Primary Agent - February 2023

CONTENTS FEATURED

6

Q&A WITH DAN GEPHART

Dan Gephart, owner of IA&B member agency Looker, Wolfe & Gephart, offers tried and true advice for new producers.

8

E&O CONCERNS FOR VIRTUAL ASSISTANTS

As virtual assistants gain in popularity for independent agencies, consider the associated coverage and risk management concerns. Bob Porten, of Utica National, shares insights and risk reduction tips.

11

THE SKILLS-BASED ORGANIZATION

Consider a new outlook for your agency –focusing on employees’ skills, rather than job descriptions. Sharon Emek, of Work At Home Vintage Experts, explains how becoming a “skillsbased organization” can benefit your business.

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3

STRATEGIC PLAN

Toward the end of last year, I alluded to the strategic planning session that the IA&B board of directors, staff, and a national consultant worked on. The purpose of this planning was to set a long-term strategic roadmap for IA&B – looking out over the next five to seven years. The IA&B board has officially approved this plan, and I’d like to outline what it is IA&B is going to be working on – for you:

Attract diverse new talent through localized recruitment campaigns with community partners.

We continue to hear from members that they are looking to hire and/or perpetuate their agency. IA&B has attempted to address this through various partners, but now we are going to take matters into our own hands. We are going to directly work in schools, as well as look across other industries, to recruit individuals into the independent agency channel.

Create a training program for those new to the insurance industry that prepares them as professionals ready for hire.

As we recruit individuals into the industry, IA&B will develop and build an independent insurance agent “school.” We will train individuals on the basics of insurance, as well as the soft skills (think sales training, marketing, communication) necessary to be successful. And of course, we will get these individuals licensed. IA&B’s plan is to have a steady stream of well-trained individuals coming out of our program, and immediately becoming a key employee for our members.

Build an internal consulting service that supports agencies to grow, improve, and perpetuate.

I’ve said it many times – nobody knows independent insurance agents better than IA&B. It’s time that we bring this knowledge into our member agencies, and proactively grow these agencies. Whether it be agency analytics, agency efficiencies, or enhanced market access, IA&B will show you what it takes to be a winning agency and will work directly with you to ensure that success.

For these initiatives to work, IA&B must invest heavily into these programs, and that’s what we are going to do. While we will continue to provide our core programs and services you have come to rely on, we will be focused on these new projects over the coming years. Our vision is to ensure a thriving independent insurance agent community, and we feel this work will help achieve that.

Best,

INSURANCE AGENTS & BROKERS

650 Wilson Lane, Suite 200 Mechanicsburg, PA 17055

191 Main Street, Annapolis, MD 21401 800-998-9644 | IABforME.com

IA&B BOARD OF DIRECTORS

OFFICERS

Richard M. Rankin, CIC - Chair

Murray Insurance Associates, Inc. | Lancaster, PA

Sarah Brown, CIC, CRM, AFIS - Vice Chair

Keller Brown Insurance Services | Shrewsbury, PA

MEMBERS

Greg Bennett

Famous & Spang Associates

Aberdeen, MD

Kate Dawson, CPIA

Ferri Dawson Insurance

Murrysville, PA

Andrew Enders, Esq.

Enders

Harrisburg, PA

Len Gieseler, LUTCF

Evans Hauseman & Richard, Inc.

Pottstown, PA

Bruce D. Kraft, AAI, CIC

Arbor Insurance Group

Allentown, PA

Shayne McIntosh, CIC

JPI Insurance Associates

Dillsburg, PA

Chris Miller, CIC

Miller Insurance Protection Team

Jonestown, PA

Michael Papa, CIC, MBA

Diversified Insurance Industries, Inc.

Hunt Valley, MD

Bill Purdy

Purdy Insurance Agency, Inc.

Sunbury, PA

Kent Reynolds, CIC

Blue Ridge Risk Partners LLC

Hagerstown, MD

Jason Rodriguez

Prominent Insurance Svcs

Wilmington, DE

Donna Roper

E K McConkey & Company

York, PA

Candace Shoupe, AAI, AIC

CBM Insurance Agency

New Castle, DE

Tara Silfies, CPCU

Hampson-Mowrer Agency, LLC

Bethlehem, PA

Bob Smyrl, CIC

Robert L. Smyrl, Inc.

Hatfield, PA

Michael Thomas

Lighthouse Insurance Svcs

Gambrills, MD

NATIONAL DIRECTORS

Mike Ertel (PIA)

The Jacobs Company, Inc. | Columbia, MD

Mark Monroe (IIABA)

Griffith Insurance, LLP | West Chester, PA

Diana Hornung Hanby (IIABA)

IOA National, Inc. | Wilmington, DE

Jason F. Ernest President & CEO

CLAIRE-IFICATION

IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR Are you a member with a question? Contact Claire to find the answer at 717-918-9202 or ClaireP@IABforME.com.

QUESTION:

Where can we find insurance brochures in Spanish that our Spanish-speaking staff can use to help support the “technical” side of their conversations?

ANSWER:

An increasing number of agencies are trying to cater to the Spanishspeaking community and an increasing number of resources is available.

For some general brochures with more of a marketing angle, the Insurance Information Institute (III) has flyers already made. From the url below, you can scroll down to “Online Brochures,” and you will find flyers both in English and Spanish. Just as above, if you speak Spanish, you’ll be able to see if you’re comfortable with the wording and if it properly reflects what you are looking to explain. http://www.iii. org/store

For state-specific coverage, our three states have made an effort to develop resources in several languages, particularly in Spanish.

Pennsylvania Insurance Department - https://www.insurance.pa.gov . The website has a translate option (top right corner). The feature translates the web page instantaneously. The coverage brochures, however, have not thus far been translated.

Maryland Insurance Administrationhttps://insurance.maryland.gov and select “En Español” (top right).

Delaware Department of Insurance - https://insurance.delaware.gov/ information/espanol/

Other states nearer our southern borders have developed glossaries and other resources that could be used for basic insurance concepts. However, if you use a resource from another state, you may want to exercise caution before providing it to your customers and make sure the information is generic enough to apply to your state’s coverages as well. If your staff is fluent enough to read the Spanish version, and finds it properly translates the coverage as applicable in your state, then go with it. If your staff can speak Spanish but is unwilling to make the call based on the technicality of the translation, first review the English version to make sure the coverages are properly described (when the English version is available). The Texas Department of Insurance has several insurance glossaries (depending on the line) at https://www.tdi.texas.

gov/webinfo/glossaries.html

For Flood insurance, FEMA provides brochures in Spanish at https://www. fema.gov/flood-insurance/outreachresources/publications . In addition, many web pages are fully translated and display buttons showing the languages available for that page, including Spanish.

Finally, some carriers may offer documents in Spanish. USLI has an insurance glossary at https://www. usli.com/media/pq0ppjhg/uslienglish-spanish-glossary.pdf

This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

FREEZING EXCLUSIONS AND THE RTFP! PRINCIPLE

By Bill Wilson, CPCU, ARM, AIM, AAM

I live in Tennessee, a locale not known for frigid winters. Although we do often have extended periods of weather where temperatures do not get above freezing, as well as occasional nights where the temperature drops to single digits and, in rare instances, negative numbers.

While this does not normally present a major indoor property damage exposure due to freezing unless there is an extended power

outage, we practice loss prevention by insulating pipes, including wrapping outdoor faucets and hydrants in the winter.

But what happens if these efforts are not successful, a fixture bursts, and property is damaged? Does our homeowners’ insurance cover this? We’ll discuss this in more detail below but, by and large, as long as we exercise reasonable care to maintain heat in buildings where plumbing is located, we’re

covered for property damage arising from freezing. But what happens if plumbing outside a building freezes?

Some homeowners have outdoor plumbing fixtures more elaborate than simple faucets and hydrants. For example, both of my next door neighbors happen to be retired transplants from the Northeast and both have hot tubs, one inground and one above ground. The latter hot tub has a fairly extensive amount of exposed plumbing. My neighbor

insulates it as best as he can and, so far, has not experienced any freezing damage. But what happens if he does? Does his homeowners’ insurance cover resulting damage due to freezing?

As usual, the answer to this question depends on the specific wording of the homeowners’ policy in question, and the only way to answer this, or any, coverage question is to apply the RTFP! Principle. That is, Read The … Policy!

Let’s explore this issue in the context of a claim I consulted on a few years ago with the exact scenario of an above ground hot tub exposed to several days of extreme, virtually unprecedented freezing weather while the homeowners were out of town for a few days. The homeowners’ policy in question was an Insurance Services Office (ISO) HO 00 03 form which had this exclusion:

Freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing. This provision does not apply if you have used reasonable care to:

(a) Maintain heat in the building; or

(b) Shut off the water supply and drain all systems and appliances of water….”

So, freezing is excluded unless the insured either shuts off the water and drains the system and appliances or maintains heat in the building. The insured does not have to do both of these things, just one of them.

Needless to say, since the hot tub is used throughout the winter, the plumbing system and hot tub have not been drained of water.

However, the insured did maintain heat in the dwelling.

Wait a minute, I know what you’re thinking … whether or not the dwelling was heated had no impact whatsoever on whether or not exterior plumbing might freeze. Well, for better or worse (and this can work for or against the insured), common sense sometimes does not enter into insurance claims.

The policy language clearly, conspicuously, and unambiguously says that, if you take reasonable care to maintain heat “in the building,” the freezing exclusion does not apply. Again, this doesn’t really make any practical sense, and it seems unfair for an insurer to pay such a claim. But, alas, the insurer’s only option is to modify the insurance contract language to exclude such losses in the future if that’s their intent.

So, do you have customers with outdoor plumbing exposures? If so, does their insurer cover such losses, or must they rely solely on an alternative risk management approach?

LIVE CE WEBINARS

Learn more about homeowners' exposures and earn CE during these upcoming live webinars.

IA&B Members - $75 Non-members - $105 Members save $30!

CLAIMS THAT WILL CONVINCE YOUR INSURED TO ENHANCE THEIR HOMEOWNERS’ COVERAGE

An audio version of this article is also available as a podcast

Q& A with DAN GEPHART

Dan Gephart, CIC is owner of Looker, Wolfe & Gephart Insurance Agency Inc., a full-service independent agency in Harrisburg, PA.

Q. You worked on the carrier side before joining your father at the agency. Did you always intend to work in the industry? Tell us about your career path!

A. Like many others, it was not my original intention to get into the insurance industry. After graduating from the University of Delaware in 2006, I entered the work force searching for a career and was hired as a claims adjuster with Penn National Insurance. I really enjoyed my time with the company, and it was a great experience in learning coverage forms, dealing with insurance consumers in a time of need, and preparing me for helping future clients when claims issues arise.

Q. You’ve been an independent agent for nearly 16 years now. What advice would you give producers who are just getting their start?

A. Document your files clearly, learn about your carrier partners and their products, and understand that you cannot help everyone. It can be easy to get into the “weeds” trying to jump through hoops for an opportunity that may not be a good fit for your time or agency.

Q. What do you consider the best part about working in the insurance industry?

A. I value the relationships that I have built with my customers, as well as how quickly my work day flies by –never a dull moment!

Q. On the flip side, what do you consider the biggest challenge(s) facing the independent agency system?

A. Staying relevant in an ever-crowded industry with lots of players. I personally am not worried about all the insuretech “disruptor” carriers, but there continue to be new partnerships with manufacturers and insurance providers that may put some strain on the IA channel in the future.

Q. You joined IA&B several times for the Big “I” Legislative Conference in Washington, D.C. Tell us about your experience!

A. I have enjoyed a few trips to D.C. for the Legislative Conference. If you have never participated in one, you owe it to yourself to attend and find out what they are about first hand. I have always enjoyed the dinner and getting to know some fellow IA&B members and staff before the day on Capitol Hill. Being able to meet face-toface with decision makers at the Capitol to help protect our clients and industry is well worth the trip!

Q. What keeps you busy outside of work?

A. I enjoy spending time with my family, as well as hiking, backpacking, cooking, and kayaking.

Speed round: What is your …

… favorite TV show? I haven’t watched an episode in a while, but probably the clever writing and jokes give Arrested Development the nod for favorite TV show.

… favorite sports team?

E – A – G – L – E – S, EAGLES!

… (shameless plug!) favorite IA&B member benefit? There really is so much content to choose from, especially on the IA&B website. I continuously use the Customer Flyer PDFs that we have branded with our agency information when sending prospects quotes and information. These flyers do a great job of answering a lot of questions for prospects, helping educate them on coverages they may not know much about, as well as provide some E&O protection.

CA TO REQUIRE LICENSE NUMBER ON EMAILS

If you hold a license in California, a new law now requires you to include your CA license number on emails to California customers as of Jan. 1, 2023. Existing law already required licensees to include license numbers and the word “insurance” on business cards, quotes, and print ads, as well as on a website if any internet advertising was done.

Insurance.ca.gov/0200-industry/0110-whats-new/

PA ACCELERATES LICENSE PROCESSING

The Pennsylvania Insurance Department has improved its overall cycle time for the producer license application process. The processing time –once all documentation is received – has decreased from over 20 days to under 10 days. One reason for the change: The Department now receives criminal history clearances from the FBI electronically, rather than through the mail.

Insurance.pa.gov/licensees

DE NON-RESIDENT LICENSE RENEWAL

Attention Pennsylvania and Maryland members: Do you or your agency hold a non-resident license in Delaware? If so, note that individuals and business entities must renew their non-resident license by Feb. 28. The decision not to renew requires a voluntary license surrender.

Insurance.delaware.gov/divisions/renewlicense/

FIRST ANNUAL WOMEN’S CONFERENCE

Join IA&B for its first annual, in-person Women’s Conference on Wednesday, March 29 in Lancaster County, PA. The one-day event is aimed to support women in all industry positions who want to grow within their jobs, elevate their agency, and improve our industry.

Sign up by Feb. 28 to take advantage of early bird registration – only $99 for IA&B members.

IABforME.com/womens-conference

IA&B’S JOHN SAVANT RECOGNIZED

Congratulations to IA&B Government Affairs Director John Savant on being named to the Government Relations Power 100 list. This list recognizes and honors professionals for working with elected officials to help inform legislation that benefits their organizations in particular and Pennsylvanians in general.

Virtual Assistants: E&O Concerns and Risk Management Tips

BY BOB PORTEN, UTICA NATIONAL COMMERCIAL LINES UNDERWRITING SPECIALIST

Insurance agencies are using virtual assistants more and more. These services can be advantageous, but there are coverage and risk management concerns, too.

WHAT IS A VIRTUAL ASSISTANT?

Also referred to as a third-party resource, outside resource, or back-office support, a virtual assistant is an organization an agency contracts with to perform services that typically slow agencies down, such as:

● Checking policies, comparing expiring to renewal forms and edition dates, and alerting agency personnel to changes

● Issuing Cer tificates of Insurance (COIs)

● Policy processing

● Data entry

● New business suppor t

● Sending auto responders

Having a virtual assistant allows agency personnel to focus more on selling, improving the customer experience, eliminating backlogs, and growing the agency. Depending on the services the agency contracts, the provider will assign several individuals to work on that business, in most cases exclusively for the agent. This will be adjusted as contracted services change or the agency grows. These individuals do not typically have direct contact with

agency customers as agency personnel continue to be the public face of the agency.

COVERAGE CONCERNS

Does the Utica National Agents’ E&O policy cover virtual assistants? The vendor and its employees would not fall within the definition of “who is an insured” on the E&O policy. If there is a problem with their work that results in an E&O claim, the E&O claim would likely be brought against the agency. If the agency is named in a claim covered by the E&O policy, Utica National would provide defense to the agency. If the agency is found liable, then that is what your E&O is for.*

Does the E&O carrier have recourse against the virtual assistant if it was determined that their error resulted in the E&O claim? It’s possible. Make sure the virtual assistant maintains its own E&O coverage. However, the contract between the agency and the virtual assistant –and the E&O coverage carried by the virtual assistant – is mostly likely limited to gross negligence, which is less likely to occur and hard to prove.

RISK MANAGEMENT TIPS

If you are considering using virtual assistants, you should protect yourself by:

● Obtaining references and following up on them. Reputation is important.

● Having your attorneys review the contract.

● Requiring the virtual assistants to carry their own E&O and provide you with proof coverage is in place.

● Checking their work regularly to ensure they are meeting your expectations.

● Contacting your E&O carrier. Advise them of the vendor you are using, what services they are performing, and the staff equivalency for those services. Not all E&O policies are the same – so there may be conditions or exclusions for claims arising from wrongful acts caused by the virtual assistants.

DON’T LET THIS HAPPEN TO YOU

An agency entered a service contract with a virtual assistant service. One of the tasks performed by the service on behalf of the insured agency involved the creation and distribution of Certificates of Insurance (COIs) for the agency’s customers. The claim against the agency involved an alleged error on a COI issued by the virtual assistant.

The COI indicated that an underlying CGL Policy was written with Products Completed Operations Coverage. This was not the case, and the carrier denied coverage for an underlying claim since the policy was not written to afford coverage for this exposure. The client filed suit against the agency for issuing a defective COI. A subsequent third-party action was pursued on behalf of

the agency against the virtual assistant service. The E&O and underlying claims were resolved for $165,000.

LESSON: When using a virtual assistant, be aware that their errors may result in an E&O claim against your agency.

*The facts of a claim determine the application of coverage and any exclusions. This response does not alter, modify, or change any of the terms, conditions, or exclusions of the Utica Mutual E&O policy. Utica Mutual Insurance Company reserves all rights and does not waive any rights contained in the E&O policy.

This information is provided solely as an insurance risk management tool. Utica Mutual Insurance Company and the other member insurance companies of the Utica National Insurance Group (“Utica National”) are not providing legal advice, or any other professional services. Utica National shall have no liability to any person or entity with respect to any loss or damages to have been caused, directly or indirectly, by the use of the information provided. You are encouraged to consult an attorney or other professional for advice on these issues.

@ 2022 Utica Mutual Insurance Company

A New Breed of Flexibility: The Skills-Based Organization

By Sharon Emek, Work At Home Vintage Experts (WAHVE) CEO

By this point, you’ve probably been inundated with news stories and fact-filled reports about the talent shortage sweeping the nation. It’s become increasingly difficult to attract and keep the best and brightest employees, with July 2021 seeing the highest-ever number of U.S. employers with unfilled positions.

Needless to say, organizations are feeling the pinch. Many are responding with promises of higher salaries, nurturing cultures, and, of course, flexible work environments –which existing employees and job seekers alike have claimed as a top priority for them.

However, according to recent reports by the likes of Deloitte and Korn Ferry, the key to solving the talent gap might require another kind of flexibility, one that the organization itself must take on. Enter the “skills-based organization.”

“To enable agility and maintain competitiveness, organizations must shift from understanding the unit of work in terms of fixed, static jobs to reimaging it in terms of a dynamic landscape of skills that can be agilely deployed to work as it continuously evolves,” writes Deloitte’s Michael Griffiths.

Continued on page 13

Continued from page 11

And as Korn Ferry’s “Future of Work Trends 2022” report puts it: “Successful organizations are shifting their thinking towards the capabilities needed to win in their marketplace. Through strategic modeling of future workforce options, they clarify the future roles, skills, and mindsets to deliver their strategy. They then focus on sourcing and developing these through reskilling, upskilling, recruitment or drawing on the wider ‘gig economy’ of flexible workers.”

Indeed, companies will need to be flexible in how they think about their internal roles and responsibilities if they want to attract and retain great people. What does that look like?

Well, it starts at the beginning, with your hiring practices. No longer should you be looking at a job description and trying to match bullet points on a candidate’s resume to it. According to Korn Ferry’s “Future of Work Trends 2022” report, 69% of the world’s most admired companies value learning agility and curiosity over career history and experience when it comes to hiring. You need to reimagine “jobs” as broader “goals to achieve,” and consider the skills that are necessary for achieving those goals.

At WAHVE, for example, we blind-screen candidates based on skills and organizational fit, ensuring that those who are hired have both the right skillsets and mindsets to thrive in their new environments.

Next, take a look at your existing workforce. In the broader context of your strategic goals, how do your people help take you there? Keep in mind that skills are transferrable. Silos are your enemy: Consider mixing and matching individuals from different teams to create a “dream team” for a particular project. As Korn Ferry puts it: “Expect more project-based working, where teams assemble to achieve specific goals before dispersing back out into the organization.”

Further, offering employees the opportunity to work on projects based on their interest and skillsets is another way to motivate and keep them: Professional development and learning opportunities are consistently listed as top benefits that employees seek from their organizations.

We at WAHVE have always believed that individuals’ skills and professional goals are what drive their ability to succeed in any environment. Our very business model

is based on it. And we feel that the rise of the skillsbased organization is proof that this concept is the way of the future.

“What was a slowly growing sentiment has been accelerated exponentially. The need for organizational agility and resilience spotlighted by the pandemic, digital transformation’s disruption of jobs and tasks, and the need to access and retain skills amid the ‘Great Resignation’ has put skills front and center,” Griffiths writes for Deloitte.

I invite you to join us in embracing this exciting future of work – and to get ready to boost your company’s talent, goals, and growth into the stratosphere.

Sharon Emek, Ph.D., CIC, is founder and CEO of Work At Home Vintage Experts (WAHVE). WAHVE matches “retired” insurance professionals who have remotework experience to meet agencies’ specific staffing needs. As a vetted IA&B partner, WAHVE offers IA&B members a 50% discount on the one-time setup fee. Learn more at IABforME.com/HR-resources.

An audio version of this article is also available as a podcast

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Get to Know …

Katie Malinowski, IA&B Education Team

When did you start at IA&B?

I started in March of 2020. On my first day of work, we were directed to work from home for a few weeks due to the beginning of the COVID pandemic. I’ve been working remotely since then!

What did you do before you joined our team?

Since graduating college, I’ve worked at different small companies in the south-central Pennsylvania area, doing everything from bartending to customer service to accounting.

Role at IA&B:

As an Education Assistant with IA&B, I help people with registration for our courses, and I answer member questions about our programs. I also file Continuing Education credits for our webinars and on-demand programs.

Best part of your job:

I really enjoy answering questions and fixing any issues that may arise for our members – from a simple password reset to more involved questions about CE, licensing, etc. If I can’t answer the question, I can always get an answer from my coworkers who are so quick to help. It’s satisfying knowing that people can call in or email us and we can point them in the right direction.

What keeps you busy outside of work?

I mostly want to spend my time outside, but when the weather isn’t cooperating, I like to paint and watch truecrime documentaries. My husband and I have three dogs that we try to run as much as possible to stay sane. We also enjoy hiking, foraging, and working on our farm where we raise pastured poultry, eggs, and produce. We love to cook for our friends and family and enjoy hosting them when time allows!

You can reach Katie at:

717-918-9210

KatieM@IABforME.com

WELCOME NEW MEMBERS