Pennsylvania Primary Agent - January 2020

JANUARY 2020 | PENNSYLVANIA

SARAH BROWN

INSPIRATION FOR THE NEXT GENERATION

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IN THIS

10 ON THE COVER: Q&A WITH SARAH BROWN Sarah Brown shares insights on agency and industry perpetuation.

14 AGENCY E&O: WHAT TO BUY & WHY?

Industry insiders discuss the process and considerations for selecting an agency’s E&O coverage limits.

IN EVERY ISSUE 2 3 4 6 8 9 18 21 21

Chair of the Board’s Message Claire-ification Preventing Errors & Omissions Coverage Corner News & Notes New Members Pics & Posts Education Classified Ads

JOIN US ON SOCIAL MEDIA: Facebook.com/IABforME LinkedIn.com/company/IA_and_B Twitter.com/IA_and_B

AGENCY E&O: WHAT TO BUY & WHY?

About IA&B IA&B is the premier resource and champion for independent insurance agents in Pennsylvania, Maryland, and Delaware.

Periodical postage paid at Mechanicsburg, Pa. and at additional mailing offices.

Postmaster: Send address changes to Insurance Agents & Brokers, 5050 Ritter Road, Mechanicsburg, PA 17055.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2020-1, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

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Copyright 2020. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and/or other professional advisors concerning specific matters before making any decisions. We disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

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CHAIR OF THE BOARD’S MESSAGE

BOARD OF DIRECTORS INSURANCE AGENTS & BROKERS 5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com

RESOLUTIONS FOR A PROSPEROUS YEAR

OFFICERS

Chair of the Board

Craig S. Mader Crofton, MD

H

Vice Chair of the Board

Richard M. Rankin, CIC

appy New Year! It’s hard to believe that 2020 is upon us. I would be remiss if I didn’t suggest some resolutions in this message. (No, I’m not here to nag you about diet and exercise). You see, your agents’ association has a number of initiatives in the works as we start the new year, so I encourage you, now more than ever, to take advantage of everything your membership offers.

In 2020, resolve to …

GET INVOLVED

Shrewsbury, PA

Emory Stephen Burnett, CIC, ARM Wilmington, DE

Andrew Enders, Esq. Michael P. Ertel Sr.+ Columbia, MD

Len Gieseler, LUTCF Pottstown, PA

G. Greg Gunn, CIC* Lemoyne, PA

Bryan C. Hanes, JD

PRIORITIZE LEARNING

Hagerstown, MD

A well-educated staff is better prepared to make sales, round out accounts, provide superior customer service, and minimize your E&O exposure. So make this the year that you prioritize professional development for your staff and take advantage of IA&B’s award-winning offerings (and use your member discount).

Lisa A. Leach Goth, CIC New Bethlehem, PA

Shannon Lipniskis Indiana, PA

Elizabeth H. Martin, CIC Millersville, PA

PROTECT YOUR AGENCY When was the last time you reviewed your E&O coverage limits? (Read more on page 14.) And have you considered your agency’s evolving exposures, such as employment-related lawsuits and cyber attacks? IA&B offers competitive insurance programs geared specifically for independent agencies. Your experts are at the other end of the phone at IA&B.

Mark J. Monroe

West Chester, PA

Michael A. Papa, CIC, MBA Hunt Valley, MD

D. Bradley Rosenkilde Jr. Hunt Valley, MD

Tara S. Silfies, CPCU Bethlehem, PA

STAY TUNED As I mentioned earlier, IA&B is working on several new projects – from market access, to new talent recruitment, to consultative services. There have never been more opportunities to benefit from your IA&B membership.

As I renew my gym membership (LOL), I wish you and yours a happy and prosperous 2020!

Robert L. Smyrl Jr., CIC Hatfield, PA

J. Marshall Wolff, CIC, CPCU Easton, PA

* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director

Respectfully,

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MEMBERS

Sarah M. Brown, CIC, CRM, AFIS

Harrisburg, PA

From participating in government affairs work, to focus groups, to the association’s governing board, opportunities abound for you to make a difference for IA&B and your profession. You will find the work and the resulting relationships personally rewarding, as well. And please resolve to donate to your state political action committee, AgentPAC!

Lancaster, PA

Craig Mader Chair of the Board JANUARY 2020

Don’s Discussion Claire-ification IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR provided this month’s answer.

Are you a member with a question? Contact Claire to find the answer at 800-998-9644, ext. 604 or ClaireP@IABforME.com.

QUESTION: Is it possible to end a relationship with a customer who is becoming an issue to my agency and my staff? If so, what is the best way to do it?

ANSWER: It is not unusual to run into a “nuisance” customer who seems to be spending his time being offensive or trying to trip agency staff any chance he gets.

However, getting rid of such a customer is not always clear or simple, and some precautions are in order. The best options to do it are to:

3) Ask the company to take the account in-house. This is a variation from the BOR option – and sometimes an easier one. If the company has an in-house agency, then they may be willing to attach the customer to the in-house account, and you would no longer have to deal with him.

1) Ask the customer to go somewhere else … and be diplomatic about it. This is the preferred option as the customer would leave on his own. If you can frame the issue in a way that shows that there is a lack of trust, and that it seems fruitless to try to pursue a business relationship when trust is strained, the customer should see the writing on the wall, and you should be able to gently push him out.

Obviously, if the customer has been offensive or even inappropriate to your staff, this gives you more freedom in your communication. No need to start a war though.

4) Ask the company to non-renew. This is often the first thought on anyone’s mind, but it is the most difficult to implement and the most likely to cause other issues. Non-renewing implies compliance with state laws and regulations governing policy cancellations. Generally, in addition to and included in the advance notification of non-renewal by the carrier, there will be a requirement to disclose the reason for the nonrenewal. Such disclosure would be awkward at best. In some cases, it could be considered improper. The customer, incensed by the non-renewal and somewhat-public shaming, could argue that the reason used is a pretense and a proxy for something else and try to turn the non-renewal into a discrimination claim. And I’m not even going to broach the platform that social media provides these individuals.

2) Suggest a Broker of Record (BOR) letter. If you have a friendly competitor willing to take on a challenging customer, or if the insured’s carrier can recommend someone, maybe a BOR will take care of the issue.

Remember that because some policies (such as personal auto) are mandated by law, non-renewals and declinations of coverage, and their reasons, must be documented so that the applicant can ultimately access the state’s market of last resort. If they are not, you’ll likely be in a tough spot yourself. The options above are probably your best bet to get the outcome you want without having to explain yourself to the regulator.

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.

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PREVENTING ERRORS & OMISSIONS

EMAIL: FRIEND OR FOE TO INSURANCE AGENCIES?

By Curtis M. Pearsall, CPCU, AIAF, CPIA

E

mail was first created in 1971, but it didn’t start to play a big role in people’s lives until the ‘90s.

It has contributed to our level of communication becoming more written and less verbal. Many years ago, the sounds of phones ringing and staff talking on the phone were extremely common in insurance agencies.

Nowadays, agencies are quieter as email communication has become the norm.

HAS THIS BEEN A GOOD THING? From an insurance agency perspective, generally, the answer to that question

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is probably, “Yes.” Email has created the ability for agencies to communicate with their various customers (clients, insurance carriers, wholesalers, etc.) in a fairly efficient manner. Pre email, for an agency to bind coverage, to secure information, or to get updates on a client’s exposures, agency staff had to either pick up the phone and hope they would get the party they desired, or use regular mail, which had its advantages and drawbacks. Today, email has largely replaced both of these approaches.

A typical question from many agencies’

JANUARY 2020

staff, especially on matters dealing with an errors and omissions (E&O) claim, deals with the issue of whether email is an acceptable and legal form of communication. The question becomes whether: • The email is clear, • The recipient consented to receive email communications, and • The email was received.

With respect to the latter issue, emails can get deleted or caught in the recipient’s

spam filter. Approaches to address the acceptability of emails include written certification from a customer that you can communicate by email and to which address, and written acknowledgement that the recipient received the email.

Some agencies use an approach that requests the recipient reply to an email stating something to the effect of, “I got your email.”

WHAT ABOUT EMAIL REQUESTS TO BIND COVERAGE? Let’s look at an actual claim and give consideration to any lessons learned. This claim arose out of a hit-and-run involving a minor child. The client allegedly sent an email to the agency to add a vehicle to their auto policy. The email got caught in the agency’s spam filter, and thus the agency never saw the email. As a result, no coverage was bound for the additional vehicle. The customer never followed up with the agency until after the accident, several months later.

It is not clear why the client didn’t contact the agency, especially when a revised declaration page and premium should have been anticipated. It appears that they presumed that by contacting the agency (via email), coverage was technically bound.

What could the agency have done better? While it is certainly much more common that agencies include on their voicemail greetings a statement such as, “Please note, coverage cannot be bound or amended without written verification by an agency representative,” it would be advisable for agencies to include something similar on their emails.

Including the voicemail statement as part of the signature line on their emails would make it very clear to clients that they cannot simply send an email on some change in coverage and expect that

the coverage has been bound. This is a form of client accountability.

It would be wise for the agency to advise clients (for all existing clients and then especially on all new business) the various “do’s and don’ts” on communicating with the agency in the form of an engagement letter. When an E&O claim occurs, the defense of the agency could be potentially impacted by taking steps to ensure clients understand the rules of engagement, especially when it comes to matters involving email. urtis M. Pearsall, C CPCU, AAIF, CPIA is president of Pearsall Associates, Inc. and consultant to the Utica National E&O Program.

This information is provided solely as an insurance risk management tool. It is provided with the understanding that the member insurance companies of the Utica National Insurance Group are not providing legal advice, or any other professional services or advice. Utica shall have no liability to any person or entity with respect to any loss or damages alleged to have been caused, directly or indirectly, by the use of this information.

You are encouraged to consult an attorney or other professional for advice on these issues.

E&O RISK MANAGEMENT TRAINING Learn more E&O prevention tips, while earning CE and loss control credits. New for 2020: Our E&O Risk Management classroom seminar is now a two-part program, giving you more flexibility and convenience. Attend the morning session, afternoon session, or both.

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Register today.

800-998-9644, option 1 IABforME.com/education

COVERAGE CORNER

RESOLVE TO VOLUNTEER? WHAT’S THE RISK?

By Kevin C. Amrhein, CIC

H

appy New Year!

In the spirit of resolutions, I probably should have written this article about how you should make 2020 the year you resolve to (finally!) dedicate more time to expanding your coverage expertise. That would make sense, right? It’s a fresh start to the year, and boosting your insurance IQ ever-so-slightly each month is, after all, the purpose of this column.

In all seriousness, that’s what I was planning to do for this month. However, I read something recently that inspired me to focus this one on something different – volunteering.

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Google “most popular new year’s resolutions.” Sure, you’ll see all the usual suspects like gym memberships and language-learning software. But you may be surprised as I was that “more time volunteering” shows up near the top of many lists (or maybe that doesn’t surprise you because – unlike me – you’re not cynical).

Feeding the hungry. Helping kids.

Spending a weekend at the animal shelter.

Building a house. Coaching a team.

Raising money to help other volunteers.

JANUARY 2020

These are awesome things. In this insurance space that I occupy – constantly mired in risk, claims, catastrophes, lawsuits, and data – I often forget how truly awesome folks can be.

But this is, after all, a column about insurance. And volunteering, as awesome as it is, does not come without risk. It’s true that liability of volunteers may be limited in some cases by state or federal law. Assuming such laws will eliminate your insured’s liability or his/her need for defense is risky, especially in the absence of express advice from qualified legal counsel.

VOLUNTEER ACTIVITIES AND INSURANCE While we may not be qualified to advise insureds regarding a volunteer activity’s potentially limited liability, we should be expected to advise insureds on the insurance coverage – or lack thereof – should such an activity result in a liability claim.

In a perfect world, every organization has sufficient GL, D&O, Professional Liability, and other insurance to adequately respond to acts committed by its volunteers. As insurance professionals, we know that’s not likely.

Even insured organizations may not carry coverage sufficient to prevent the cost of a claim from spilling over to the volunteer personally.

THE ISO HOMEOWNER’S POLICY Under part b. of the definition of “business,” this policy specifically (and importantly) removes “volunteer activities for which no money is received other than payment for expenses incurred to perform the activity.” Thus, a limitation referencing “business” – such as those found in the Special Limits Of Liability section regarding property used primarily for “business” purposes or the Coverage E – Personal Liability and Coverage F – Medical Payments To Others exclusion for “business” – would not apply.

However, part a. of the definition of “business” is concerning. It broadly defines the term to include “a trade, profession or occupation engaged in on a full-time, part-time or occasional basis” and makes no reference to compensation.

Thus, a plumber who volunteers his services to low-income families for free is still engaging in his trade, and damage caused would still be subject to the policy’s “business” exclusion.

It’s also worth noting that the insuring agreement for Part E – Personal Liability specifically references the defined terms “bodily injury” and “property damage.”

Should an insured volunteer to serve on the financial committee of a civic organization and be sued personally for mismanagement of funds, the policy would not respond as such an allegation does not trigger the insuring agreement.

CONCLUSION I hope you didn’t interpret this article as an attempt to discourage folks from lending a hand. Our job is to help folks understand insurance coverage, so they can do some research, ask some questions, evaluate their risk tolerance, and make informed decisions.

Okay, one more thing … anyone reading this who has resolved to become a coverage expert in 2020 should visit Bill Wilson’s insurancecommentary.com, sign-up for his blog updates, and spend a few minutes each week learning from our industry’s most valuable mind.

That’s all for now. Until the next round … cheers!

Kevin C Amrhein, CIC, is IA&B‘s newest education consultant.

He works with our CISR and CIC programs, as well as our special topic seminars and live webinars. Catch him at one of our upcoming professional training offerings: IABforME.com/education.

LEARN MORE FROM KEVIN Earn CE credit from new hour-long webinars, featuring the always-entertaining IA&B Education Consultant Kevin Amrhein, CIC. Annoying Personal Auto Problems and Their Solutions Thursday, Jan. 16 2-3 PM

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1 credit

Drones – Insuring Innovators, Enthusiasts and Idiots Tuesday, Jan. 28 2-3 PM

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Register Today.

IABforME.com/webinars 800-998-9644, option 1

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NEWS & NOTES

IA&B EDUCATION SCHOLARSHIPS Tune into Facebook.com/IABforME on Friday, Jan. 10 when we announce our next round of education scholarship recipients.

IA&B members, staff, and guests met with Congressman Lloyd Smucker (PA-11) among other lawmakers during the 2019 Legislative Conference. Pictured left to right: Dan Gephart, Chuck Joiner, Val Gunn, Lauren Brinjac, Rep. Smucker, Jamie Thomas, Greg Gunn, and Shayne McIntosh.

JOIN US IN WASHINGTON, D.C. Save the dates of May 13-14 and plan to join us for the Big “I� Legislative Conference.

The event brings together independent insurance agents and brokers from across the country to meet with federal lawmakers and advocate for legislation impacting our industry.

Questions?

Contact IA&B Government Affairs Director Lauren Brinjac.

800-998-9644, ext. 607 LaurenB@IABforME.com

IA&B provides over $10,000 in scholarships annually to individuals and member agencies to attend our education courses. Individual scholarships are awarded to those seeking a producer license, CIC designation, and CISR designation. Member agency scholarships are provided for CIC institutes, CISR seminars, and live CE webinars.

New! IA&B has increased the funds available for licensing-exam preparation scholarships, including the classroom program in Pennsylvania and the self-study programs in Maryland and Delaware.

Learn more by visiting IABforME.com/ scholarships. Or contact IA&B Events Manager Susan Zvorsky, CISR Elite.

800-998-9644, ext. 206 SueZ@IABforME.com

IN MEMORIAM Chet Perfetto passed away on Oct. 9, 2019. A former elementary school teacher and principal, he established the Chester Perfetto Agency, Inc. in Wyomissing, PA in 1971.

Chet served on the Professional Insurance Agents of Pennsylvania, Maryland, and Delaware (a precursor to IA&B) Board of Directors from 1989 through 2000, which included a term as president of the board.

We send our condolences to his family and friends, including the staff at Chester Perfetto Agency, Inc.

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JANUARY 2020

IA&B OPENS MARYLAND OFFICE

HOW TO AVOID, REDUCE NEW ACORD FEE

Insurance Agents & Brokers (IA&B) announced the opening of an office in Maryland on Dec. 1, 2019. The office – located at 191 Main Street in Annapolis, MD – joins IA&B headquarters outside of Harrisburg, PA.

As a member benefit, most IA&B members – through our affiliation with the Big “I” – can avoid or reduce payment of ACORD’s new annual license fee.

“Along with the IA&B Board of Directors and staff, I look forward to the opportunities this new office will afford our organization and our members,” said IA&B President & CEO Jason Ernest, Esq. The location allows for easy access to the Maryland State House, and it provides a central meeting place for IA&B members and association staff.

Additionally, it solidifies IA&B’s commitment to remaining the preeminent agents’ association in the state.

As a member benefit, most IA&B members – through our affiliation with the Big “I” – can avoid or reduce payment of ACORD’s new annual license fee.

As of Jan. 1, ACORD began charging all ACORD form users (including agents, brokers, and carriers) an enduser license fee. However, the Big “I” negotiated a complimentary license to use ACORD forms for certain member agencies with an annual P&C gross revenue of less than $50 million. This applies to agencies that access ACORD forms through their agency management systems or other ACORD-authorized, third-party forms redistributors. That’s the majority of IA&B members.

Agencies who access the forms directly from ACORD now need a subscription.

For Big “I” member agencies with less than $1 million in annual revenue, ACORD offers a discount.

IABforME.com/Acord

WEBINAR ON EMAIL ENCRYPTION, E-SIGNATURES Join RPost for a complimentary, 30-minute webinar exclusively for IA&B members.

Learn how your agency can benefit from RMail® email encryption and RSign® e-signature services to track, prove, encrypt, e-sign, and more.

Tuesday, Jan. 28 11:30-Noon Watch for registration in IA&B Agent Headlines emails, or visit IABforME.com/RPost.

As a reminder, IA&B members receive a 10% discount on RMail and RSign services.

Questions? Contact IA&B Legal & Corporate Affairs Director Don Bankus.

800-998-9644, ext. 603 DonB@IABforME.com

WELCOME NEW MEMBERS

BRANDON GROUP INSURANCE & BENEFITS, LLC Harleysville, PA CYA Easton, PA MANN & GRAY INSURANCE ASSOCIATES, LLC Fruitland, MD NEWHART INSURANCE AGENCY, INC. West Pittston, PA NOVA INSURANCE SERVICES, LLC Monroeville, PA PANACEA GROUP, LLC Philadelphia, PA SHOEMAKER'S INSURANCE & FINANCIAL SERVICES, LLC Newville, PA

NEW PARTNER ILLINOIS CASUALTY COMPANY Rock Island, IL Have a question about your member benefits? Contact IA&B VP - Membership Tim Wonder at 800-998-9644, ext.

351 or TimW@IABforME.com.

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Q&A WITH

SARAH BROWN

S

arah Brown, CIC, CRM, AFIS is president and CEO of Keller-Brown Insurance Services, a full-service independent agency based in Shrewsbury, PA. She serves on the IA&B Board of Directors.

Q. You’re a fifth-generation agency owner. Tell us about your career path.

Was it always the plan for you to work in the industry and/or to join the family business?

A. Definitely not! I loved my high school English teachers, so I entered college as a secondary English education major. My freshman college professor was amazing, but part of the course was going into a pre-K classroom. I really didn’t want to teach young kids, so I couldn’t even bring myself to make the arrangements. I figured if I wasn’t motivated enough to do this as part of the course, I didn’t really want to be a teacher.

I ended up really liking my business courses and graduated with a business degree. Ultimately, the lure of the industry was too strong to resist. My first “big girl” job after college was as an underwriter trainee for Lincoln General, a trucking company. I actually got laid off a month after earning my CIC. Then they hired me back into a new loss

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control department, which was exciting to help get up and running.

Eventually, my parents had an opening at the agency, and I knew Lincoln wouldn’t be around for much longer. (In fact, it isn’t in business anymore.) I remember they said, basically, “It’s time.” And I said, “Yeah, OK.” I really don’t remember much of an interview or discussion. It was like it was a foregone conclusion.

Then they paid me less money, and I got less vacation time! That was 2008, and I’ve been here ever since.

Q. You became CEO in January 2019.

What was that transition like?

A. Slow! We’ve known for a while that I would take over for my parents, but none of us has been in a hurry for them to leave. We genuinely love working together. It’s incredible to have their wealth of knowledge if I need something.

But they’ve worked really hard, and I’d like to see them enjoy a nice retirement.

I know how long it takes to come up with a plan and to finance it, so I kind of had to force them to come up with a retirement date. Any date was fine, but I needed them to pick something. They finally did during a trip to California to visit my sister and her family.

JANUARY 2020

Part of the transition was for me to be promoted to president and CEO. It happened last year when we celebrated our 120th year in business, so that’s special! They’re still fully active, but the plan is for them to take more time out of the office. Last year they took 10 weeks of vacation. This year should be 15 weeks, followed by 20 weeks, etc., with an exit date pegged for 2023.

I really like this plan because it gives me time to adjust to them not being here, but they’re still a phone call away if I need something. The hardest part is me taking over responsibilities for two very engaged professionals on top of my own duties.

Our next challenge is to determine what will my role look like and what we need to hire for. Their time out of the office has helped us realize where I need help.

Q. Internal perpetuation of an agency can be exceptionally tricky when family is involved. What advice would you give to others who are beginning the process with their parents?

A. Start now, hire professionals, and do what’s best for everyone. Don’t make a decision just to minimize taxes, because someone is going to pay at some point.

Fortunately, we all want a win-win, and

we’re mostly on the same page about the valuation. We’ve hired professionals to help guide us in the best way for us to transition and to pay for it.

Q. The Keller-Brown team has grown to nearly two dozen. What lessons have you learned along the way about finding, recruiting, and retaining talent?

A. We’ve learned that we’re not the best at finding talent! Don’t get me wrong, we’ve onboarded some amazing new team talent, but we use a hiring firm to find, interview, test, and background check our new hires.

New hires are employed by the hiring firm for the first three months, so if it’s not a good fit, the hiring firm handles the separation. They’ve done a much better job of finding talent and only present candidates they think are a good fit. We handle the final interview. The candidate has a chance to meet their potential coworkers without the owners, so they can ask honest and candid questions. We’re not just bringing on a new hire, we’re bringing someone new into the family, so we want the input of those who will be working closest with the candidate. Since using the hiring firm, our retention has been excellent.

Training is the hardest part though.

We typically hire professionals with no insurance experience, so they have to learn several new languages: insurance, our management system, our procedures, and our many carriers’ underwriting guides and rating systems. It’s a lot for them to learn and a lot for our existing team to train. We see improvement every year a new hire is with us, but we see a marked difference in year three. Still, that’s a long time!

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continued on page 12

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continued from page 11

Q. You were among the core group who helped to establish the IA&B Futures Program and have supported the Futures Conference ever since. Why do you consider the initiative important?

A. When I started at the agency in 2008, many of our employees had been with us 20+ years. I knew they’d be retiring soon, and replacing them was daunting. Imagine 20 to 30 years of hard-earned insurance

With PIN, you have the power to give your clients more!

knowledge and Keller-Brown culture just walking out the door one day?! I know how long it takes to learn insurance, so I saw the need to get started.

It wasn’t just within our office, either.

Our insurance company partners’ underwriters and adjusters were also very experienced, but you only get experience with time. If we were going to be successful, we needed more than a youthful staff within the four walls of Keller-Brown. We needed our carriers to have a constant stream of talent come through their ranks, too.

Insurance isn’t the most obvious career choice after college. (Heck, I didn’t even want to join then!) I remember reaching out to IA&B to help with the problem because I knew I couldn’t do it alone.

One of the things that IA&B is good at is listening, and you responded in a big way! What you’ve built out of the Futures Conference is really impressive.

It wouldn’t have happened without your leadership and support. And, they get better and better each year!

Our focus begins and ends with your agency. Backed with the power of our team you have access to many of the nation’s highly sought-after commercial lines insurance companies — giving you a fuller array of coverage, better pricing, and the expertise you need to stay one step ahead of the competition.

Ask how you can become a PIN Member.

320 Granite Run Drive Lancaster, PA 17604-3320

Producernet.com 717-581-9284

Q. Keller-Brown restored and now operates in historic Odd Fellows Hall, which dates back to the 1850s! What can you tell us about the building?

A. It’s had a lot of occupants since construction in 1853. It was built by the Odd Fellows, a non-political, nonsectarian organization with the motto “Friendship, Love and Truth.” Pretty cool! After the Odd Fellows, it served as a money exchange during the Civil War (we’re four miles from Maryland and the Mason-Dixon line), a primary school, and an ice cream shop.

When my parents renovated it in the ‘90s, it was rundown apartment buildings in very poor condition. They did massive renovations but were able to maintain a lot

of the original character and some of the original artwork that was on the ceiling.

Our building has been has called "the finest example of Greek Revival Architecture in South Central Pennsylvania" by the National Historic Register. It’s something we’re very proud of, and I’ll happily give a tour to anyone who has interest.

Q. We understand that you’re passionate about agriculture and live on a farm! To what do you credit that interest? And what’s your favorite part about the farm?

A. I grew up on a gentleman’s farm, and my parents have always raised beef cattle.

I liked walking to the barn and feeding

the cows with my dad. It was peaceful, and even the smell of feed makes me smile. Growing up, I just loved being outside, building forts, and playing in the stream. I was a tomboy!

so now we’re deciding what we’re going to plant. We don’t make a living on the land, so we’re trying to be good stewards and are trying to build native habitat for the birds and bees. I’m thinking sunflowers.

On our farm, I love the seclusion and privacy. I love that my young daughter can walk outside, and I don’t have to worry about her safety. I can be doing yardwork, and she’s free to wander basically anywhere and let her imagination run wild, which it does! She can spend hours with the chickens, who now eat out of her hand.

Both my husband and I have full-time jobs, so we’re not active farmers. In years past our neighbor farmed our land. He’s retired, and we’re about to get a tractor,

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JANUARY 2020

AGENCY E&O: WHAT TO BUY AND WHY?

By Andrea Wells

When did you last revisit your agency’s E&O coverage limits? On the following pages, industry insiders discuss the process and considerations – and encourage you to heed the advice you give to your own customers.

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Buy as much [E&O coverage] as you can afford that allows you to sleep well at night.

— Jim Stoddard, of Haylor, Freyer & Coon

SHOPPING YOUR E&O? Contact IA&B. Our team will find you the programs that offer you the best value.

We work with reputable, established carriers to find top-quality coverage. Plus, when you work with IA&B, you gain the value of a team who knows the unique needs of independent agencies.

For personalized service, contact IA&B Insurance Placement Specialist David Wertz, CPIA.

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16

J

ust as the agency getting customers the proper coverage is important, so is the agency buying the right E&O coverage.

“In selling a regulated product line, such as insurance, the party that is licensed is held to a higher degree of accountability,” Rex Hickling, president of Premier Group Insurance in Denver, CO, said. “Agency owners know all too well that the E&O market is hardening, deductibles are rising, and sometimes there are baseless cases where defense must still be provided that can affect one’s eligibility and pricing.”

Proactive best practices not only help to prevent E&O claims but can simultaneously provide a better and more consultative customer experience, Hickling added. The result is coverage and protection that better meets the needs of the client.

Insurance Journal’s Academy of Insurance Director Patrick Wraight says finding the right E&O coverage at the right price is personal.

“My best advice of what to look for when buying E&O coverage is to find the best possible coverage for a price that you’re comfortable paying from a carrier that you can trust,” said Wraight. “Trusting carriers includes their financial stability,

JANUARY 2020

how long they have written E&O, and what their claims process is like.” These are the problems that all consumers of insurance, including agents, seek to solve when buying insurance.

“Obviously, an agency should review their terms, conditions, limits, and deductibles before renewal to make sure that they are getting the coverage that they need at a reasonable price,” he added.

Jim Stoddard, senior vice president at independent agency Haylor, Freyer & Coon based in Syracuse, N.Y., is responsible for purchasing all insurance programs for his firm. He recommends to other agency owners that they do for themselves exactly what they do for their clients.

“We take and consider the same advice that we give to our clients; discuss limits of coverage to purchase,” he said. “We often will ask the question or answer the question, how much should I buy by saying, ‘You should buy as much as you can afford that allows you to sleep well at night.'”

If thinking of changing an E&O carrier, think about what market conditions dictate first, he says. “Then you’ve got to be all in and you need to do your homework and review all those terms, conditions, coverages, and have a thorough conversation with whoever it is that you’re working with to minimize the risk as much as you can.” Stoddard says: “Because at the end of the day, when things go bad, and they do sometimes go bad, knowing that you’ve got the proper amounts of E&O coverage to handle whatever that disaster is” makes all the difference.

Agency E&O is an agent’s disaster plan, he says.

Agencies should also review their E&O policies when they are considering acquiring other agencies, considering a merger, or want to open other office locations, Wraight said. “It would seem to be good risk management if they review the E&O policies of any agencies that they might acquire or merge with,” he added.

Agents should make sure that their limits are appropriate and that their deductibles make sense, Wraight said.

“My best advice is to be a coverage expert,” Wraight said. “Know the policies that you work with. Be able to explain potential coverage gaps and be able to make recommendations about filling coverage gaps.”

Written by Andrea Wells, editor in chief of Insurance Journal magazine. This is an excerpt from “Agency E&O: Risk Rises Along

with Rates, Cats and Customer Switching,” first published by Insurance Journal in November 2019 and republished here with permission. © 2019 Insurance Journal

DO YOU HAVE SUFFICIENT LIMITS? E&O claims present a major exposure, so it is best to purchase as much coverage as you can afford. In the current claim environment, a limit of $1,000,000 is likely to be inadequate and can leave your agency exposed.

Points to Consider While there is no precise formula for determining the proper E&O limit, the following should be evaluated: • What are the limits of the insurance policies you are placing?

• Do you have a contractual requirement to purchase a minimum limit with companies for which you write business?

• Have you researched the cost of higher limits, and can you afford to purchase a higher limit?

• What is your agency’s value, and does your E&O limit sufficiently protect it?

Insurance agents strive to protect their clients’ assets. It makes good sense to take the same level of care in protecting your own assets by purchasing adequate E&O limits.

-P rovided by Adam Kelly, Utica Director of E&O Claims and Claims Attorney

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PICS & POSTS

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JANUARY 2020

THANK YOU PARTNERS PROGRAM

PARTNERS PROGRAM

The IA&B Partners Program allows companies to support and connect with independent insurance agents and brokers in Pennsylvania, Maryland, and Delaware. Through their sponsorship, Partner companies allow IA&B to offer the programs and services that help member agencies succeed.

The IA&B Partners Program allows companies to support and connect with independent insurance agents and brokers in Pennsylvania, Maryland, and Delaware. Through their sponsorship, Partner companies allow IA&B to offer the programs and services that help member agencies succeed.

Thanks to these Platinum Partners for supporting the independent agent network.

Learn more by visiting IABforME.com/Partners or calling 800-998-9644, option 0.

PLATINUM PARTNERS ACUITY Donegal Insurance Group Erie Insurance Group Farmers Mutual Fire Insurance Company of Marble IA&B Service Group Millers Mutual Group Penn National Insurance Plymouth Rock Assurance The Main Street America Group

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Your support helps independent agents succeed and their agencies become more profitable – a win for your company and the independent agency channel.

Learn more by visiting IABforME.com/Partners or by contacting us.

Jess McWilliams Alane Fagan Education Senior Director Events Manager 800-998-9644, ext. 503 800-998-9644, ext. 512 JessicaM@IABforME.com AlaneF@IABforME.com

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Cyber Coverage – Data Breach & So Much More

1:00 – 4:00 PM

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Understanding Social Security & Medicare

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Life Insurance to Hedge Against Financial Losses

9:00 AM – NOON

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13

E&O Road Map – Comm. Liability Gaps/Risk Mgmt.

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Homeowners Coverage Concerns for Modern Family

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Insuring Modern Transit Risks

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Welcome to the Future

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Culture, Ethics and E&O

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Insuring Your Side Gig

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Contributing editors: Jennifer Ross, Megan Fioretta, Melissa Telesha