June 2014 Wisconsin Independent Agent Magazine

wisconsin

INDEPENDENT AGENT JUNE 2014

BE A CONDUIT FOR ACTION SEE PAGE 5

People who run a business know. The most valuable things

are also the hardest to get.

Your customer’s business didn’t grow overnight. It came from years of hard work, confidence in what they could do, and making smart decisions.

That’s why an insurance policy from West Bend makes sense. It protects these valuable and hard-earned businesses so your customers can focus on doing what they do best.

And as an Official Supplier of The Silver Lining, it’s backed by your knowledge and experience.

West Bend. Insurance your customers buy when they can’t afford anything less.

wisconsin

INDEPENDENT AGENT JUNE 2014 Eric Schwartz, Editor

Open Door Policy Opportunity For Political Giving . . . . . . . . . . . . . . . . . . . . . . . . . 5 Commentary From Counsel To Cluster Or Not To Cluster . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Government Affairs Legislature + High Turnover = Busy Election Season . . . . . . . 11 Growth By Association Convention Wrap Up & Award Winners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Independent Agents Running For The 58th Assembly District . . . . . . . . . . . . . . 16

On The Cover…

It is crucial that we donate to the Insuring Wisconsin Growth Fund conduit. Political giving gives our Association the access to

Virtual University When Autos Collide…How Many Deductibles . . . . . . . . . . . . . . 19

educate legislators about what’s

Marketing Minute Is Print Dead? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

more about the importance of

Errors & Omissions E&O Tips For Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

important to our industry. For

political giving, see page 5.

Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2013-2014 Executive Committee

2013-2014 Committee Chairs

President....................................................... Dave Dunker P.O. Box 443, Brookfield, WI 53008-0443

Agency Operations....................................... Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406

President-elect ........................................... John Wickhem P.O. Box 1500, Janesville, WI 53547-1500

Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949

Secretary-Treasurer ......................................... Steve Leitch P.O. Box 85, River Falls, WI 54022

Employee Benefits............................................. Tim Bever 555 Main St. #320, Racine, WI 53403

Chairman of the Board ..................................... Mike Froh P.O. Box 1320, Sheboygan, WI 53082-1320

Finance & Compensation .............................. Steve Leitch P.O. Box 85, River Falls, WI 54022

State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403

Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

2013-2014 Board of Directors

Industry Relations ............................................. Tom Sitter P.O. Box 2424, Oshkosh, WI 54903-2424

Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Jason Bott 330 East Kilbourn Avenue, Milwaukee, WI 53202 Thomas Holter P.O. Box 938, Beloit, WI 53512-0938 Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Bruce Kommers P.O. Box 66, Antigo, WI 54409-0066 Brian McClone 505 North Westfield Street, Oshkosh, WI 54902 Jeff Rasmussen 525 Junction Road, Madison, WI 53717 Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Matthew Weimer 100 North Corporate Drive #100, Brookfield, WI 53045

WISCONSIN INDEPENDENT AGENT

Membership Development ................................. Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610 Smaller Agencies .................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Technical ......................................................Andy Burkart P.O. Box 1320, Sheboygan, WI 53081-1320 Young Agents ............................................ Janelle Higgins 6200 Mineral Point Road, Madison, WI 53705-4504

> OUR ADVERTISERS AAA ................................................................ 30 ACUITY Insurance ............................................ 31 Agency For Sale.............................................. 29 Amerisafe........................................................18 Applied Underwriters ........................Back Cover Arlington/Roe & Co.......................................... 14 Badger Mutual ................................................ 29 Burns & Wilcox ................................................10 Capital Remediation ....................................... 24 EMC Insurance................................................ 29 Guard Insurance ............................................. 26 IIAW Continuing Education ............................. 27 Integrity Insurance .......................................... 9 Northern Underwriting Managers .................. 25 Partners Mutual ...............................................11 Pekin Insurance................................................ 7 Project Cap ...................................................... 8 Robertson Ryan.............................................. 24 The IMT Group ................................................. 21 West Bend ........................................................ 2 Western National Insurance ............................. 4 Wilson Mutual ................................................. 20 JUNE 2014 | 3

4 | JUNE 2014

WISCONSIN INDEPENDENT AGENT

OPEN DOOR POLICY

BE A CONDUIT FOR ACTION

In recent months, the IIA of Wisconsin has been on the frontlines of many important legislative issues, including the licensing of exchange navigators, workers’ compensation medical fee schedules and risk retention groups.

There have been legislative victories and a few challenges along the way but this Association has been at the table, a key player in the discussions leading up to votes in the Legislature.

This visibility is due in great part to your commitment to political giving, especially to the Insuring Wisconsin Growth Fund conduit. We are very close to reaching our goal of raising $40,000 in conduit funds by the November elections. This is a big, positive step – a great start – and we are appreciative of your efforts. We do not take the donations for granted; we know you worked hard for it.

process. And that means political giving.

We are competing against powerful and influential groups (i.e., trial attorneys) that do not share the insurance industry’s interests. Their pockets are deep because their members understand the importance of having a voice in the Capitol.

That’s what this is all about – having a loud voice in the state house that’s advocating for the independent agency system.

We have a real opportunity coming up in November. There’s going to be a shake up at the Capitol in the form of many new legislators.

Nearly 22 percent of the Legislature is leaving their jobs for a variety of reasons. All 99 seats in the Assembly are being decided at the polls.

In his Government Affairs article this month, our lead lobbyist Misha Lee talks specifically to the loss of incumbents and the influx of new blood:

There have been legislative victories and a few challenges along the way but this Association has been at the table, a key player in the discussions leading up to votes in the Legislature. This visibility is due in great part to your commitment to political giving.

Hundreds of bills are proposed each legislative session and many of them will impact your business. There will be a lot of new faces in the Legislature and none of them can be experts or knowledgeable on every subject or industry.

We must build on this success and keep it going as we move into 2015 and beyond.

Last year, Skip Hansen wrote a concise article for this magazine that emphasized the importance of political giving:

The political process has evolved to the point today where it’s all about the money. Our conduit will provide financial contributions to legislators of both political parties who support our industry. A financial contribution to a legislator’s election committee will get us access and the legislator’s ear.

He’s absolutely right. Skip’s had a long, prosperous career in insurance and he knows that we all need to get involved to cultivate the next generation of independent agents. In order to be heard by the decision makers – the legislators – we need to be involved in the political WISCONSIN INDEPENDENT AGENT

That’s where you come in. Your expertise in the industry can educate these new legislators about what is actually going on. Getting access starts with a donation to the conduit. The donation opens the door for the IIAW to be heard. It’s that simple.

For more information about how the conduit works and to donate, go to our homepage (iiaw.com) and click Donate. You can also call me or send me an e-mail at matt@iiaw. com.

Please, strongly consider donating to the Insuring Wisconsin Growth Fund conduit.

It’s an investment in your industry’s future.

> Matt Banaszynski is the Executive Vice President of the Independent Insurance Agents of Wisconsin.

Contact him at matt@ iiaw.com.

JUNE 2014 | 5

COMMENTARY FROM COUNSEL

TO CLUSTER OR NOT TO CLUSTER

Rising production requirements imposed by insurance carriers, along with a desire to achieve economies of scale, have led to an increase in discussions of “clustering” (no, that’s not really a verb) agencies. At its core, an agency cluster (“Cluster”) is a grouping of two or more individual agencies or brokerages for the purpose of consolidating particular operating and/or marketing functions. A Cluster may allow an individual agency to meet otherwise unattainable minimum volume requirements and, at the same time, reduce marketing or administrative expenses.

Like any business strategy, Clusters are not all upside. Although a Cluster can provide benefits, the potential risks and pitfalls must also be considered. Initial start up expenses,

administrative costs. It is little more than an expense sharing arrangement around fixed costs such as office space, secretarial services, telephones, internet access, receptionists,

At its core, an agency cluster is a grouping of two or more individual agencies or brokerages for the purpose of consolidating particular operating and/or marketing functions.

loss of control and other consequences associated with a Cluster may create new problems for an agency. This column identifies a number of considerations when evaluating whether membership in a Cluster is appropriate.

and the like. Members maintain their identities and independence. No brokerage contracts are shared and all billing is performed under the individual brokerage.

Motivations First, you must identify reasons for joining a Cluster.

Is the agency hoping to reduce administrative costs, gain access to markets, increase volume, broaden its expertise, expand its advertising, identify perpetuation options and/or merely survive? Once objectives are established, they can be tied to the appropriate type of Cluster arrangement.

A so-called “informal” or “independent” Cluster can simply be used to reduce

6 | JUNE 2014

A “complete” Cluster is similar to a formal Cluster discussed above, with additional agreements, which results in an arrangement that resembles a merger of its member agencies. The agreements cover typical business merger and management concerns, such as entry to and exit from the Cluster, perpetuation provisions and allocation of expenses and income.

Contractual Considerations Regardless of the formality of the Cluster, consider the following items that may be addressed in agreements by and among the members:

Type of Cluster Depending on the motivations of an agency, as discussed above, the formality of the Cluster can vary greatly.

Below are a few variations, none of which are fixed and a Cluster may find itself somewhere along this spectrum.

the Cluster. The management company may enter into the contracts and volume commitments with insurance carriers on behalf of the Cluster. Expenses and income related to the Cluster and management company are allocated among the members according to a predetermined formula.

Members remain able to maintain nonCluster contracts. These formal Clusters require formal agreements addressing expenses, management services, expirations and walk-in business.

“Formal” or “intermediate” Clusters preserve each agency’s identity and independence.

However, a management company is established to handle the processing, underwriting and executive decisions of

DGoverning the Cluster. How will the Cluster be run? Will each member participate in the daily operations? How will the Cluster determine its contracting priorities? If there is a management company, then who will own and run the company? Will the management of such company be elected?

How often? Is there separate compensation owed to the management company or its operators?

WISCONSIN INDEPENDENT AGENT

COMMENTARY FROM COUNSEL DVoting. If members have voting rights, then how will votes be weighted? Will there be per capita voting? Will the number of votes be dependent on revenue or some other metric?

DOwnership of Shares. Will transfer of shares of the management company be restricted to member brokerages and their principals? Can the shares be transferred upon death?

DCommissions. How will commissions be shared?

of new members? Is there a set criteria for admittance?

Although a Cluster can provide benefits, the potential risks and pitfalls must also be considered. Initial start up expenses, loss of control and other consequences associated with a Cluster may create new problems for an agency.

DExpenses. The allocation of expenses should be addressed. Will expenses be shared per capita? Or will expenses be shared proportionate to revenue or income?

DResignations, Disability or Retirement.

What rights does a resigning, retiring or disabled member, or principal thereof, have upon such an event?

DBuy Out Arrangements. Does a member have put rights upon retirement, resignation, removal or termination? Are there call rights or put rights in place for the Cluster or individual members?

DNoncompetition and Non-Solicitation.

Will members be subject to restrictions on competition or solicitation for a period of time following involvement with the Cluster?

DNew Members. How will new members be admitted? Is there a limit on the number

foregoing hits many of the most common concerns. If it is not obvious this far into the column, a Cluster is not something to be

The unique circumstances of every business and potential Cluster necessarily dictate that no list of issues is ever exhaustive, but the

entered into lightly or without serious analysis of the objectives you hope to attain.

Consultation with all stakeholders, including future generations of potential agency owners in the case of family agencies, > Josh Johanningmeier is the IIAW’s General as well as your Counsel. Call the Legal accounting and legal Services Hotline at (877) advisors, is a must.

236-1669.

Since 1921, Pekin Insurance® has committed to go beyond.

Join our network of independent insurance professionals and discover how easy it is to do business with us!

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AUTO • HOME • BUSINESS • LIFE • HEALTH WISCONSIN INDEPENDENT AGENT

JUNE 2014 | 7

Consumers shop online, then buy from a local agent. The TrustedChoice.com portal explains the freedom of choice uniquely offered by independent insurance agents.

WISCONSIN INDEPENDENT AGENT

JUNE 2014 | 9

If you cannot place all of your clients’ personal insurance needs, they will find someone who can.

When it comes to personal insurance, every part matters.

Because when one piece goes missing, the entire account could come undone. At Burns & Wilcox, we can insure individual portions of their coverage or the whole account.

So you do not have to turn away any business. We have the expertise, resources and experience that can only come from being the leader in wholesale personal insurance. That is why no one has you covered like Burns & Wilcox.

Milwaukee, Wisconsin | 262.347.0266 | toll free 800.544.5700 fax 262.347.0440 | milwaukee.burnsandwilcox.com Minneapolis, Minnesota | 612.564.1880 | toll free 800.328.1693 fax 612.564.1881 | minneapolis.burnsandwilcox.com Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services

10 | JUNE 2014

WISCONSIN INDEPENDENT AGENT

GOVERNMENT AFFAIRS

LEGISLATURE + HIGH TURNOVER = BUSY ELECTION SEASON In Wisconsin, we are all too familiar with political elections, especially lately. We’ve gotten used to the norm of being bombarded with election season mailers, phone calls for financial support, and campaign radio and television ads. For better or worse, the seemingly endless political campaigns are a reality of our functioning democracy.

But the past several years in Wisconsin have been a political anomaly considering the high frequency of elections we’ve had in such a short amount of time. Wisconsinites undoubtedly are still feeling election fatigue and could use a breather. Unfortunately, this year brings with it another important and busy election season.

and then hang it up. Some will tell you it’s because of the overly partisan environment in politics today, that the job has become more personal and edgier. Others will tell you they’re leaving because they accomplished what they set out to do and never intended the gig to be a long-term job.

Most political observers do not expect significant changes in party control of the state Legislature. Republicans presently have a majority of members in both houses and that is unlikely to change. However,

Whatever the reasons, one thing is clear: the turnover rate we’re seeing today among incumbent legislators makes it that much more critical for your industry to have a strong presence and voice with the decision makers in Madison. Hundreds of bills are proposed each legislative session and many of them will impact your business. There will be a lot of new faces in the Legislature and none of them can be experts or knowledgeable on every subject or industry. In fact, most of them will spend the better part of their first term locating good staff, learning the basics of the legislative process, and understanding how to govern.

And some will choose not to return for a second term.

This election cycle is unique due to the large number of incumbents who have announced that they will not be returning next year. in January 2015, we should be prepared to see a large number of new faces at the state Capitol when a new Legislature is sworn in for the next two years. Both the Senate and Assembly concluded their general business floor periods for the 2013-14 session. Many of the 132 lawmakers have returned to their home districts and are in full swing for their re-election campaigns. All 99 seats of the Assembly and 17 of the 33 Senate seats are up for election in November. And let’s not forget about the other statewide elections for Governor, Lieutenant Governor, Attorney General, Secretary of State, and State Treasurer.

What is so unique about this election cycle is the unusually large number of incumbents who have announced that they will not be returning next year. To date, seven senators (three Democrats and four Republicans) with a combined total of 168 years of legislative experience and 22 state representatives (15 Republicans and seven Democrats) have announced that they will not seek re-election in 2014. That’s a lot of valuable, institutional knowledge and experience that Wisconsin is losing from its legislative branch. It’s a staggering exit of sitting lawmakers and the highest turnover we’ve seen in many decades.

According to the National Conference of State Legislatures, the trend of legislative turnover appears to be lessening nationally. However, here in Wisconsin, legislative turnover appears to be higher than normal. By January 2015, at least 107 lawmakers will have left their posts since the 2010 elections, a number that is higher than any similar period since the 1970s based on data from the Wisconsin Legislative Reference Bureau. > Misha Lee is Owner/ Founder of Lee Government Relations, LLC and lobbyist for IIAW. Follow Lee Government Relations on Twitter @mishavlee.

My goal over the next several months will be to travel the state, in part on your behalf, and get acquainted with as many of the candidates running for legislative office. So, come January 2015, you can be rest assured that your industry will have that much needed presence and voice at the state Capitol to help protect your interests.

the We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-in-hand to help our agencies grow profitably.

Our agents set us apart.

For information about becoming a Partners Mutual Insurance Agent please contact Lyn Schumann at 262.432.3430 or Schumann.Lyn@PartnersMutual.com

Like in any line of work involving public service where hours are long and pay is low, legislators come and go and there are varied reasons as to why they choose to serve

WISCONSIN INDEPENDENT AGENT

JUNE 2014 | 11

GROWTH BY ASSOCIATION 2 0 1 4 I I AW A N N U A L C O N V E N T I O N Thank you to all the independent agents, company representatives, speakers, exhibitors and guests who made the 115th edition of the annual convention a winner at the Madison Marriott West.

On Wednesday morning, after the Auto-Tech Open Forum, the convention kicked into

Johnson Insurance (Government Affairs Agency Leader of the Year); and Kim Dandrea (Committee Chair of the Year).

Association President Dave Dunker received the President’s Award for his great work over the past year. State Senator Frank Lasee (R-DePere) was presented with the Wisconsin

high gear with Rob Hartman (McKinsey & Co.) and Bob Rusbuldt (IIABA CEO) talking about the future of the independent agency channel. John Schlifske (Northwestern Mutual CEO) followed as the keynote speaker.

The exhibit hall showcased 85 fantastic vendors. The IMT Group and the Emerging Leaders Committee hosted a virtual golf exhibit in the hall. IMT sponsored cash payouts for a hole-in-one and shots closest to the hole. No one aced a hole but Bob Sutton took home the top prize for placing a shot 2 feet six inches from the cup.

In addition to the popular Auto/Tech Open Forum, CE sessions were led by members of the Auto/Tech Committee, John Bristol and David Grunke of WPS. There was a change for this year’s opening night party. Instead of being hosted by the Marriott, the party was moved across the street to Sprecher’s Restaurant & Pub. The end result was a total success. Entertainer Pat McCurdy had the party rocking and party guests dancing (some of them on stage) with his hilarious songs and knack for audience participation. Door prizes were also raffled from the stage. Thanks to all the great companies that donated gifts for the raffle.

At Thursday’s awards breakfast, IIAW President Dave Dunker presented annual awards to: Mike Ansay (Agent of the Year); Marc Petersen (Emerging Leader of the Year); Erin Pinney (Industry Representative of the Year); Julie Allord (Employee Benefits Agent of the Year);

Legislator of the Year award. The award winners are pictured on these pages.

SECURA’s John Bykowski and retired Capitol CEO Dave Pauly both received the first-ever E.J. Tapping Lifetime Achievement Award in recognition of their incredible careers and passion for the insurance industry.

Before the final CE sessions of the convention, marketing expert Kelly McDonald presented her engaging presentation, How To Market To People Not Like You. The 2014-15 Board of Directors includes: Mike Walston, Kewaunee; Brian McClone, Oshkosh; Lise Meyer Kobussen, Sauk City; Jerry Couri, Waukesha; Darrel Zaleski, Eau Claire; Mark Behrens, Racine; Jason Bott, Milwaukee; Jeff Rasmussen, Madison; and Mike Ansay, Port Washington.

The 2014-15 Executive Committee is: Dave Dunker, Chairman of the Board; John Wickhem, President; Steve Leitch, President-elect; Matt Weimer, Secretary-Treasurer; and Linda Steiner, State National Director.

The 116th annual state convention is scheduled for May 6 and 7, 2015, at the Kalahari Resort in Wisconsin Dells. Thank you again to everyone who attended.

For more photos of the convention, please go to IIAW’s Facebook page at www.facebook. com/IIAofWI.

John Bykowski (at podium) accepts the E.J. Tapping Lifetime Achievement Award at the Annual Awards Breakfast on Thursday, May 8. Association President Dave Dunker and IIAW Executive VP Matt Banaszynski presented the award.

Kim Dandrea received the Committee Chair of the Year Award for her work on the Agency Operations Committee.

__ Mike Ansay (left) is the IIAW’s 2014 Agent of the Year. He accepted the award IIAW President Dave Dunker. _ Sen. Frank Lasee (R-DePere) received the Legislator of the Year Award.

12 | JUNE 2014

WISCONSIN INDEPENDENT AGENT

Julie Allord received the Employee Benefit Agent of the Year Award.

Chairman of the Board Mike Froh (right) presents the President’s Award to Dave Dunker.

Dave Pauly (right) received the E.J. Tapping Lifetime Achievement Award from IIAW President Dave Dunker.

Marc Petersen (left) is the recipient of the Emerging Leader of the Year Award.

WISCONSIN INDEPENDENT AGENT

Erin Pinney is the recipient of the 2014 Industry Representative of the Year Award.

Mark Behrens (left) accepted the Government Affairs Agency Leader of the Year Award on behalf of Johnson Insurance Services.

JUNE 2014 | 13

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Program Specialist Mary Morrison Phone: (608) 256-4429 mary@iiaw.com

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Program Specialist Mary Morrison Phone: (608) 256-4429 mary@iiaw.com

INDEPENDENT AGENTS RUNNING FOR THE 58TH ASSEMBLY DISTRICT

CITIZEN LEGISLATOR

Bob Gannon seeks the open Assembly seat

Bob Gannon’s political aspirations were still untapped when he was growing up in West Bend but his political ideology was taking shape everyday in his working class home.

“My Dad was a blue collar guy,” said Bob, a managing partner at Richards Insurance. “He was machine operator in a factory for 30 plus years and served as the union steward. He

‘‘

politics. He learned from his father that there is no substitute for hard work, no matter what the work entails.

“I was a garbage collector before I answered an ad for an insurance agency looking for newbies,” he said. “I went from the garbage truck to the insurance industry. That was 32 years ago.”

I want to work with the governor and other legislators to keep chiseling away at high tax rates and burdensome government regulations. With an infusion of new blood in

Bob sees himself as a bona fide citizen legislator who will continue working with clients at Richards Insurance. If he is elected, some of his duties will be delegated so he can focus on working for his constituents in the 58th District. If he is given the privilege to go to Madison, Bob wants to be part of what the Republican leadership has started over the past few years.

the Assembly we can keep it going. - Bob Gannon

always had a second job. He sold real estate and owned and operated a tavern.”

His mother also had a big influence on him.

“My Mom ran the house with an iron hand and a wooden spoon,” Bob said. “She was a Goldwater-Reagan Republican. My Dad was the Democrat. As usual, Mom won that

After 22 years as owner of Richards Insurance in West Bend, Bob wants to take his professional and personal experiences into the political arena for the first time.

Bob is running for the 58th Assembly District seat currently held by Rep. Pat Strachota.

Strachota, the Assembly’s Majority Leader this session, is stepping down after 10 years in office.

The 58th District covers a large section of Washington County, which includes the city of West Bend and the villages of Richfield and Slinger. It is a solid Republican stronghold.

“This seat does not come open very often and the race will be competitive,” said Bob. “Part of the goal is not just to win, Bob Gannon, managing partner of Richards Insurance, is running for the but to win big. That gives you open seat in the 58th Assembly District. Kris Gannon, Bob’s wife, is the more credibility in Madison campaign’s treasurer. battle. They had 10 kids and nine them are and deters future competition.” conservative Republicans today. We still invite the lone liberal to family events but we no This election is important. In addition to longer discuss politics with him. There’s no Strachota’s departure, 17 other Assembly seats need to ruin a pleasant family get together are open. There will be 18 new voices in the arguing the finer points of the Affordable Care Capitol and all 99 seats are up for grabs in Act.” 2014.

His upbringing taught him about discipline, self-reliance, the importance of a sense of humor, and that he shared his mother’s

16 | JUNE 2014

and Czaja are legislators who are also licensed insurance agents. “Their political success influenced my decision to get involved.

I think there should be more industry representation in Madison.”

“Governor Walker has done great work moving this state forward,” he said. He cites ACT 10, Conceal/Carry legislation, and a budget surplus as major accomplishments.

“I want to work with the governor and other legislators to keep chiseling away at high tax rates and burdensome government regulations. With an infusion of new blood in the Assembly we can keep it going.”

Job creation, attracting new business to Wisconsin, and keeping spending in check are also important pieces of his campaign.

“I am thrilled with the level of support and encouragement that I have received so far,” he said. “A common feeling is that having a very experienced small business owner represent us in Madison will lead to some fresh thinking.”

BOB GANNON For more information, contact Bob at (262) 334-2500, (262) 689-8545, or bgannon@ richardsinsurance.com. His campaign e-mail is gannonforassembly@gmail.com.

The Independent Insurance Agents of Wisconsin supports Bob as he makes his bid to get to Madison. To support his campaign, contact Matt Banaszynski at matt@iiaw.com, or call 608.256.4429.

“I want to follow in the footsteps of Reps.

John Nygren and Mary Czaja,” said Bob, a self-described political junkie. Both Nygren WISCONSIN INDEPENDENT AGENT

INDEPENDENT AGENTS RUNNING FOR THE 58TH ASSEMBLY DISTRICT

ROLE MODEL

Sandy Voss aspires to succeed Rep. Pat Strachota Sandy Voss sees her candidacy for the open 58th District Assembly seat as an opportunity.

“I want to set a good example for my children, especially my girls,” said Sandy, a resident of Richfield, Wisconsin for the past 11 years.

Richfield is in southern Washington County, about seven miles northwest of Germantown.

Washington County makes up the bulk of the district. “I want them to see first-hand that women can be involved in business and politics. I think it’s important to have a conservative female in Madison.”

Sandy and her husband, Andy, have five children ranging in age from six to 12: Blake, Connor, Brooke, Savanna and Lauren. Her decision to run was incumbent on their support. After discussing it with the entire family her answer was clear.

“Everyone was supportive and Blake, our oldest, was really interested,” she said. “I’m running for them and the next generation.”

Sandy’s aspirations of being a role model have already taken root.

She’s currently an elected Trustee on the Richfield Village Board and a member of the village’s Board of Review. She’s held both positions since 2011. Sandy also spent three years on the Park Commission.

On the business front, she and her husband own Voss Insurance Group, an independent agency in Hubertus. They have owned the

SANDY VOSS

For more information, contact Sandy at (414) 840-5768 or Sandy@VossForAssembly.com.

She’s also connected online at vossforassembly. com, Facebook and Twitter. Just search for Voss For Assembly.

The Independent Insurance Agents of Wisconsin supports Sandy as she makes her bid to get to Madison. To support her campaign, contact Matt Banaszynski at matt@iiaw.com, or call 608.256.4429.

The primary is August 12. The general election is Tuesday, November 4.

WISCONSIN INDEPENDENT AGENT

business since 2008. She is proud of her vocation and happy to be part of it but she did not intend to get into insurance.

“It was a fluke,” Sandy said laughing. “I took a part-time job in high school at an insurance agency and now it’s been 25 years. I didn’t mean to do it but I just fell in love with it.”

Washington County Manager.

“I admire Joshua’s passion for politics and his ability to think outside the box.”

Sandy wants to bring that sensibility to the Capitol along with her conservative values.

“Like the current administration led by

I want to set a good example for my children, especially my girls. I want them to see first-hand that women can be involved in business and politics. - Sandy Voss With the experiences of public service and business success in hand, Sandy feels that she would be an ideal candidate to represent the 58th District.

“I’ve been accountable for responsible budgets, know the challenges that communities face, and understand customer service,” said Sandy. “Whether it’s a client coming into our agency or a constituent looking for answers, the number one priority for me is to hear their concerns, talk to them and listen. It’s important to reach out to constituents and have an open door policy.

It’s important for people to know you are there.”

‘‘

Governor Walker, I am pro-business and want to create jobs and strengthen the economy,” she said. “We need to equip workers with the skills they need to find employment.

Wisconsin is facing a workforce skills gap that needs to be closed. That’s why I want to take my experiences to the state level.”

Sandy cites two people as inspirations for her drive to get into politics: Joshua Schoemann and Rep. Pat Strachota, the current 58th District Assemblywoman and Majority Leader who is stepping down in November for personal reasons.

“I respect what Representative Strachota has accomplished over the past 10 years,” said Sandy. “Her focus on family values, turning the budget deficit into a surplus and working as a taxpayer advocate should be applauded. I hope to continue what Pat has accomplished.”

As a board trustee, Sandy worked with Joshua Schoemann, the Village of Richfield Administrator. He’s now the

Sandy Voss co-owns Voss Insurance Group with her husband, Andy Voss. She is running for the open seat in the 58th Assembly District.

JUNE 2014 | 17

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WHEN OWNED AUTOS COLLIDE…

HOW MANY DEDUCTIBLES? Our Insured backed into his wife’s car with his pickup. Both vehicles are insured under his personal auto policy, each with a $1,000 deductible.

The insurance company is telling us that one deductible ($1,000) will apply. We have reviewed the auto policy language and it appears that it may waive the deductible for collision if it is with another vehicle insured by the same company. The adjuster is telling us that the collision deductible waiver only applies for a third party insured with them, not an insured on the same policy with them. What do you think?

The claim is $800 and less than the deductible.”

In the policy you attached to your “Ask an Expert” question, the language seems clear to us that there is one deductible for a comprehensive (other than collision) loss and no deductible for a collision loss.

covered auto or a non-owned auto or its impact with another vehicle or object. No deductible will apply if the collision is with another auto insured by an ABC insurance company.

First, under “Deductible,” the policy says:

The last sentence above is unambiguous.

If both autos are insured by an ABC insurance company, there is no deductible for collision claims. Since both of your autos are insured by ABC, there is no deductible. If ABC intended to waive the deductible only if the other auto was written on another policy, they could easily have expressed that intent in clearer policy language.

says about collision deductibles — In the event of a collision with another vehicle insured by: a. An ABC insurance company, or

Unless stated otherwise, the applicable deductible shown in the Declarations shall be applied to each accidental loss covered under this Part of the policy. If loss to more than one of your covered autos or a non-owned auto results from the same loss, only the highest applicable deductible will apply.

So, if two autos are declared on the policy and they’re both damaged by, say, a hailstorm, there is one deductible. In this case there are not two deductibles. It would appear that the same single deductible would apply if those autos collided with each other. However, the lead-in language above says, “Unless stated otherwise” and the policy goes on to say: “Collision” means the upset of your

Ambiguity is usually decided in favor of the policyholder who did not draft the insurance contract. In this claim, I do not even see a case for ambiguity. The meaning is clear. If what the adjuster says is really ABC’s intent then, again, the contract needs to be rewritten to more clearly express that.

b. Another ABC group company, no deductible will apply. This does not include a vehicle described as your covered auto or a non-owned auto.

My policy clearly expresses the intent that the ABC adjuster says is the intent of YOUR policy. However, the language in your policy does not support this intent, whereas it clearly does in my policy.

What the adjuster says would be true under my policy, but not yours.

Cut the check and update the policy.

My ABC personal auto policy is worded differently than yours. This is what mine

> Bill Wilson is director of the Virtual University of the Independent Insurance Agents & Brokers of America.

The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent.com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.

WISCONSIN INDEPENDENT AGENT

JUNE 2014 | 19

MARKETING MINUTE

IS PRINT DEAD? Most articles that cover marketing tend to focus on electronic versus traditional print and direct mail options. My wife, Karen, certainly enjoys reading electronic books more than paper books.

We’re all buried in the amount of emails we receive daily — and most of them are marketing messages.

Using digital marketing — whether by creating email campaigns or participating on social platforms — to market your products and services makes sense. It’s relatively inexpensive and has the potential to put you in front of a large number of prospects that you might not otherwise connect with.

But, to paraphrase Mark Twain — the reports of the death of print may be greatly exaggerated.

In fact, I am starting to see indications that traditional direct mail may have a better

20 | JUNE 2014

It seems that most articles about digital marketing proclaim the death of print.

response rate — when used appropriately — than the much talked about digital marketing channels.

This view is supported by a recent survey by the Direct Marketing Association. They found that although direct mail response rates have decreased from 4.37% in 2003 to an average

response rate of 3.40% today, these rates remain well above those for digital channels and 10 to 30 times more effective than email.

Here are two ideas on how you can incorporate print into your overall marketing strategy: Personalize letters: People are receiving less snail mail than ever. Your personalized letter will stand out. This may be especially true for younger consumers — everyone assumes they

only want digital communications.

Send thank you notes: I recently received, in the mail, a note card from a participant in one of my presentations thanking me for the information that I shared. It made a much different impression than receiving the same thanks as an email.

That’s not to say that digital marketing is not valuable. It should be used by insurance agencies. Taking a balanced approach to your marketing activities tends to provide a better return on your investment in the long run.

These findings show that in spite of the growth of smartphones and the constant attention to reaching the mobile consumer through > Steve Anderson was digital channels, there recently named as one of the top 150 LinkedIn should still be a place Top Influencers. He has in your marketing plan appeared in virtually for reaching customers every insurance trade and prospects the old- publication. He knows technology. Go to fashioned way. steveanderson.com.

WISCONSIN INDEPENDENT AGENT

FROM THE ARCHIVES

As we gear up for the Sales and Leadership Conference in July, let’s go all the way back to October 17, 2009, when our Emerging Leaders were called Young Agents. They threw a tailgate party on Regent Street leading up to the Wisconsin-Iowa football game and they had good time on a beautiful fall day. Here, a group from the Sutton Agency show that Badgers and Hawkeyes can get along. Iowa,

then the 11th ranked team in the nation, beat the Badgers 20-10 at Camp Randall. The quarterbacks in this game went on to success after college: Iowa QB Ricky Stanzi is now a Jacksonville Jaguar; Scott Tolzien is a backup for the Green Bay Packers. Some kid named Montee Ball rushed for 21 yards.

totally

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JUNE 2014 | 21

ERRORS & OMISSIONS

E&O TIPS FOR AGENTS

Errors and omissions coverage provides protection to you in case a mistake is made that costs your clients. Much has been written about E&O, especially about how to prevent E&O claims. Here are six more ways to stay clear of E&O exposures.

ARE YOU DOING THE NECESSARY FOLLOW UP? There is no doubt that life at the agency side of the business is hectic and there are no signs that it will be slowing down any time soon. It is very easy to have an element of “trust” on many of the issues that producers and CSRs deal with on a daily basis.

One of those areas involves “trusting” that the application that you sent has been received. With standard lines business, this is probably more easily handled via the use of technology. You are able to secure some type of confirmation that the application forwarded has been received.

What about the nonstandard lines business?

Take for example, submissions to your E&S wholesaler or a residual market of your choosing. You complete the application and forward it on. Are you “trusting” that it was received? A best practice is to “trust but verify”. This would involve contacting the wholesaler or the residual market to verify that they have received the application.

approached, when the agency followed up, the flood program indicated that they had no record of receiving the app. Time was now working against the agency. Another situation revealed that the flood program had received the application and provided a proposal. The agency went to bind the account only to find out that the flood program was awaiting an elevation certificate before they could bind the coverage.

It is highly recommended that the agency have a procedure that requires a follow up by the staff with the applicable market to verify receipt and to inquire as to any other key items/issues that need to be handled if the binding of coverage is required. Taking a few minutes today to handle this could save you some major E&O headaches later.

By adding a “Personal Injury Endorsement”, a homeowners is probably increasing their chances of having a claim covered, for now anyway. But it is important that agents read and review (and encourage their customers to do the same), the coverage grant and exclusions pertaining to this endorsement. It is possible that some, or all, of the following activities would be excluded: D An insured with knowledge that the act would violate the rights of another and would inflict “personal knowledge that the act would violate the rights of another and would inflict “personal injury”; D With knowledge of falsity; D Criminal act;

DOES YOUR HOMEOWNERS POLICY COVER SOCIAL MEDIA?

D Sustained by a person as a result of an offense directly or indirectly related to the employment of this person by an insured.

There is a good chance that most of an agent’s personal lines customers present some form of social media exposure. If a claim were to develop, to what degree does the

To the extent that coverage applies, there is the possibility that the parents would be afforded defense and coverage if the

Since documentation really is one of the most fundamental and important aspects of a quality E&O loss prevention program, to ensure consistency, the agency standards should be actually documented in writing for all employees to know, understand and honor.

Obviously, you want to note the date and person you spoke with. It is probably also recommended that the agency person inquire as to whether any additional information is needed to secure a proposal or to bind coverage. Possibly, the carrier has a specific app that is needed or some other requirement involving premium payment, affidavits, etc.

After Super Storm Sandy struck, there were a number of E&O claims that involved the agents desire to place flood coverage. The agency sent in the app and trusted that the app had been received. As the storm

22 | JUNE 2014

Homeowners policy afford coverage?

Many experts have looked at this issue and generally concluded that even the broadest homeowners base policy form, absent any specific endorsements, would not provide coverage for the various issues pertaining to social media. After all, social media involves a different type of injury, typically characterized as one or more of the following “personal injury” type claims: libel, slander and violation of privacy and integrity. Claims involving these allegations are not going to fall under the definition of “bodily injury”.

allegations include “negligent supervision” of the child. This coverage may be temporary as homeowners carriers may look to develop an exclusion addressing this.

This is a great education topic for your customers. Is there a chance that by advising the kids that there may not be any coverage and “mom and dad could be sued and not have any coverage” that the kids would not be as aggressive in their social media use. I would personally hope so but I may be naïve in my thinking.

WISCONSIN INDEPENDENT AGENT

ERRORS & OMISSIONS

DO YOU HAVE A DOCUMENT THAT DETAILS YOUR DOCUMENTATION EXPECTATIONS? How does your agency communicate your documentation expectations to the staff?

In other words, if I came to work for your agency, how would advise me of what those expectations are? How would I know the standards that you are asking me to achieve?

Would the expectations be verbalized or is there a chance that you would just expect

a phone conversation. This should involve a requirement that the actual name of the customer be included (as opposed to “insured”) as well as sufficient detail of the exact essence of the conversation. Ideally, the documentation should be such that another member of the agency staff could read the documentation and know exactly what was discussed and any next steps or open items.

understands his/her insurance program in sufficient and necessary detail.

D Regarding documentation in the system, what abbreviations are acceptable and which words need to be spelled out.

If you duplicated the coverage and a problem developed, you may be asking, “Whose mistake is this? Mine or the prior agent?”

I believe that most courts and plaintiff’s attorney (representing the customer suing you) will look to prove that this is now your account and thus it is now “your mistake”.

Essentially, duplicating the mistakes of the prior agent does not relieve you and your agency from any liability.

To the extent that the agency has an active

What should an agent do? It is highly

Have a procedure that requires a follow up by the staff with the applicable market to verify receipt and to inquire as to any other key items/issues that need to be handled if the binding of coverage is required. me to know what your documentation expectations are? If I had previously worked in another agency, you might expect that I would know the importance of documentation. This is an “error or omission” you don’t want to make.

Since documentation really is one of the most fundamental and important aspects of a quality E&O loss prevention program, to ensure consistency, the agency standards should be actually documented in writing for all employees to know, understand and honor.

The documentation standards should include items such as: D How deletions of coverage are handled and when the customer declination of a specific coverage or limit should be memorialized in a written document back to the customer. What should be included in the document back to the customer?

audit process in place, by having your documentation expectations spelled out enables the “auditor” to measure the actual documentation against the standards.

Documentation is too important to leave it to chance or to believe that the staff knows what is expected of them. Put it in writing it is easy to do and will pay huge dividends down the road.

JUST DUPLICATE WHAT I HAVE: 5 VERY DANGEROUS WORDS These are probably 5 of the most common words spoken by both personal and commercial lines customers. What they seem to be saying, in my mind, is that “I am paying too much...just give the same coverage that I have now but at a lower premium.” In other words, their focus is primarily on the price, not the coverage.

So what is the danger in all of this?

D The expected time period for when telephone conversations should be documented in the agency system. Probably best to avoid statements such as “as soon as practicable” as the meaning of this phrase could vary by agency staff member.

D The expected level of documentation of WISCONSIN INDEPENDENT AGENT

Essentially, when a producer duplicates what the customer currently has, this heavily assumes that the prior agent did a professional job...a job that involved a current and in-depth evaluation of the various exposures and limit issues. It probably also assumes that the customer

recommended that an agent should utilize an exposure analysis checklist to identify the potential exposures to prompt discussion with the customer on those exposures. In addition, any limits (property, business interruption, liability, etc.) should be examined for their appropriateness. When it comes to liability limits, it is always best to offer options forcing the customer to decide which limit they want and thus which limits they do not want.

Don’t duplicate what they currently have.

This approach heavily removes the value that independent agents bring to the table. That value involving taking a fresh look at the customer’s insurance program and finding effective ways to help the customer better understand the coverage they have and how it works. In fact, look to include definitions and claims examples in the insurance proposal. This is a very effective “customer education” tool - it also is a great E&O loss prevention measure.

CERTIFICATES OF INSURANCE: WHAT COULD POSSIBLY GO WRONG? Over the last couple of years, E&O claims involving the handling of certificates of insurance have been on the rise. While most realize what a CONTINUED ON NEXT PAGE

JUNE 2014 | 23

ERRORS & OMISSIONS

E&O TIPS FOR AGENTS CONTINUED FROM PREVIOUS PAGE

certificate is, it is equally important to realize what a certificate is not. It is not a policy of insurance. It is not a contract. It does not amend, extend or alter the coverage afforded by the actual policies.

A certificate should not be issued with broader

coverage than the policy. If there is a need to provide broader coverage, such as adding an entity as an additional insured, check with the company first to make sure they will approve the endorsement request â&#x20AC;Ś and be sure to get this approval in writing! If the certificate requires the listing of an E&S company where

you are technically not the agent of record (the wholesaler is), contact the wholesaler for their approval or request that they issue the certificate. Many agencies assign specific staff to the issuance of certificates to avoid any problems.

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WS E N E H T N I S R E B MEM J.M. Wilson Wins AAMGA Community Service & Marketing Awards J.M. Wilson Corporation will be recognized with two awards at the 88th Annual Meeting of the American Association of Managing General Agents (AAMGA). The AAMGA recently announced that J.M. Wilson has been selected to receive the first place award for their outstanding Social Media efforts and was chosen ‘among the very best’ as a winner for their dedication to Community Service, all in the MGA Member category.

According to the AAMGA, the Advertising & Marketing awards are “awarded to members with the most innovative advertising, newsletters, sales materials, website, stationery and other collateral materials.” The Community Service Awards are “awarded to members who have contributed the time and talents of their employees to advancing causes in their local communities.” J.M Wilson is a long-standing member of the AAMGA and couldn’t be more excited to receive these awards.

The AAMGA was established in 1926 and has continuously served the interests of insurance companies and agents for more than 75 years. It is recognized as the voice of the wholesale and excess and surplus lines insurance industry.

For more information about J.M. Wilson, visit www.jmwilson.com.

Winner Joins Grange Insurance as President of Commercial Lines Grange Insurance announced today that Michael Winner has joined the Columbus, Ohio, based insurance provider as president of commercial lines. In this role, Winner will be responsible for the overall growth and profitability of the company’s commercial lines book of business, including product development, underwriting Mike Winner management, risk control and operations.

Winner brings nearly 30 years of insurance experience to the position. Most recently, he served as president of Liberty Mutual’s Mid-Atlantic Region for business insurance and was responsible for managing an eight-state regional insurance operation with nearly $700 million in commercial premium. Prior to his most recent assignment, he was President & CEO of Ohio Casualty, a regional property and casualty company within Liberty Mutual’s Agent Markets operation. Liberty Mutual acquired Ohio Casualty Corporation in 2007 where he previously served as chief financial officer.

Before joining Ohio Casualty Corporation, Winner held several positions at Nationwide Insurance, including vice president of finance.

28 | JUNE 2014

“Mike’s deep industry knowledge and record of profitably growing middle market commercial insurance businesses make him a great addition to our team,” said John Ammendola, Grange Insurance Chief Property & Casualty Officer. “It is his strategic vision that will prove to be an asset as we continue to position Grange as a strong competitor in the marketplace long term.”

Winner is immediate past chairman of the leadership council of The Griffith Insurance Education Foundation and a member of the board of directors for the Cincinnati Chapter of the American Red Cross. He earned a Bachelor of Science in Business Administration from Bowling Green State University.

For more information about Grange Insurance, please visit www. grangeinsurance.com.

ACUITY Named a Top-Ten Workplace for Millennials ACUITY is named to the Ten Great Workplaces for Millennials list, produced by Great Place to Work, Fortune’s partner for the 100 Best Companies to Work For list.

“Millennials are a crucial generation for businesses as they plan for their future,” said Kim Peters, Great Rated! CEO. “Top companies have found that meaningful work, ethical and caring management, and generous compensation make young employees feel comfortable and excited about work.”

Millennials are typically defined as people born in the 1980s or 90s.

Companies appearing on the list have at least 50 employees younger than 35 years of age and had top scores from their millennial-aged employees in an anonymous survey, the Trust Index, which measures the trust, pride, and camaraderie within a company.

“Millennials have their unique characteristics, but our research over three decades shows that employees of all ages appreciate high-trust workplaces,” said China Gorman, Global CEO of Great Place to Work. “Congratulations to the Ten Great Places for Millennials for understanding how to create a great culture for this vital generation.”

“ACUITY is committed to providing a great workplace for all our employees, across all generations,” said Ben Salzmann, ACUITY President and CEO. “Being named a Great Workplace for Millennials shows that we have created a culture that is built on trust and respect and that provides rewarding work and career opportunity.”

For more information about ACUITY, please visit acuity.com.

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like our heavy-duty insurance program.â&#x20AC;?

Joel Pesch, Milwaukee Branch Commercial Underwriter

With a range of insurance coverages including errors or omissions, extensive loss control resources, expert claims knowledge and local service from an independent agent like you, EMC offers an insurance program designed specifically for light manufacturers.

Itâ&#x20AC;&#x2122;s just one of the many reasons why you and your commercial clients Count on EMC ÂŽ.

Milwaukee Branch: 855.495.1800

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Home Office: Des Moines, IA

www.emcins.com Š Copyright Employers Mutual Casualty Company 2014. All rights reserved.

WISCONSIN INDEPENDENT AGENT

JUNE 2014 | 29

FOOD FOR THOUGHT

HAPPY BIRTHDAY TO THE SONG’S AUTHOR

Mildred J. Hill (1859-1916) was born in Louisville, Kentucky on June 27, 1859. She composed the melody for what is arguably the world’s most recognized song, Happy Birthday to You. Her sister, Patty, is credited with writing the lyrics.

The song was originally titled, Good Morning To All. In 2008, Warner/Chappell collected $5,000 per day in royalties for the song.

Source: historyplace.com & wikipedia.com

LIVING LONGER & LARGER IN MONACO

In 1914, the average life expectancy for people in the United States was about 54 years of age. In 2014, the average is almost 79 years of age. That ranks the U.S. at #53 in the world, sandwiched between Taiwan (52) and Bahrain (54). Monaco tops the list at 89 years of age. Don’t know if it’s related but Monaco has the world’s highest GDP per capita at $153,000, the highest number of billionaires and millionaires in the world, and (according to 2012 data) just 2% unemployment, also the best on the planet.

Source: geoba.se & The World Factbook

FATHER OF FLAG DAY

On June 14, 1885, the first observance of Flag Day in Wisconsin occurred at the Stony Hill School near Waubeka, about 12 miles east of West Bend. The event was led by Dr. Bernard J. Cigrand, a dentist. Flag Day did not become a national observance until 31 years later when Woodrow Wilson recognized it on June 14, 1916.

Source: wisconsinhistory.org

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(608) 828-2614

hqnienow@AAAwisconsin.com

It’s just one of the powerful tools AAA Independent Insurance Agents enjoy.

IE-0011

30 | JUNE 2014

Insurance underwritten by Auto Club Insurance Association or Auto Club Group Insurance Company.

WISCONSIN INDEPENDENT AGENT

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Independent Insurance Agents of Wisconsin

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MADISON WI PERMIT NO. 2506

725 JOHN NOLEN DRIVE MADISON, WI 53713 ADDRESS SERVICE REQUESTED

Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide.

For information call (877) 234-4450 or visit auw.com/us.

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Insurance plans protected under U.S. Patent No. 7,908,157.