Primary Agent - June 2012 - DE Edition

DELAWARE

ALSO INTHISISSUE: ________________ Rationale for account reviews Defining “use” of an auto 20 tech-driven trends

I’m celebrating our 100th year by planning for our next 100 years.

Jason Bogart, CPCU, ARM, Vice President of Branch Operations Our future will be marked by the relationships we forge with you—the independent insurance agents who represent us. You’re the reason we’ll continue to investigate new market opportunities. Why we’ll develop competitive products. Why we’ll maximize the use of new technologies.

Why we’ll emphasize ongoing professional development for our staff.

By helping you profitably and efficiently grow your agency, EMC Insurance Companies will continue to serve you and your customers today and well into the future.

Valley Forge Service Branch: 800.333.3622 | Home Office: Des Moines, IA

www.emcins.com © Copyright Employers Mutual Casualty Company 2011 All rights reserved

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Contents PRIMARY AGENT MAGAZINE Rationale for account reviews Making account reviews part of your agency’s workflow will enhance sales and minimize E&O exposure. Seems like an unbeatable combination, doesn’t it?

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Page 8 I thought that was covered!

Jerry Milton shares 10 commonly overlooked coverage gaps. Take a gander, then educate clients on their exposures and options now — before you hear, “I thought that was covered.”

Page 12

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20 tech-driven trends Now that 2012 is well underway, be ready for these 20 technology-driven trends to continue to create both disruption and opportunity for the business world.

Page 24 Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.

Get social with IA&B

In every issue 4 5 6 8 10 20

Chair of the Board’s Message Member FAQ State News Preventing Errors & Omissions Coverage Corner Tools You Can Use

21 23 24 28 28 28

Glance at Events IA&B Partners Technology Update Advertisers Index Classified Ads Last & Least

Subscriptions: Non-member price: $2.25 per copy or $15 per year.

All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request.

Address inquiries to: Primary Agent Editor 5050 Ritter Road Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office.

Postmaster: Send address changes to above address.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2012-6) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

Copyright 2012. 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 is 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 and 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 the 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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Your Business Is Our Business!

Board of Directors

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P

Officers Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P Chair of the Board West Chester, Pa. Norman F. Basso, CPCU Vice Chair of the Board York, Pa.

Chair of the Board’s M

E

S

S

A

G

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David Rosenkilde, CIC Immediate Past Chair of the Board Reisterstown, Md.

Keeping your cool

Members Joyce M. Bailey, CIC, CRM, CPIW Newark, Del. Henry “Butch” Bradley, Jr. Forest Hill, Md. Timothy P. Burris Mifflintown, Pa.

Welcome to June! Despite the rising Fahrenheit — and tempting golf courses — summer days are far from lazy in most independent agencies. And at IA&B, it’s much of the same.

Your agents’ association is plowing through the summer months … monitoring potential tripping hazards, so members can keep their cool.

N. Lee Dotson, CIC, AAI Wilmington, Del. John L. Frankenfield Telford, Pa.

Legislative roadblocks? Fuhgettaboutit. The IA&B government affairs team is stationed in Dover and Harrisburg, monitoring the end-of-session legislative fury as you read this.

G. Greg Gunn, CIC Lemoyne, Pa. John B. Hollister Milford, Pa. Diana M. Hornung Hanby, ACSR Wilmington, Del. Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa.

Compliance pitfalls? Avoid ‘em with the association’s recently launched on-demand, insurance department-vetted seminars.

Participants learn how to avoid the most common regulatory missteps in Maryland and Pennsylvania.

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Robert S. Klinger, LUTCF, CPIA Germantown, Md. Douglas A. Loesel, CPCU Erie, Pa. Michael F. McGroarty Sr. Pittsburgh, Pa. Ann Gallen Moll, CIC Reading, Pa. April E. Ressler, CIC Altoona, Pa.

E&O stumbling blocks? They’re no match for IA&B’s resources. Take this month’s Primary Agent magazine feature article as an example: Jerry Milton shares 10 commonly overlooked coverage gaps.

When the heat (or the air conditioning, for that matter) is on, IA&B is there. Take advantage of your membership.

Best,

Scott C. Rogers, CPIA* York, Pa. David B. Wasson Sr., CIC State College, Pa. Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del.

Robert B Hall, ChFC, CLU, CPCU, ARM, ARM-P

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

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Member FAQ QUESTION: What is the difference between a Write-Your-Own flood policy and a Mortgage Portfolio Protection Program policy?

ANSWER: There is a significant difference between the two.

WYO Policy: This program is simply the National Flood Insurance Program (NFIP) administered by a Write-YourOwn (WYO) carrier. The policy conditions, eligibility and pricing are all determined by the NFIP. Mortgage Portfolio Protection Program (MPPP) Policy: The MPPP is the program used for forceplacement policies. Properties that are required to carry flood insurance and for which the borrower has not provided acceptable proof of flood insurance to the lender eventually end up in the MPPP. Generally, the MPPP is not the best solution for the borrower. It may be adverse to the mortgagor for several reasons: (1) The MPPP premiums tend to be significantly higher than the WYO program, with the cost “rolled” onto the mortgage. The MPPP does not require as much underwriting information. For example, rating will not take any elevation certificate into consideration. The “blanket” rate applied tends to result in a much higher premium than the NFIP policy’s: three to five times higher (if not more); (2) While it is still a dual-interest policy (covering both the homeowner and the lender), it is not unusual for the mortgagee, in the process of force-placing coverage, to cover only the amount of principal still owed rather than insure the property based on its replacement cost. In case of a claim, the mortgagee will be indemnified, and there will be no proceeds left for the homeowner.

Before placing the borrower into the MPPP, three separate instances of notification are required. w The first notice advises of the requirement to carry flood insurance and of the right to challenge this

requirement. It advises the mortgagor that if no response is received within 45 days of the notice, a force-placed policy will be written; w The second notice is sent 30 days later, if no response has been received from the mortgagor.

It reiterates the content of the first notice, and informs that only 15 days remain before force-placement; w The third notice is sent if no response is received and advises of placement of policy, including a flood Dec page.

Needless to say the MPPP is intended as a last resort solution, when mortgagors have failed to respond to the notifications that are required as part of the MPPP. Generally, the receipt of the Dec page spurs the mortgagor into action. Once the borrower realizes the premium charged, he often requests cancellation of the policy to replace it with a more affordable, standard NFIP option.

Bottom line: If flood insurance is required by the mortgagee and the homeowner drags his feet about securing a policy, it will not help him in the long run, but only create more headaches. If however, you run into questionable force-placement, make sure that it was done properly. More information on the Mortgage Portfolio Protection Program is available in the NFIP manual: http://www.fema.gov/pdf/nfip/manual201110/ content/10mppp.pdf.

DO YOU HAVE A QUESTION? E-mail it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message.

You can also fax your question to 717-795-8347. We look forward to answering your questions!

State News Primary Agent | June 2012

Consequences of a property loss

Agents descend on Capitol, rub elbows with legislators

DAIAB members flank Sen. Tom Carper.

The “consequential” losses in a covered property claim come in a variety of forms and may or may not be covered by policy endorsements. The Jerry Milton Seminar Series returns this summer with Consequences of a Property Loss, the first of two new seminars from perennial favorite Jerry Milton, CIC. Jerry will bring his vast knowledge of coverages along with his unique ability to offer anecdotes that make it more meaningful for the class. The second leg of the series begins in September with Employment Relationships — Are Both Sides Covered? www.iabgroup.com/Milton

Delaware’s Congressional delegation in Washington, D.C. recently gained independent agents’ perspectives on pending legislation and regulation.

Nearly a dozen DAIAB member agents in late April met with Rep. John Carney, Sen. Thomas Carper and Sen. Christopher Coons as part of the annual IIABA (Big “I”) National Legislative Conference. DAIAB also held a legislative reception, sponsored by Travelers.

Hot topics included: w The importance of an agent commission carve-out in calculating medical loss ratios w The critical nature of a long-term reauthorization of the National Flood Insurance Program w Support for NARAB II legislation, which would streamline non-resident producer licensing w Opposition to any expansion of the scope of federal insurance regulation through the newly created Federal Insurance Office.

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Power Hour: save the date — and the link

Work speeds up as Delaware legislative session winds down The state legislature’s pace is picking up as the last day of session, June 30, nears. On the table are several bills of note, including Department of Insurance priorities and legislation to allow electronic notices of insurance policies.

The DAIAB government affairs team is stationed in Dover, poised to advocate on members’ behalf.

Watch your inbox for updates: Agent Headlines will track activity at the Capitol, and Capitol Connection will provide a complete session recap, including how the state budget and newly passed legislation will impact the independent agency community.

DAIAB members have access to a wealth of agency management resources at www.iabgroup.com.

And thanks to the June 20 Power Hour webinar, Online Goldmine, they will know what they are and how to find them.

DAIAB’s Power Hour series provides free, members-only webinars on timely topics. Past webinars covered coverage issues for vacated properties and concurrent causation. Members can access a complete resource library online and watch past Power Hours on demand. www.iabgroup.com/PowerHour

Convention to combine networking, CE and politics

DCRB releases new experience rating calculator

DAIAB’s 55th annual convention will allow members to have fun — plus earn CE, network and preview the primary election — in the sun.

The June 6-7 event in Rehoboth Beach is expected to draw 250 independent agency staff and company personnel.

This year’s agenda includes a government affairs forum involving a panel discussion with state insurance commissioner candidates, and CE courses taught by nationally recognized speakers Jerry Milton and Bettye Buffington.

Playing the “what if” game with clients is easier — and more accurate — thanks to a new experience rating calculator.

Spurred by agent feedback, the Delaware Compensation Rating Bureau (DCRB) developed the calculator to help agents review and discuss a client's claim activity and how it impacts the client's experience mod. The tool also can be used if the mod has not been produced to get an indication, assuming all things remain the same.

DCRB Circular No. 874 announces the release of the experience modification calculator and provides information on how to use the tool.

Watch Agent Headlines and future issues of Primary Agent magazine for a recap.

http://www.dcrb.com/dcrb/ circulars/d_pdf/de874.pdf [7]

Earthquake knowledge puts agents, insureds on solid ground Last August’s earthquake left many along the East Coast shaking in their boots. Now’s the time to take a crash course in earthquake risk and insurance — and then educate your clients.

DAIAB’s online Disaster Central repository includes peril-specific resources. Members can log onto www.iabgroup.com to determine regional propensity to earthquakes and to locate consumer (business owner and homeowner) endorsement and policy information. www.iabgroup.com/disaster

Reminder of DAIAB address change Sending DAIAB snail mail to no avail?

Then update your database to ensure communication reaches DAIAB. The association eliminated its P.O. Box and changed its four-digit ZIP code.

New mailing address: 5050 Ritter Road Mechanicsburg, PA 17055-4879

WELCOME

New Members A L Watson Insurance & Financial Agency LLC Wilmington, Del.

Preventing Primary Agent | June 2012

ERRORS AND OMISSIONS

DO YOU PERFORM AN ACCOUNT REVIEW FOR EACH OF YOUR PROSPECTS/CLIENTS?

CURTIS M. PEARSALL CPCU, AIAF, CPIA Curtis M. Pearsall, CPCU, AIAF, CPIA, president of Pearsall Associates Inc. and special consultant to the Utica National E&O Program, supplied this article.

Insurance Agents & Brokers Service Group Inc. is the exclusive agent for the Utica E&O program in Delaware, Maryland and Pennsylvania.

For questions regarding this article or your E&O coverage, contact IA&B at 800-998-9644 or iab@iabgroup.com.

Over the past few months, several insurance trade publications have recognized agencies on a host of best practices that have been instrumental in those agencies’ success. One best practice recently cited spoke to the value of performing an account review for each client or prospect. For several reasons, this is a tremendous tool that accomplishes many objectives.

Serving and educating your customers First and foremost is the customer service/customer care associated with this objective. Performing a review allows the agency to interact with each client to get an update on the client’s exposures. A client’s exposures can obviously change and, unfortunately, some changes can result in exposures not being properly insured. Your agency can help educate the client by discussing the changing exposures – and securing coverage – before a loss

occurs as opposed to after.

Sounds like a smart approach, doesn’t it?

Look at it from the perspective of an insurance consumer. As you look at insuring your various exposures, would you rather be a client of an agency that took the time to make sure there are no surprises at the time of a loss, or would you prefer to be with an agency you rarely, if ever, heard from, that simply renewed your policy year after year, and left it up to you to contact them with any issues?

Looking at personal lines, some recent surveys have indicated that insurance agencies write, on average, fewer than 1.5 policies per account. When you consider that at a minimum the average personal lines account has at least six to eight policy opportunities, this indicates there is some real potential to write business. In all likelihood, agencies that perform an

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agency audit/review have a much higher average number of policies per account. Thus, another solid reason for performing an annual review – you will write more business. _____________________

Your sales will be enhanced, and your E&O exposure will be minimized.

Seems like an

unbeatable combination, doesn’t it? _____________________

Performing an annual review with each client must be part of your agency’s culture. It is not suggested, though, doing it for some customers and not others. A recommended approach is to offer it to

every client and, if a client does not want the review, that should be the client’s decision.

This “offer” would certainly be part of the agency’s defense if an Errors & Omissions claim were to develop and the customer alleged an uninsured exposure. One of the agencies cited for this best practice actually requires the review be done and will not take on a prospect as a client unless the account agrees to go through the review process.

For that agency, it is evident the culture involves establishing and building a relationship with each client.

Without a doubt, this “investment” philosophy should be reflected rather positively in the agency’s renewal retention results.

Getting it done There are numerous ways to perform an annual review. The most effective involves physically sitting down with the customer for a face-to-face discussion. This could present some logistical issues because of the customer’s work schedule, so if your agency is open on Saturdays, it would allow the customer to stop in. Another approach is conducting the review over the phone. Once again, this might present some logistical issues because of work schedules. Plus, because these reviews could last upwards of an hour, it may be difficult for the customer to allocate the time during the work week.

It is obviously extremely important to explain clearly the purpose of the review, emphasizing it is designed for the customer to understand his or her current coverage and to discuss any uninsured exposures.

Another approach – and probably a more realistic one – involves sending the customer a form which provides a

host of questions for the customer to consider, such as: w Do you have any collectibles, fine arts, stamps, coins, etc.? w Do you have a business in your home? w Have you installed a home fire or security alarm?

Some questions deal with loss-control areas that could result in the customer receiving discounts on current coverage. Other questions look to uncover exposures where the current policy – for example, a Homeowners’ policy – may not be sufficient to provide the necessary coverage.

Where can your agency get a form containing these questions? Many of the various exposure analysis checklists (see sidebar) contain these questionnaires, which can be easily combined with a cover letter or e-mail and sent out.

An unbeatable combination Are you legally required to perform this review? No. In most, if not all, states, the legal standard for an insurance agent does not require this type of review. In fact, many states essentially hold the agent to the level of an “order taker,” and the agent’s role is to provide the coverage the customer specifically requested. With this approach, the potential for a customer suffering an uninsured loss is probably more likely.

If you truly want to assist your customers in protecting their assets, an account review is a great tool. Your sales will be enhanced, and your E&O exposure will be minimized. Seems like an unbeatable combination, doesn’t it?

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Account review questionnaires Prefer a mailing over a meeting? Curtis Pearsall recommends sending a questionnaire to uncover exposures (and discounts) and points to exposure analysis checklists to find questions.

IA&B members enjoy discounted access to a risk analysis system which includes extensive coverage checklists. Simply log onto the Web to learn more.

Delaware: www.iabgroup.com/de/rough_notes Maryland: www.iabgroup.com/md/rough_notes Pennsylvania: www.iabgroup.com/pa/rough_notes

Coverage Primary Agent | June 2012

CORNER

WHEN ARE YOU “USING” AN AUTO? JERRY M. MILTON, CIC Jerry M. Milton, CIC teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also an education consultant for IA&B, working with CISR, CIC and continuing education programs.

Many, many years ago — actually it was 1963 — in Brenneman v. St. Paul Fire & Marine Ins. Co., the Pennsylvania Supreme Court was faced with determining what is an “accident.” In this case the court stated the following: What is an accident?

Everyone knows what an accident is until the word comes up in court. Then it becomes a mysterious phenomenon, and, in order to resolve the enigma, witnesses are summoned, experts testify, lawyers argue, treatises are consulted and even a conclave of 12 worldknowledgeable individuals agree as to whether a certain set of facts made out an accident, the question may not yet be settled and it must be reheard in an appellate court.

Listen up, Pennsylvania Supreme Court: We may need your help. What is “use”? The American Heritage Dictionary has 10 separate definitions of “use.”

Black’s Law Dictionary uses a full page and a half to define “use.” Both American Heritage and Black’s state that “use” means “to put into practice, to employ, to utilize.”

Sounds simple, doesn’t it?

It should be, but then an insurance policy is introduced with the word “use” or “using,” and the issue can get complicated.

Who is an insured under the Personal Auto Policy includes the following individuals:

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You and your family members for the ownership, maintenance or use of any auto or trailer; and Any person using your covered auto.

The Business Auto Policy defines insured to include: Anyone else while using with your permission a covered auto you own, hire or borrow.

For individuals, if the loss arises out of the use of an auto, call your personal auto insurer. Likewise for businesses: Call your auto insurer. If you’re not using an auto, call your Homeowners’ or CGL insurer. Therein lies the problem. When are you “using” an auto?

The following cases are a few examples of “use of an auto”: w An automobile driver who bit a police officer on the arm during a traffic stop did not qualify as use of an auto. (Colon v. Liberty Mutual Ins. Co., NJ Superior Court, Jan. 20, 2012)

w Grabbing the steering wheel to annoy your girlfriend, while she was driving, did not qualify as use of an auto. (Sunshine State Ins. Co. v. Jones, Florida Court of Appeal, Jan. 18, 2012)

American Family moved for summary judgment and the trial court agreed by reasoning, “There is a difference between loading and unloading a vehicle and loading and unloading a gun while standing near the vehicle.”

w Attempting to lift a portable toilet onto the top of a deer stand by using a pickup truck and a pulley system qualified as use of an auto. (Hays v. Georgia Farm Bureau Mutual Ins. Co., Georgia Court of Appeals, Feb. 14, 2012)

The Wisconsin Supreme Court’s decision included the following statements:

w A passenger who opened the rear door of a van and jumped out while it was traveling over 50 mph qualified as use of an auto. (Colony Ins. Co. v.

Comprehensive Rehabilitation Centers, Eastern District of Michigan, Dec. 21, 2011)

The relevant test for coverage, therefore, is whether the ‘use’ of the vehicle was sufficiently connected with the accident….

Wisconsin courts have consistently held that the use of a truck for hunting is reasonably consistent with the inherent nature of the vehicle.

Therefore, using the van to transport rifles and ammunition to facilitate hunting was a reasonable

w Individuals who suffered neurological injuries due to exposure to carbon monoxide from a car left running overnight in a garage qualified as use of an auto. (New London County Mutual Ins. Co. v. Nantes, Supreme Court of Connecticut, Feb. 21, 2012)

Schofield argues that loading a gun into a van includes the preparatory act of ejecting the shells from the gun. Therefore, the discharge of the gun that caused Schofield’s injuries arose out of the use of a vehicle.

We agree with Schofield.

What constitutes “use” of an auto?

There is certainly no consensus among the courts.

Each case is determined by the facts of that particular case as well as the interpretation of the word “use” by the court hearing the case.

Y’all take care!

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Get MBG Real people

My personal favorite is the case of Schofield v. Smith, which was decided by the Wisconsin Supreme Court on July 31, 2003.

James Schofield was injured when Raymond Smith’s gun discharged as he was unloading it before placing it in Schofield’s van. Schofield filed a claim against Smith, and because Smith had an auto liability policy with American Family, Schofield moved to join American Family as a defendant, alleging his injury arose out of the use of an auto.

’use’ of this vehicle, and loading and unloading of such materials and equipment, which is a normal incident to such use, constitutes the ‘use’ of the vehicle.

REAL response At MBG, your clients get claims adjusters with a real sense of compassion...our team earned a 97.5% satisfaction rate on claim service surveys during the height of the 2011 tropical storm season.

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REAL experience REAL solutions REAL support MUTUAL BENEFIT GROUP Huntingdon, Pennsylvania www.mutualbenefitgroup.com

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COVERAGES

I thought that was covered!

10 coverage gaps that slip through the cracks

On the following pages, Jerry Milton shares 10 commonly overlooked coverage gaps (in no particular order). Take a gander, then educate clients on their exposures and options now — before you hear, “I thought that was covered.”

Primary Agent | June 2012

H

ow many times have we heard, or even said, “I thought that was covered!” All of us know that insurance policies cover some losses, exclude some and limit others. However, to compound the issue, losses that are covered may be excluded by endorsement, and losses that are excluded or limited may be covered by endorsement.

The exclusions and limitations that are contained in the policy, or added by endorsement, create gaps in coverage.

Can these gaps be filled? Not always, but usually the answer is, “Yes they can.” How do we fill the gaps? Maybe by endorsement, or maybe an additional policy is needed.

Before we can recommend the needed endorsements or any additional policies of insurance, we have to recognize the gaps in coverage. If we don’t, we might hear or say, “I thought that was covered!”

What are the most overlooked gaps in coverage? I’m sure all of us have our own list. The following is a brief discussion of the areas I feel could create major gaps in your clients’ insurance programs.

Computers, electronic data and the Internet It is estimated that over 30 million U.S. households pay their bills online; over 50 million U.S. households bank online; over 12 trillion emails are generated annually in the United States.; online sales total over $1 trillion annually; and there are 150 million websites worldwide that sell a product, provide a service or distribute information. In other words, we have all become dependent on our electronic equipment and the Internet.

The exposures created by the Internet and electronic commerce are numerous — damage to the equipment, software or electronic data, loss of income and extra expense due to a shutdown of the system, theft of money or intellectual property, extortion, loss of market share, damage to another party’s software or electronic data, theft of customers’ confidential data, invasion of privacy and identity theft to name a few.

Do not rely on the standard Commercial Property and Commercial General Liability (CGL) policies to cover these exposures. The Commercial Property forms limit any loss to electronic data to an annual aggregate of $2,500 and any business income or extra expense loss resulting from interruption of computer operations to an annual aggregate of $2,500. The CGL policy excludes any property damage to or loss of use of another party’s electronic data.

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Can’t get enough Jerry?

IA&B’s Jerry Milton Seminar Series returns this summer.

Coverages expert Jerry Milton, CIC, (and author of this article, as well as the monthly Primary Agent Coverages Corner column) will make his rounds over the next two months to deliver a full-day program on the nuances of covered property. He will present his Covered Property — Direct Damage & Consequential Loss seminar at locations throughout the tri-state area.

July 10 – Baltimore, Md. July 11 – Newark, Del. Aug. 1 – Allentown, Pa. Aug. 2 – Mechanicsburg, Pa. Aug. 15 – Philadelphia, Pa. Aug. 21 – Pittsburgh, Pa. www.iabgroup.com/Milton

COVERAGES

The E-Commerce endorsement (CP 04 30) can be attached to the Commercial Property forms, and the Electronic Data Liability endorsement (CG 04 37) can be attached to the CGL policy. But these endorsements are very limited.

Several insurers have developed property and liability policies to address the exposures created by the Internet and e-Commerce activities. These policies that specifically address the Internet and e-Commerce exposures should always be recommended to many of your clients — both large and small.

More where this came from …

Ponder additional coverage conundrums on the IA&B website.

Resources, including archived Jerry Milton articles, are available by selecting “coverages” from the left-hand menu bar.

Pollution Back in the 1970s and ‘80s, Congress decided to clean up our air, water and land. During that period of time, they passed act after act after act. These acts, in many cases, established who could be held liable for pollution cleanup and damages. In some cases these acts also established financial responsibility requirements for certain businesses. Probably the best known of these acts is the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly called the Superfund.

Because of all the publicity surrounding these acts, insurance agents and their clients took a long, hard look at their General Liability policies. Prior to the introduction of the Commercial General Liability (CGL) policy in 1984-85, the old Comprehensive General Liability policy covered bodily injury or property damage arising out of a “sudden and accidental” discharge or release of pollutants. That coverage ceased with the introduction of the CGL policy in the mid 1980s.

The CGL policy we write today has very limited coverage for a pollution claim. Any discharge or release from the insured’s premises is excluded except for a hostile fire or smoke, fumes, vapor or soot from the building’s heating, cooling or dehumidifying system or hot water heater. There is coverage

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for products-completed operations claims and limited coverage for contractors’ operations. However, this limited coverage is often taken away completely by adding the Total Pollution Exclusion endorsement (CG 21 49), which is used by many insurers for certain risks (contractors, manufacturers, processors, etc.).

The Business Auto policy also has some limited pollution coverage. An accidental discharge from the auto’s fuel system or a covered auto striking the container of the pollutant away from the insured’s premises is covered. However, the cargo exposure (hauling of the pollutant) is excluded unless the Pollution Liability — Broadened Coverage For Covered Autos endorsement (CA 99 48) is added.

The pollution exposure for many insureds is increased by the very broad definition of “pollutants” in the CGL and Business Auto policies.

“Pollutants” mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

Waste includes materials to be recycled, reconditioned or reclaimed.

Many of our clients have a pollution exposure, and they don’t know it, and we don’t recognize it. Over the past few years I’ve been involved in

Primary Agent | June 2012

several E&O claims against agents for failure to recommend pollution coverage, including fumes from a disinfectant used in a restaurant’s restroom, fumes from a poultry-rendering plant and an excavation contractor cutting an underground oil pipeline.

Pollution Liability policies are needed just as much today as they were 20 or 30 years ago.

Also, don’t overlook the mold exposure. Some insurers will add coverage for mold to their Pollution Liability policies by endorsement.

Damage to your work Exclusion l. of the Commercial General Liability (CGL) policy states the following: “Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations” hazard.

This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

This “faulty work” exclusion has become a highly litigated issue throughout the country.

Courts across the country are split on the issue of whether claims alleging construction defects are covered by the CGL. The primary battle has been whether faulty workmanship constitutes an accidental “occurrence.”

If you live in Pennsylvania, you’re sick and tired of

[ 15 ]

hearing “Kvaerner” and “Gambone Brothers.” In both cases the Pennsylvania Supreme Court (Kvaerner, 2006) and the Pennsylvania Superior Court (Gambone, 2007) ruled that faulty workmanship did not constitute an accidental occurrence.

Pennsylvania was the flag bearer, but very few other state supreme courts have followed their lead. Most state supreme courts have taken the opposite position and ruled that faulty workmanship constitutes an occurrence. These states include Texas, Indiana, Georgia and Mississippi. The state legislatures of four states — Arkansas, Colorado, Hawaii and South Carolina — have enacted legislation requiring CGL policies to contain a definition that faulty workmanship constitutes an occurrence. However, some of these laws are being challenged by insurers.

Faulty workmanship is an occurrence in Indiana but is not an occurrence in Kentucky.

Louisville, Ky. sits on the Ohio River. Look north from downtown Louisville and you see Indiana. If a contractor builds a building in Indiana and another building in Kentucky and the electrical subcontractor does faulty work resulting in a fire, the resultant damage would be covered under the contractor’s CGL in Indiana, but excluded in Kentucky.

Same policy, same insurer.

What a mess!

Vanishing CGL Completed Ops coverage Producers (including non-residents) who sell CGL in Pennsylvania, take note: Contractors’ CGL policies probably do not cover the Completed Operations exposure.

The 2006 Kvaerner Metals v.

Commercial Union Insurance Co. decision was the first to upset Pennsylvania’s long-held exception that allowed CGL coverage for subcontractors’ faulty work. Since then, a string of cases have solidified and expanded the interpretation to include consequential damage.

IA&B members have access to a plethora of resources (think: webinar, Q&A, three-part explanatory series and more) to understand the issue and how to respond. Learn more online. www.iabgroup.com/pa/ faulty_work

COVERAGES

Flood and earthquake: Much of IA&B’s tri-state footprint is vulnerable to both.

Any agent insuring a contractor must require the insurer to endorse the CGL policy to stipulate that faulty workmanship is an occurrence.

Otherwise, that contractor will have little or no completed operations coverage in some states, or the insurer could argue that faulty workmanship is not an occurrence. Don’t accept “no” or “don’t worry about it” for an answer.

Water backup: Remember Hurricane Irene and Tropical Storm Lee?

Tenant-occupied building insured by the owner

Need I say more?

Obviously there are many other coverage gaps that can jump up and bite us. The following is partial a list of additional coverages we may overlook and therefore find ourselves having to respond to, “I thought that was covered!” Some of these issues may be addressed by endorsement. However, others may require an additional policy.

Personal injury coverage under Homeowners’ policy: Many of us have greater personal injury exposure (think: libel, slander, defamation, etc.) in our personal lives than in business.

Increased loss assessment: Condominium, townhouse and neighborhood association assessments for property or liability losses are not covered by the association’s policies.

-JM

Your insured has leased a building. The building owner is insuring the building. All your insured (the tenant) needs is coverage for his or her business personal property, loss of income and liability — right? Not necessarily!

The key question is, “Did the building owner waive recovery against the tenant?”

If not, if the tenant damages the building and the owner’s insurer pays for the loss, that insurer will have the right to seek recovery from the tenant.

We call that “subrogation.”

The tenant’s Commercial General Liability (CGL) policy excludes damage to property rented to or occupied by the insured, except for damage caused by a fire. Fire only! We call that “Fire Legal Liability” or “Fire Damage Liability.” Are there other ways the tenant can damage the building. How about the tenant’s employee running a forklift through the side of the building

[ 16 ]

Primary Agent | June 2012

or the tenant’s employee running a truck through the side of the building? Both of these losses resulted in E&O claims because the tenants discovered they did not have any coverage when the building owners’ insurers subrogated against the tenants.

What’s the solution? The best option is to ask the building owner to include a waiver of recovery in the lease. The owner should consider a cross waiver — the owner waives recovery against the tenant and the tenant waives recovery against the owner. If the lease doesn’t include a waiver, the next option is to ask the tenant’s insurer to add Tenants’ Legal Liability coverage to the CGL. Many insurers have their own proprietary form to provide this coverage. The third option is to write a Commercial Property Legal Liability Coverage Form, which will cover damage to the building if caused by a covered cause of loss and results from the insured’s negligence.

Endorsing the CGL will not take care of the auto exposure. The Business Auto policy excludes property damage to property in the care, custody or control of the insured. Will the insurer endorse Voluntary Property Damage? If not, the only option may be the Commercial Property Legal Liability Coverage Form.

CGL aggregate limits Two parties get together; decide to enter into some type of relationship; and sign a contract.

This contract may be a

construction agreement, supply agreement or a lease of premises or equipment. The indemnitee (the party to whom a duty is owed) will require the indemnitor (the party who owes the duty) to purchase and maintain certain policies of insurance with stipulated minimum limits (e.g., $1,000,000 occcurrence/ $2,000,000 aggregate), and these limits must be “site specific,” “job specific” or “location specific.”

The Commercial General Liability (CGL) policy has two aggregates — General and ProductsCompleted Operations. These aggregates are the total that will be paid for any and all losses during the term of the policy. In order to satisfy the contractual requirements of “site specific,” “job specific,” or “location specific,” the Designated Construction Projects General Aggregate Limit endorsement ((CG 25 03) must be added to a contractor’s CGL and the Designated Locations General Aggregate Limit endorsement (CG 25 04) must be added to the CGLs of insureds with multiple locations. With these endorsements attached, the policy’s General Aggregate (not Products-Completed Operations) applies separately to each project or location.

No personally owned autos Small business owners frequently purchase and title all their autos in their companies’ names. These autos – those used in the business and those used by the owner and family members — are insured

[ 17 ]

under the company’s Business Auto policy. Who is an insured under the Business Auto policy includes the named insured for any covered auto and anyone else while using with the named insured’s permission a covered auto the named insured owns, hires or borrows. Therefore, the owner and family members are covered only while using an auto owned, hired or borrowed by the company. They have no coverage for any auto they hire or borrow.

In order to cover the owner and family member for their nonowned auto exposures, we add the Drive Other Car — Broadened Coverage For Named Individuals endorsement (DOC) (CA 99 10).

What coverages — Liability only or Liability, Medical Payments, UM/UIM and Physical Damage?

That’s the coverage they’ll have for a rented or borrowed car.

However, the major question is, “Who do we schedule on the endorsement?” The DOC covers scheduled drivers only — it is not a family endorsement. What about children who reach the age of 16 during the policy term, get their license, but are not added?

What about children who decide to drive a friend’s car when they’re only 14 or 15 years old?

The best solution is to convince the business owner to title one auto personally and then purchase a Personal Auto policy.

The Personal Auto policy covers family members — scheduled or not, licensed or not — for the use of any auto.

COVERAGES

Ordinance or law 101 Access IA&B’s online resource on ordinance or law exposure to learn what it means for producers and a sample letter for clients. www.iabgroup.com/de/ ordinance_law www.iabgroup.com/md/ ordinance_law www.iabgroup.com/pa/ ordinance_law

Company-furnished autos Many companies provide their key employees a companyowned auto for their personal use as a fringe benefit. These autos are insured under the company’s Business Auto policy. The employee is an insured under the Business Auto policy while using that company auto with the named insured’s permission. Who is permitted to drive that company car — employee only, employee and spouse, employee and family members, or anybody? Any company that provides a company car to an

employee and does not place restrictions on its use is exposing its Business Auto policy and company assets to all types of exposures.

Smart companies restrict the use of the company car to the employee or the employee and spouse. What if the employee, a family member or someone else uses the auto outside the scope of permission? They are no longer an insured under the Business Auto policy.

The employee has a Personal Auto policy insuring the family’s personally-owned autos. The Business Auto policy has denied coverage.

What about the Personal Auto policy? Sorry! The Personal Auto policy excludes coverage for any auto furnished or available for the regular use of the insured. When an insured is furnished a company auto, always add the Extended NonOwned Coverage — Vehicles Furnished Or Available For Regular Use endorsement (PP 03 06) to the Personal Auto policy. This endorsement deletes the liability exclusion for “furnished or available for regular use.”

Vacant buildings A building doesn’t have to be vacant to be “vacant.” That’s according to the terms of the Commercial Property Building And Personal Property Form.

Under the Vacancy Condition of that form, a building is

[ 18 ]

vacant unless at least 31 percent of its total square footage is rented and/or used for its customary operations. If the building is vacant for more than 60 consecutive days, then vandalism, sprinkler leakage, glass breakage, water damage and theft are excluded and indemnification for any other covered cause of loss is reduced by 15 percent.

How many of you know the “vacancy” status of your insured commercial buildings?

In today’s economy many building owners have lost several of their tenants. Their buildings may be partially occupied but, at the same time, be “vacant.” What are your options? Maybe the insurer will attach a Vacancy Permit endorsement, or you may have to write a new policy with a much higher premium.

Extended business income The Business Income And Extra Expense Coverage Form agrees to pay for loss of income and/or extra expenses incurred during the “period of restoration.” In other words, you’re covered while there is a suspension of operations in whole or in part. When operations are resumed the Business Income Coverage Form will continue to provide coverage for any loss of business income for 30 days under the Extended Business Income Additional Coverage.

Primary Agent | June 2012

Upon reopening, it may take many businesses several months to reach their pre-loss income level, and 30 days is not sufficient to cover their loss. On the Commercial Property Declarations Page is an Optional Coverage — Extended Period Of Indemnity. If this Optional Coverage is activated, business income can be extended up to 730 days. If Extended Period Of Indemnity is purchased, you’re only buying additional days.

Those days are worthless if there’s not a sufficient limit of insurance. The policy will pay the loss for the number of days stipulated, the limit of insurance is exhausted, or the business returns to pre-loss level, whichever comes first.

I certainly hope this review of potential coverage gaps has been helpful. Y’all take care! ________________________________

legal professional recognizes him as an expert on insurance coverages.

He is also an education consultant for IA&B, working with CISR, CIC and continuing education programs.

Jerry M. Milton, CIC, teaches and consults on industry issues. The

Ordinance or law If a building is subject to any ordinance or law regulating construction or zoning, we know to add the Ordinance Or Law Coverage endorsement (CP 04 05) to cover the costs to upgrade the building in order to satisfy current building codes or to demolish the building and rebuild elsewhere. But do we think to add the Ordinance Or Law – Increased Period Of Restoration endorsement (CP 15 31) to the Business Income And Extra Expense Coverage Form to cover the increased period of restoration resulting from the enforcement of any ordinance or law regulating construction or repair?

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.

Business t Surety t Auto t Home

www.PennNationalInsurance.com [ 19 ]

Tools

YOU CAN USE

Quick Response (QR) Code

QR

(or quick response) codes are showing up everywhere – on milk cartons and business cards, in bus shelters and instruction manuals, on museum exhibits and sporting-event tickets … even on the Facebook headquarters’ rooftop. So what are these mysterious barcodes and what could they mean for your agency?

First developed in the early ‘90s to track vehicles during manufacturing, the two-dimensional codes are now common in advertising and packaging. Smart phone users download an app that allows them to scan the QR code, which typically includes a hyperlink sending them to a designated Web page.

The possibilities are endless for your agency, but a few best practices follow.

Choose a mobile device-optimized landing page

Shorten the destination URL to improve “scanability”

Scan with smart phone to access QR code ideas for agents.

Test the code before publishing Make the scan worth their while

Provide instructions near the code

Creating a QR code is simple — and free. Enter “create QR code” in a search engine and choose from numerous vendors. Generating your own code is instantaneous.

[ 20 ]

Glance at Events JUNE CALENDAR Date

Topic

Location

5

William T. Hold Seminar

Lancaster, Pa.

Mistakes That Lead to E&O Claims

Mechanicsburg, Pa.

William T. Hold Seminar

Hagerstown, Md.

DAIAB Annual Convention

Rehoboth Beach, Del.

7

CISR—Commercial Property Course

Baltimore, Md.

11-12

James K. Ruble Graduate Seminar

Annapolis, Md.

11-14

CIC—Commercial Casualty Institute

Erie, Pa.

13

Mistakes That Lead to E&O Claims

Baltimore, Md.

Best Practices of E&O Loss Control

Erie, Pa.

19

Dynamics of Service Seminar

Pittsburgh, Pa.

19-21

P&C Licensing Study Course

Mechanicsburg, Pa.

20

Power Hour Webinar

Online Webinar

21

CISR—Commercial Property Course

Philadelphia, Pa.

28

Mistakes That Lead to E&O Claims

Pittsburgh, Pa.

6

WHAT YOU DON’T KNOW COULD LEAD TO E&O When it comes to errors or omissions (E&O), you can address the mistakes you know. It’s the ones you don’t recognize that can land you in court. Teaching independent agents to think differently about hidden exposures or outside the box when employing best practices is the goal of our upcoming loss-control classes. Our on-demand seminars also address E&O exposures and are available anytime, anywhere.

IA&B’s loss-control seminars are taught by experts with extensive experience with independent agencies and are approved for CE and loss-control credit. IA&B members receive a significant discount on the registration fees.

Mistakes That Lead to E&O Claims Best Practices of E&O Loss Control June 13 Baltimore, Md. June 13 Erie, Pa. June 28 Pittsburgh, Pa. June 5 Mechanicsburg, Pa. Read more and register at iabgroup.com/E&Oseminars w Ethical Behavior and E&O (On-Demand) w Compliance Pitfalls and Ethical Responsibilities* (On-Demand) *includes a Md. edition and a NEW Pa. edition Read more and register at iabgroup.com/on-demand

[ 21 ]

Platinum Profile Insurance Agents & Brokers proudly recognizes Berkley Mid-Atlantic Group, LLC as one of its Platinum Partners.

IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNER Berkley Mid-Atlantic Group, LLC

PRESIDENT & CHIEF EXECUTIVE OFFICER Kevin W. Nattrass

COMPANY LOCATIONS Home Office, Glen Allen, Va. PA/OH Region, Harrisburg, Pittsburgh & Erie, Pa. Capital Region, Glen Allen, Va. Carolinas Region, Charlotte, Nc. 1-800-283-1153

A.M. BEST RATING “A+” (Superior)

WEBSITE www.wrbmag.com

Berkley Mid-Atlantic Group's home office in Glen Allen, Va.

B

erkley Mid-Atlantic Group, LLC (BMAG) is a regional commercial property and casualty carrier organized into three full-service territories with local claim, underwriting and risk management teams located close to its customers and policyholders. BMAG’s policies are issued exclusively through independent agents serving clients throughout the Mid-Atlantic Region, including Delaware, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia and Washington, D.C. BMAG is a member company of W. R. Berkley Corporation, an insurance holding company founded in 1967 that is among the largest commercial lines writers in the United States.

BMAG takes a generalist approach to underwriting, with a focus on middle market commercial accounts within the service, manufacturing, retail, construction, wholesale and finance industries. Additionally, with its Marine and Select Market divisions, BMAG offers niche-oriented coverages for transportation, schools, social services and public entity organizations.

BMAG’s business approach is predicated on sound, disciplined underwriting practices, always “doing the right thing” for agents and policyholders and is further exemplified in its core values of.... The carrier is committed to “Insuring the Future of Business” through its independent agency relationships.

Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers.

Thank you for your continued sponsorship.

WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.

DO YOU SEE YOUR NAME? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support.

Contact the Member Sales Center at 800-998-9644, 717-795-9100 or visit us online at www.iabgroup.com to get started.

PLATINUM LEVEL

BRONZE LEVEL

ACUITY Berkley Mid-Atlantic Group Donegal Insurance Group Erie Insurance Group Harleysville Insurance Highmark Casualty Insurance Co Insurance Agents & Brokers Service Group Inc

Aegis Security Insurance Co

MMG Insurance Company Millers Mutual Group Millville Mutual Insurance Co Mutual Benefit Group Ohio Casualty Penn National Insurance Selective Swiss Re The Main Street America Group Utica National Insurance Group

Encompass Insurance

GOLD LEVEL

Lebanon Valley Insurance Company

Progressive Westfield Insurance

Merchants Insurance Group

Agency Insurance Company AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Builders Insurance Group Chubb Group of Insurance Companies Countryway Insurance Company First General Services Foremost Insurance Group Goodville Mutual Casualty Company Guard Insurance Group Harford Mutual Insurance Co Hanover Fire & Casualty Insurance Company Insurance Alliance of Central PA Inc Insurance House Insurance Placement Facility of PA Keystone Insurers Group Inc Mercer Insurance Group Mercury Casualty Penn PRIME Municipal Insurance

SILVER LEVEL Access Insurance Company Allied Insurance American Mining Insurance Co Cumberland Insurance Group Frederick Mutual Insurance Co Juniata Mutual Insurance Co PSBA Insurance Trust The Philadelphia Contributionship

Reamstown Mutual Insurance Company Rockwood Casualty Insurance State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Motorists Insurance Group The Mutual Service Office Inc Travelers Tuscarora Wayne Insurance Company Zenith Insurance Primary Agent June 2012

Primary Agent | June 2012

Technology U P DATE

THE TOP 20 TECHNOLOGY-DRIVEN TRENDS FOR 2012

DANIEL BURRUS Daniel Burrus is considered one of the world’s leading technology forecasters and strategists. He is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology driven trends to help clients better understand how technological, social and business forces are converging to create enormous, untapped opportunities. The New York Times has referred to him as one of America’s top three business “gurus” in the highest demand as a speaker.

For more information on the services and products offered by Daniel Burrus, please visit www.burrus.com. For Burrus’ mobile Web app, text DANBURRUS to 99000.

No matter what industry you’re in, your company can’t survive without technology. And these days, even non-technical employees know that technology goes way beyond desktop computers and networks. From smart phones and tablet computers to mobile apps

and could-based technology, there’s a plethora of technological advancements to not only keep track of, but also to profit from. To stay competitive, your organization needs to anticipate the future technology trends that are shaping your business and

[ 24 ]

then develop innovative ways to implement them in your organization.

Now that 2012 is well underway, be ready for the following 20 technologydriven trends to continue to create both disruption and opportunity in the business world. But rather than just

Primary Agent | June 2012

react to them, be pre-active to future known events and plan how your company will profit from them now.

That’s the only way you’ll gain competitive advantage in the coming years.

1. Rapid growth of Big Data. Big Data is a term used to describe the technologies and techniques used to capture and utilize the exponentially increasing streams of data with the goal of bringing enterprise-wide visibility and insights to make rapid critical decisions. High Speed Analytics using advanced cloud services will increasingly be used as a complement to existing information management systems and programs to tame the massive data explosion.

This new level of data integration and analytics will require many new skills and cross-functional buy-in in order to break down the many data and organizational silos that still exist. The rapid increase in data makes this a fast-growing, hard trend that cannot be ignored.

2. Cloud computing and advanced cloud services will be increasingly embraced by business of all sizes, as this represents a major shift in how organizations obtain and maintain software, hardware and computing capacity. As consumers, we first experienced public clouds (think about when you Google or Apple’s MobileMe and now iCloud). Then we saw more private clouds and hybrid clouds from businesses such as Flextronics, Siemens, Accenture and many others, all using the cloud to cut costs in human resources and salesmanagement functions. This was only the beginning, as cloud services

enable the rapid transformation of all business processes.

3.

On-demand services will increasingly be offered to companies needing to rapidly deploy new services. Hardware as a Service (HaaS) joins Software as a Service (SaaS), creating what some have called “IT as a service.” All will grow rapidly for small as well as large companies, with many new players in a multitude of business process categories. These services will help companies cut costs as they provide access to powerful software programs and the latest technology without having the expense of a large IT staff and time-consuming, expensive upgrades. As a result, IT departments in all industries will be increasingly free to focus on enabling business process transformation, which will allow organizations to maximize their return on their technology investments.

4. Virtualization of storage, desktops, applications and networking will see continued acceptance and growth by both large and small businesses as virtualization security improves. We will continue to see the virtualization of processing power, allowing mobile devices to access supercomputer capabilities and apply it to processes such as purchasing and logistics, to name a few.

5. Consumerization of IT increases as the source for innovation and technology continues to be driven by the consumer thanks to rapid advances in processing power,

[ 25 ]

storage and bandwidth. Smart companies have recognized that this is a hard trend that will continue and have stopped fighting consumerization. Instead, they are turning it into a competitive advantage by consumerizing their applications, such as recommending safe and secure third-party hardware and apps. Encouraging employees to share productivity-enhancing consumer technology will become a wise strategy.

6. Gamification of training and education will fuel a fast-moving hard trend using advance simulations and skill-based learning systems that are self-diagnostic, interactive, game-like and competitive, all focused on giving the user an immersive experience thanks to a photo-realistic 3D interface. Some will develop software using these gaming techniques to work on existing hardware systems such as the Xbox and PlayStation. A social component that includes sharing will drive success.

7. Social business takes on a new level of urgency as organizations shift from an Information Age “informing” model to a Communication Age “communicating and engaging” model. Social software for business will reach a new level of adoption with applications to enhance relationships, collaboration, networking, social validation and more. Social search will increasingly be used by marketers and researchers, not to mention Wall Street, to tap into millions of daily tweets and Facebook conversations, providing real-time analysis of many key consumer metrics.

TECHNOLOGY UPDATE

8.

Smart phones and tablets become our primary personal computers, and the mobile Web becomes a must-have capability.

An enterprise mobility strategy becomes mandatory for all size organizations as we see mobile data, mobile media, mobile sales, mobile marketing, mobile commerce, mobile finance, mobile payments, mobile health and many more explode. The vast majority of mobile phones sold globally will have a browser, making the smart phone our primary computer that is with us 24/7 and signaling a profound shift in global computing. This new level of mobility will allow any size business to transform how they market, sell, communicate, collaborate, educate, train and innovate using mobility.

9. Tablet computers with enterprise-level Web apps will be used to transform sales and service support and then move to purchasing, logistics, just-in-time training and much more.

10.

Intelligent electronic agents using natural language voice commands takes off with Apple’s Siri, rapidly followed by Android, Microsoft and others all offering what will become a mobile electronic concierge on your smart devices including your phone, tablet and television. Soon retailers will have a Siri-like sales assistance, and maintenance workers will have a Siri-like assistant. The possibilities are endless.

11.

Digital identity management will become increasingly important to both organizations and individuals as new software allows users to better

manage their multiple identities across business and personal networks. Next Generation Biometrics will play a key role in both identity management and security.

12.

Visual communications take video conferencing to a new level with programs like SKYPE, FaceTime and others giving us video communication on phones, tablets and home televisions. Visual communications will be integrated with current video conferencing systems, fueling this as a main relationship-building tool for businesses of all sizes.

Are these the only technology-driven trends for 2012 to be aware of?

Of course not. As we all know from past experience, technology is always evolving, resulting in new trends emerging and

new products appearing every day.

13.

Enhanced location awareness will accelerate the number of business-to-consumer apps for smart phones and tablets that will take geo-social marketing and sales to a new level of creative application, driving rapid growth.

[ 26 ]

14.

Geo-spatial visualization combines geographic information systems (GIS) with location-aware data, radio frequency identification (RFID) and other location-aware sensors (including the current location of users form the use of their mobile devices) to create new insights and competitive advantage. Early applications include logistics and supply chain to name a few.

15.

Smart TV using apps will get a major boost in the marketplace, fueling a major shift in home viewing.

Ever wonder how you could have over 500 cable or satellite channels and nothing to watch? You didn’t have apps on your TV allowing you to personalize the experience. This is the beginning of a major shift that will take place in living rooms globally.

Look for Apple to introduce the iTV (living room size iPad).

16.

Multiple app stores for all smart phone, tablet and television operation systems (Android, Blackberry, Windows and others) will take off, creating an abundant distribution and sales ecosystem for all. This will cement the revolution versus evolution that apps software represents. We will see business app stores for the enterprise starting this year.

17.

3D displays for smart phones and tablets will be the breakthrough that will drive widescale consumer acceptance of 3D computing. 3D computing for the enterprise will grow rapidly for military, medicine, fashion, architecture and entertainment applications.

Primary Agent | June 2012

18.

eBooks, eNewspapers and eMagazines pass the tipping point due to the abundance of smartphones with readable displays, tablets that provide a full-color experience, and publishers providing apps that give a better-than-paper experience by including cut, copy, paste, print and multimedia capabilities. In addition, eBook readers will have high quality with a low enough price to bring in the masses.

19.

Interactive multimedia eTextbooks will finally take off thanks to Apple’s iBook Author and other 7competing tools, freeing new publishers

to create compelling and engaging content, and freeing students from a static, expensive and literally heavy experience.

20.

Wireless machine-to-machine applications such as two-way meter reading, surveillance, vending machine and point-of-sale solutions take off thanks to faster wireless data networks.

in new trends emerging and new products appearing every day. That’s why smart organizations stay ahead of the trends by anticipating them, adapting them to their unique environment before the competition does and ultimately enabling the organization to profit from them.

The more you’re able to do that, the sooner your organizations will reach the next level of success.

Spot your own trends. Are these the only technology-driven trends for 2012 to be aware of? Of course not. As we all know from past experience, technology is always evolving, resulting

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Insurance adjusters’ 15 minutes of fame Pity insurance adjusters for the role they play? According to the satirical website The Daily Quarterly, you’re not alone.

The site recently mocked (or flattered, depending on your perspective) the profession with an article claiming that Academy Award-winning actor Daniel Day-Lewis left an upcoming movie, in which he would have played an insurance adjuster, after less than a day of job shadowing.

The spoof included a (faux) statement from the actor: “I’d rather spend 10 years working in the heat on some oil rig, like I did before doing ‘There will be blood,’ … than deal with people on their auto accident. Never again….”

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Source: The Daily Quarterly ----------------------------------------------------------------———————------The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

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competitive pricing and coverage for your customers!

Five or more units are eligible for this great program.

An optional Apartmentizer Coverage Endorsement is also available which includes 34 additional coverages such as: Landlord/Owner Furnishings Loss of Earnings Lock Replacement Utility Interruption Water Back-Up of Sewers & Drains and much more!

Apartment program available in DE, MD, NJ and PA

Residential Contractors with up to five employees can find great deals on liability and tools insurance at Brokers Surplus Agency! We represent UTICA First Insurance, one of the largest writers of small contracting firms in the Northeast!

Contact: Dennis Marsaglia, Ext. 230 dennis@brokerssurplusagency.com Evelyn Frisch, Ext. 227 evelyn@brokerssurplusagency.com

Contact: Dennis Marsaglia, Ext. 230 dennis@brokerssurplusagency.com Evelyn Frisch, Ext. 227 evelyn@brokerssurplusagency.com

Brokers Surplus Agency, P.O. Box 2849, Warminster, PA 18974 Call (215) 443-9900

Blanket Additional Insured coverage and UTICA’s own “Toolbox Endorsement” which includes 7 bundled additional coverages saves your customers hundreds of dollars! Call or e-mail us today for a quick quote.

Artisan program available in DE, MD, NJ & PA

Brokers Surplus Agency, P.O. Box 2849, Warminster, PA 18974 Call (215) 443-9900

The Consequences of a Property Loss The “consequential” losses in a covered property claim come in a variety of forms and may or may not be covered by policy endorsements. In this seminar, Jerry sorts it all out through his vast knowledge of coverages and his unique ability to offer anecdotes that make it more meaningful for the class.

Dates/Locations July 10 Baltimore, Md. July 11 Newark, Del. August 1 Allentown, Pa.

August 2 Mechanicsburg, Pa. August 15 Philadelphia, Pa. August 21 Pittsburgh, Pa.

Read more at iabgroup.com/Milton

8F ,OPX UIF %SJMM If you have clients involved in the rapidly expanding Marcellus Shale natural gas industry—and who doesn’t these days?—Interstate has the coverages you need for water haulers, dumps and other ancillary classes.

If your client hauls any commodity for the natural gas drilling industry, Interstate can insure them!

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In Pennsylvania, Delaware, Indiana, Kentucky, Maryland, Michigan, New Jersey, Ohio, Virginia & West Virginia 2307 Menoher Blvd. Johnstown, PA 15905 814-255-7878 1-800-452-0297 Fax 814-255-6010

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