATHAWAY GUARD ADDS ARCHITECTS AND ENGINEERS PROFESSIONAL LIABILITY IN THREE NEW STATES

Wilkes-Barre, PA (October 27, 2020) - Berkshire Hathaway GUARD Insurance Companies recently announced it has expanded the list of states the company offers its Architects and Engineers Professional Liability product to include Colorado, Kansas and Wisconsin. With these three states, the company now offers this line in half the United States.

“Our portfolio of states where we offer Professional Liability lines is expanding as we continue to supply our network of independent agents with additional quality products that allow us to grow together,” said Sy Foguel, Berkshire Hathaway GUARD CEO. “In 2016, we began writing Professional Liability for a limited number of classes in 13 states. We now offer Professional Liability in 33 states and utilize a targeted growth strategy with the goal of offering these products to all available classes nationwide in the near future.”

“Like other professionals who provide a service, architects and engineers are at risk for professional liability exposure. A customer or third-party could allege negligence, which could lead to litigation, putting a firm’s finances and reputation in danger,” explains Lyle Hitt, Chief Insurance Officer. “Our product offers a variety of protections, including Pre-Claims Assistance for Circumstances and Disciplinary Proceedings Reimbursement, along with a variety of other optional add-ons that may be requested.”

Berkshire Hathaway GUARD’s Architects and Engineers Professional Liability product offers limits up to $5 million per claim with deductibles starting at $2,500.

Liability components include professional, environmental, contractors pollution, technology services and products, computer network security, multi-media and advertising, and privacy.

Berkshire Hathaway GUARD Insurance Companies is a property and casualty insurance company writing $2 billion in premium nationwide. Berkshire Hathaway GUARD Insurance Companies maintain a total of eight offices throughout the country. To learn more about Berkshire Hathaway GUARD visit https:/www.guard. com.

Agents interested in applying should visit https://www.guard.com/ apply/.

ACUITY NAMED BEST IN NATION FOR WORK-LIFE BALANCE

Sheboygan, WI (November 4, 2020) - Acuity is ranked #1 in the nation among Glassdoor’s 20 Highest Rated Companies for Work-Life Balance During COVID-19. On Glassdoor, employees voluntarily and anonymously share insights and opinions about their work environments by providing a company review, designed to capture a genuine and authentic evaluation.

“From our true flex-time schedule and unlimited sick leave to support for team members dealing with personal challenges and celebration of joyous live events, Acuity’s work-life integration benefits help people achieve a positive balance between their work and personal lives. We also recognize that in the insurance business, our people often help individuals and families through incredibly stressful situations of their own, so our employeefocused culture helps people work together in true teamwork,” said Ben Salzmann, Acuity President and CEO. “Glassdoor ratings reflect the experience of people who know us best—our employees. It’s a true, transparent reflection of who we are not just as an employer, but how we care for our people during difficult times as we are facing today,” said Joan Ravanelli Miller, General Counsel and Vice President – Human Resources.

This latest honor adds to Acuity’s continued and growing recognition as a great place to work. In 2020 alone, Acuity was named to Forbes’ list of America’s Best-in-State Employers, ranked at #2 in Wisconsin, was honored with a Glassdoor Employees’ Choice Award, and received the ACORD Millennial Women’s Insurance Advancement Award.

Acuity Insurance, headquartered in Sheboygan, Wisconsin, insures over 100,000 businesses, including 300,000 commercial vehicles, and nearly a half million homes and private passenger autos across 28 states. Rated A+ by A.M. Best and S&P, Acuity employs over 1,400 people.

JOIN US, a WI Based Top 100 Agency

Are you or your agency ready for a positive change?

Robertson Ryan has been offering innovation through our unique Agent Owner structure since inception in 1960. Time and time again after an agent or agency joins us they say, “We wish we did this years ago.” Our team recognizes the strength and power behind the agent and insured relationships so we’ve built, and continue to fine-tune, a support network rewarding those affiliated with RRA. Find more at, www.RobertsonRyan.com/AgentOwner ...and let’s connect. Call or email me 414.221.0363 or cillman@robertsonryan.com. I look forward to answering your questions!

Chris Illman, CEO

www.RobertsonRyan.com wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 29

Wow, it can do that?!

Automagic™ With the Automagic release, the Internet of Insurance now automates E&O documentation and provides data you can’t live without. Includes exclusive benefits for Big I members. learn more at: www.internetofinsurance.org

FOOD FOR THOUGHT

to Commercial Insurance that understands the Bar & Tavern Industry At Badger Mutual, we take commercial insurance personally. Visit our website today to learn more about a customized package of protection for your customers.

badgermutual.com

wisconsin INDEPENDENT AGENT

| DECEMBER 2020 | 31

PRSRT STD US POSTAGE PAID MADISON WI PERMIT NO. 549

WHAT THE HAIL JUST HAPPENED? NO WORRIES, CALL US. HOMEOWNERS INSURANCE THAT’S DESIGNED TO BE WORRY FREE A home is one of the most valuable assets. Whether it is a current homeowner, someone looking to own, or someone renting a home, financial protection is needed for the important things in life.

A homeowners policy from IMT Insurance can help your policyholders Be Worry Free.

Learn how you can represent IMT Insurance at imtins.com/contact.

AUTO | HOME | BUSINESS