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Insurance Solutions for Business

Make General Casualty your first choice. General Casualty’s full line of commercial property and casualty products can meet your customers’ individual insurance needs. Expanded property limits, customized coverages, flexibility – that’s General Casualty. Coverages underwritten by General Casualty Company of Wisconsin, General Casualty Insurance Company, Hoosier Insurance Company, Regent Insurance Company, Blue Ridge Insurance Company, Blue Ridge Indemnity Company, Southern Guaranty Insurance Company, Southern Pilot Insurance Company, and Southern Fire and Casualty Company. General Casualty is a registered service mark of General Casualty Company of Wisconsin.

Course of Construction Defects

Window & Roof Leaks

Job Site Hazards Theft of Tools & Equipment Employee Negligence Alan Jay Kaufman Chairman, President & CEO

At Burns & Wilcox, we have you covered — from course of construction defects to employee mishaps and job site hazards. Our national network of experienced underwriters and brokers has strong relationships with specialty markets, making sure your client gets the quickest turnaround and most competitive rates possible. Plus, a Contractors Coverage policy from Burns & Wilcox carries broad protection and flexible solutions uniquely tailored to each risk. So if you’re looking for an insurance company with the speed, intelligence and agility to take care of your client’s contracting job, look no further than the professionals at North America’s largest specialty insurance wholesaler.

Morehead City, North Carolina

252.726.8992 fax 252.726.9484

Contractors Insurance

Who can hammer out a solution for any remodeling Contractors Policy?

FALL 2008

Independent Insurance Agents & Brokers of South Carolina PO Box 210008, Columbia, SC 29221 800 Gracern Road, Columbia, SC 29210 803-731-9460 803-772-6425 (fax) e-mail:


Message from the Chairman of the Board


Message from the National Director

G. Frank Sheppard, AAI President ext. 23, Rebecca H. McCormack, CPCU, CIC, AAI, CPIW Vice President ext. 14, Anita J. Trevino Director of Communications ext. 29, Beth Chastie Director of Administration & Finance ext. 17, Charlene Bernotas, CISR, ACSR Agency Administrator ext. 22, Elaine Mikell Meeting Coordinator ext. 16, Mary A. Ellis Education Coordinator ext. 12, Jeanette Bloss Education Coordinator ext. 11, Pat Fetner Receptionist ext. 10, Lee Ruef Director of State Government Relations South Carolina Agent & Broker is the official magazine of the Independent Insurance Agents and Brokers of South Carolina and is published four times annually. IIABSC does not necessarily endorse any of the companies advertising in this publication or the views of its writers. Articles and information published in this magazine may not be reproduced without written consent of the IIABSC. South Carolina Agent & Broker is not responsible for unsolicited manuscripts, art or photography. The publisher cannot assume responsibility for claims made by advertisers and is not responsible for the opinions expressed by contributing authors. For more information on advertising, Contact Jim Aitkins Blue Water Publishers 22727 - 161st Avenue SE 48 Monroe, WA 98272 360-805-6474 fax: 360-805-6475


South Carolina Agent & Broker • Fall 2008


Message from the President

8 10

Message from the Vice President


Young Agents Scholarship Golf Tournament




Big “I” Junior Golf Classic


CSR of the Year - Donna L. Franklin, CIC


Young Agents Conference


Employees, Parties and Booze - 10 Ways to Avoid Getting Sued


SC Agents Technology Conference


Legislative Review


What To Do With Those Kids and Their Cars


2008 Board of Directors and Executive Committee


IIABSC Calendar


How Agents Are Leveraging Trusted Choice

Advertiser Index AequiCap Program Administrators 33 Amerisafe 37 Appalachian Underwriters 39 Auto Owners Insurance Company 46 Builders Mutual Insurance 11, 29 Burns & Wilcox 3, 5, 48 Custom Assurance Placements 35 Edwin M. Rollins Company 7 Enterprise Rent-A-Car 39 FirstComp Insurance 43 General Casualty Insurance 2 Hanover Excess & Surplus 13 Hull & Company 47 Insurance House 19

Jackson Sumner & Associates Johnson & Johnson Montgomery Insurance Mutual of Omaha Prime Rate Premium Finance South Carolina Agent Network Southern Insurance Underwriters Southern Risk Summit Marketing Services TAPCO Underwriters The Main Street America Group The Seibels Bruce Group Universal North America

17 24, 25 39 43 43 27 9 23 18 15 23 36 31

Cover Photo credit: Anita J. Trevino, IIABSC. This past July, participants of the Young Agents Conference gathered on Daufuskie Island off the coast of SC between Hilton Head and Savannah, Ga., for three days of fun, relaxation and most importantly education and networking with their peers. This scene is just a glimpse of the tremendous beauty of the island. See inside and visit our “Young Agents” page on the web site for more photos of this incredible event that brings generations of agency management together. Hope you will join us for the next one at the new Marina Inn in Myrtle Beach from July 30 to Aug. 2, 2009.

Vacant Property

Need a Vacant Property Policy that won’t come up empty?

Alan Jay Kaufman Chairman, President & CEO

When you partner with the experienced professionals at Burns & Wilcox, you’ll find a national network of underwriters with unparalleled access to the leading markets for Vacant Properties. That means broad coverage from a company with the speed, agility and intelligence to get the job done right. Plus, flexible solutions and large limits in protection against fire, vandalism and other unforeseen claims. If your client has an empty property, give them the right coverage with a Vacant Property Policy from Burns & Wilcox, North America’s largest specialty insurance wholesaler.

Morehead City, North Carolina

252.726.8992 fax 252.726.9484

Insure Wisely


s I write this piece, Tropical Storm Hanna is lurking in the Atlantic Ocean, threatening to hit the SC Coast in the next 24 hours, with Hurricane Ike close behind. Predicted wind gusts have closed the major bridges around Charleston, where my agency operates. Hurricanes are standard fare for us coastal agents, but it leads me to ask: Are you prepared for the next event in the life of your agency? It could be a tornado, flood, fire, theft, hurricane, or last but not least the death of the agency principal. [Editor’s Note: The Carolinas were spared by Ike, which eventually devastated Coastal Texas.] These are events that we hear about daily. It may have happened to someone we know or just a fellow around the corner. We pause for a moment to think “What about me…. have I taken care of the important issues or plans to make sure our agency survives one of these events?” If you are like most of us we think about it and decide that we need to do something. This is a good start but most of us in small- or medium-size agencies get distracted quickly. We are always multi-tasking, and what was once a priority …….now a week or so later we find it on the back burner. It is so easy to happen; we all have done it! I suggest that you sit down with your management team, spouse, staff and talk about the worst-case scenario that can happen to the agency tomorrow. Make a plan; you might say I don’t know where to begin. Begin by calling the Big “I” or going on the Web, www., where they have a disaster plan workbook that will give you a great start. Under “Member Resources>Agency Business Resources>Planning” of the SC Big “I” Web site,, there are several articles in the members-only section regarding continuity planning for your agency. Go online and read the stories from your fellow agents who may have experienced a loss. Articles may be found in the Virtual University – www.iiaba. net/vu, or at, www.agentandbroker.


South Carolina Agent & Broker • Fall 2008

com and They are worth the read. Agility Recovery Solutions is just one of several companies that for a fee will bring in generators, trailers, computers, and office equipment, etc. anything needed in setting you back up within 24 to 48 hours. If you do not keep backup tapes for your agency, shame on you! You have been told over and over again of the importance of doing it daily, weekly and month end. If you do not know how to do this call your agency management system vendor and get them to show you how. Keep your backups off premises and assign someone in your office this responsibility. Please do not put this off any longer!!! Have you reviewed the Agency’s insurance coverages lately? What coverages does the agency have to protect the financial security of the agency? Do you have extra expense coverage, loss of income, law & ordinance coverage, what about coverage for electronic data/media and how about flood? There are agency consultants that can give you a plan for perpetuation, asset enhancement and even a plan to help you grow your agency. You have built or are building a valuable asset, don’t lose it. What about a Will? If you don’t have one call an attorney in your town or IIABSC can recommend one for you. It is one of the best gifts you can give your family. If you have one, great! But it may need updating if you haven’t reviewed it with an attorney in several years. Your National and State Associations can help you with many of these issues. This information is another advantage of being a member of IIABA & IIABSC; they are a great resource for us. We do a great job protecting our clients! Who’s protecting us? We are approaching a New Year: let’s get started on a plan of protection.

Fall 2008 • South Carolina Agent & Broker



Agents Council for Technology Updates Agency Workflow Tool

he Independent Agents & Broker of America’s latest agency improvement tool helps agencies move to advanced workflows and eliminate paper in order to free up staff time for sales and pro-active customer service. The new “Best Practices Guide to Agency Business Processes and Information Management” replaces two earlier guides and incorporates the latest in agency workflows, such as Real Time. Like the earlier guides, it is a collaboration between the Big “I” Agents Council for Technology (ACT) and Council for Best Practices working with noted agency workflow consultant Laura Nettles. “Our agency used the guide when it was first developed, and we recognized tremendous improvement in our agency processes,” said Angelyn Treutel, Chair of ACT, Vice President of Treutel Insurance Agency in Bay Saint Louis, Miss. and a Trusted Choice® and a Best Practices agency. “The guide contains a wealth of practical information and model workflows that agencies can use to continue to improve their operations.” Treutel recently spoke this year’s inaugural SC Agents Technology Conference and again at our annual convention in Myrtle Beach. The 155-page resource is available at www. and is designed to be used electronically because it contains numerous links for easy navigation. The guide enables agencies to conduct a selfassessment in technology, management support, workflows, agency/carrier interfaces, Real-Time utilization and client


South Carolina Agent & Broker • Fall 2008

focus, and then provides step-by step guidance on how to move to the next level of agency workflow. It also provides steps to implement a comprehensive information storage plan for all forms of media and documentation, including paper, scanned documents, e-mails, voice mails, notes, faxes and pictures. “We are thrilled to make this invaluable guide available to independent agents across the country as a member service,’” said Susan Leslie, Chair of the Council for Best Practices, President of Bragdon Insurance in York Village, Maine, and a Trusted Choice® and Best Practices agency. “We deeply appreciate the opportunity to work with Laura Nettles on this guide given that she has spent her entire career helping agencies improve their business processes.” Numerous agents and carrier representatives participating in ACT and the Council for Best Practices, including several Best Practices agencies, also contributed their expertise to help produce the best possible resource for the industry. The guide outlines detailed, practical information for agency improvement, including detailed property-casualty and benefits workflows and a quick reference guide for categorizing and retrieving electronic documents. Editors’ Note: National Director Braddy has been appointed to serve on the Agents Council for Technology by IIABA national Chairman-Elect Brett Nilsson, CIC.





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Fall 2008 • South Carolina Agent & Broker



embers of Independent Insurance Agents & Brokers of South Carolina have exclusive access to a variety of insurance products that are hand-selected for their superior reputation and exceptional performance. In keeping with our dedication to providing quality products that meet the distinct needs of independent agents like you, I’d like to remind you about the errors and omissions (E&O) coverage from the Big “I” Professional Liability Program. In fact, when agencies join the Big “I” the majority of them cite access to strong, reliable and affordable errors and omissions insurance as a top reason for membership. The premiere IIABSC E&O insurance program is through Westport Insurance Corporation, a Swiss Re company that has provided many of you with a reliable E&O program for more than 25 years. This program is properly positioned to meet your professional liability needs and protect one of your most valuable assets — your career. In order to serve a more diverse market and become a true provider of choice, IIABSC recently added additional plans to expand our E&O product line. As a result, IIABSC can now offer alternative markets coverage through admitted and non-admitted E&O markets. But the Big “I” Professional Liability Program does not stop after the E&O policy is issued. IIABSC and IIABA have a variety of loss control and risk management tools available to help your agency manage E&O exposure and ultimately improve customer service to your clients.


Protect Your Agency

earn premium credits on Westport E&O policies. Also, last year, IIABSC began offering loss control classes at no charge for IIABSC members. Check out the Education Calendar at www. for the class schedule of future seminars. Risk Management Web site - One of the latest features added by IIABA is a dedicated, E&O risk management web site for Westport (Swiss Re) policyholders. You can find it at www. Here agencies can view articles on loss prevention and E&O issues and can find sample checklists and sample forms. Curious about how your agency is doing from an E&O perspective? Try the Agency E&O Self Assessment tool, which will walk you through all aspects of the business cycle, from writing new business to processing claims, and provide you with a good understanding on where your agency workflows and procedures need attention. Completed by different members of your agency staff, it will also give you an indication if there is consistency of procedures across the agency.

Your Dedicated Big “I” Staff -Your primary resource for E&O protection, information and resources is the professional and dedicated staff at IIABSC. In addition to evaluating your E&O insurance protection, the Big “I” team can answer your specific questions and direct you to the resources that can help protect your agency and improve your office procedures.

Coming Soon – Agency Shield Program - Soon to be available by Swiss Re’s Commercial Insurance (underwritten by Westport Insurance) is the Agency Shield Program (ASP) exclusively for Swiss Re policyholders to help agencies reduce E&O exposure, improve client service and build sustainable, profitable processes. ASP is a value-added service created to help agencies improve their office procedures using a cost effective and easy-toimplement process that is customized to your specific agency. Program features include detailed and systematic review of agency operations, establishing processes and standards across all agency operations, staff training in customer service and potential agent liability and general focus on E&O reduction. Look for complete details on the Agency Shield Program in the coming weeks.

Loss Control Seminars - Most IIABSC members and/or staff have been to an IIABSC-sponsored loss control seminar. Not only do participants learn valuable information on E&O trends and preventive measures, they earn CE credit and can also potentially

Hopefully, you and your staff take E&O prevention seriously. Make sure you are taking full advantage of what the Big “I” Professional Liability Program has to offer. It’s one of your Big “I” member benefits – use it!

South Carolina Agent & Broker • Fall 2008





After insuring residential homebuilders for nearly 25 years, Builders Mutual has expanded into commercial construction. At a moment like this, Builders Mutual has the expertise to serve contractors specializing in commercial construction. We are well-positioned to provide both. UÊ UÊ UÊ UÊ

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Fall 2008 • South Carolina Agent & Broker


Building Better Producers

Congratulations! It’s a boy/girl!” All parents know the thrill and rush associated with hearing these words and the hopes and expectations that come with them. You stare down into that tiny face and instantly you can picture the rest of their life – learning to ride a bike, becoming captain of the football team or cheerleading squad, attending an Ivy League college, becoming a successful doctor, Company CEO, maybe even President. What magnificent expectations we have for them… and then they become teenagers. All those initial hopes and dreams suddenly turn into a desperate desire for only a high school diploma and a minimal arrest record. We can hardly even communicate with them because instead of talking about their day over the dinner table, all we get is a weird message on our phone that says something like “i nd $ + 2 borrO d car” (In old people language that’s “May I please have some money and borrow the car”). There are days when we just feel like giving up and hopping on the first plane for a tropical island where no one will ever find us, sipping on a drink with a little umbrella in it. But instead, with much patience, determination and a good solid plan (perhaps enhanced by prescription drugs), we continue to guide them through adolescence and more often than not, they turn out successful on the other side. Now I have a few more words for you that are sure to evoke some of the same emotions I just spoke about – “Congratulations! You’ve hired a new producer!” The same thrill and rush comes upon you, and you already have great hopes and expectations of a stellar career and millions of dollars in commissions. They are young, energetic, enthusiastic, selling machines ...and then they run out of friends and relatives. Suddenly they are faced with closed doors and rejected applications. They spend countless hours making hundreds of phone calls only to get a few appointments and even fewer chances to submit a quote. Or maybe they are quoting machines, pumping them out by the


South Carolina Agent & Broker • Fall 2008

dozens, but their closing ratio is dismal. They start whining, demanding too much attention, or just disappearing for hours with nothing to show for their time. Those hopes and dreams you had are fading quickly and thoughts of that tropical island start to surface again. You need a plan – and quick. IIABSC has that good, solid plan for you. It’s called the Elite Sales Training program. It’s twelve days (three days per quarter) of intense sales training designed specifically for new (5 years or less) independent agency producers. It focuses on one thing – selling – and how to do it the smart way. Individual sales and prospecting goals are set in the very beginning and monitored on a monthly basis. Sessions are led by National speakers, industry recognized sales agents and trained facilitators. Participants learn and practice proven sales skills. It is one of most comprehensive insurance sales training schools in our industry, and we have had great success with it in South Carolina since its implementation in 2002. Charlie Dorton, owner of Russell Massey & Company in Columbia had this to say about the Elite Sales School: “I have sent three producers to the Big I Elite Sales School with excellent results. All three remain with the agency and have been successful in their sales careers.” He went on to say this about the format of the school: “Breaking up the training into four sessions, one each quarter, worked well for their schedules and prevented them from being overwhelmed with information.” So fret no more. Let the Elite Sales School restore your sanity and get those dollars flowing back into the agency. Registrations are now being accepted, but don’t delay, the class is limited to 15 participants. Go to for more information. Now that’s a plan!

     Looking for solutions for hard to place risks? Hanover Excess and Surplus is the right choice. When it comes to placing speciaty lines for independent agents, nobody does it better than Hanover. Hanover offers the widest range of Personal, Commercial, Transportation and Professional lines products, as well as the service to back it up. We have a full range of admitted and non-admitted carriers to cover almost any type of risk. So, if you’re looking for standard, non-standard, brokerage or anything in between, make the right choice. Choose Hanover. Serving the Carolinas and Virginia since 1970.

               

 Fall 2008 • South Carolina Agent & Broker


Young Agents Scholarship Golf Tournament Sponsors Allstate/ Encompass FirstComp Frankenmuth GMAC

Country Club of Orangeburg

May 12, 2008

Great American Property & Inland Marine

Hull & Co Jackson, Sumner & Associates John T. Cook & Associates Montgomery Insurance National Grange Ocean Potion Mid Atlantic Pinckney Carter Co. Progressive Insurance SAFECO Smart Choice Agents Program of SC Summitt The Seibels Bruce Group Travelers Insurance Universal North America Insurance

Left: First place team (alphabetically, not in order of appearance): Jason Besse, Mark Bowers, Terence Jenkins, Tom McDavid


South Carolina Agent & Broker • Fall 2008

What seems faster than 8 seconds?

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Fall 2008 • South Carolina Agent & Broker


s t n e g A ing w Ho erag e® v c e i L o h e C r A ted s u r T By Ross Turner, CIC Trusted Choice® Chairman


hat’s the key aspect to building a brand over the long term? Advertising, you might say? Well, that is an important brand “touch-point.” But in any serious brand-building campaign, which takes place over multiple years—even decades—how the customer actually interacts with the product or service is most important. In insurance, these brand touch-points involve your staff working with customers and prospects. Advertising messages can set the stage for those interactions, but how your staff serves customers and prospects is the true test of your brand. That’s why Trusted Choice® has put in place a dynamic branding program allowing for flexibility at the local level. How is this achieved? Remember that Trusted Choice® does not replace your agency’s brand—it adds value to your agency’s brand. Thus, if you already have a solid agency brand, you can position Trusted Choice® as adding further value to the services you already offer. (By way of example, think of “Intel Inside” or the “Good Housekeeping Seal of Approval.”) Here are some impactful ways agents and brokers are leveraging Trusted Choice®: Pledge of Performance Trusted Choice® provides a road map for agents to offer a consistently positive customer experience—it’s called the Pledge of Performance. The 10-point Pledge responds to consumer


South Carolina Agent & Broker • Fall 2008

demands for professionalism, choice, customization, 24/7 service and advocacy. In thinking of how to best serve your customers, you don’t have to reinvent the wheel! With language from the Pledge, participating agents are writing open letters to clients, highlighting the benefits for customers of using their Trusted Choice® agency. Agent and broker Web sites proudly highlight an overview of the Pledge, with the full Pledge just a click away. Here are some other ways agents are using the Pledge of Performance: • Running ads in their local paper stating the Pledge. • Having the Pledge made into a framed wall hanging in the reception area—and in every office or cubicle—as a visual reminder for employees and customers of the firm’s commitment.

JACKSON SUMNER & ASSOCIATES Excess & Specialty Lines Broker

“Different” Property & Casualty





Personal Lines


Reason #37 why we’re Different All policies written through JSA that we issue in house are issued and mailed to your office within 24 hours. If it is a policy that we do not issue in house, a binder will be promptly issued within 24 hours as well. Our policies are mailed to your office so you do not have to print a copy for your client.




Myrtle Beach


Phone 800-342-5572 • • 828-262-0754 Fax

• Discussing a different bullet from the Pledge during weekly or monthly staff meetings so employees will be fully invested in these performance criteria. • Using the Pledge as the basis for customer survey questionnaires. • Mailing the Pledge to customers with a letter from the agency owner. • Incorporating language from the Pledge in their telephone on-hold message. Are you and your staff embracing the Pledge and living up to its promises? Are you maximizing the Pledge’s power as a marketing tool? Logo, Marketing Materials and Stationery Thousands of participating agents and brokers are proudly displaying the Trusted Choice® brand name and logo. (Remember that the logo has been tested, and consumers respond positively to it.) Agents have reprinted their marketing materials and stationery around the Trusted Choice® logo guidelines. Examples include: • Complete proposal kit (sales presentations, proposals and materials) • Letterhead, envelopes and business cards • New-client welcome packages • Client bills and newsletters


South Carolina Agent & Broker • Fall 2008

• Building signage • Logo apparel • Bumper stickers and license plate frames • Client gifts (calendars and other logo items) • E-mail signatures • Web site templates • Coffee cups used in your office Important note: Every Trusted Choice® agency must adhere to the logo usage rules. Random variations in colors, fonts, logo designs and messaging are not permitted for legal reasons and for consistency in presentation to consumers, just as is the case with any national brand. Visit the Agents/Brokers area of www. to download the logo rules and stationery guidelines. Trusted Choice® Web Site Besides refreshing their own Web sites with the Trusted Choice® logo and other materials, agents and brokers also are tying into the Trusted Choice® Web site (www.TrustedChoice. com), which links consumers with local participating members and provides helpful information on a number of personal and business insurance topics. The Trusted Choice® Web site plays a vital role in the program’s outreach to both agents and consumers. The site hosts

an Agency Locator through which consumers can find the agency that is right for them based on location, line of business and even languages spoken by agency staff. Member agencies are benefiting from this lead-generation tool by completing an agency profile in the Agents/Brokers area of the site. Agents also are keeping their agency profiles updatedâ&#x20AC;&#x201D;for example, if they add new office locations, they are updating their profiles at the Trusted ChoiceÂŽ Web site. Advertising All Trusted ChoiceÂŽ agencies benefit from the programâ&#x20AC;&#x2122;s national advertising. But they also can capitalize on professionally developed tag-able TV, radio and print ads that educate consumers on the value of doing business with their Trusted ChoiceÂŽ agency. These TV, radio and print ads direct consumers to look for their Trusted ChoiceÂŽ agency for choice of companies, customized policies and advocacy support. Savvy agents have learned that running their own tagged advertising (tagged with their name and contact information) in conjunction with the national ad buys gives their agencies the appearance of running a much bigger campaign than they actually pay for. Example: One agency is tagging the Trusted ChoiceÂŽ TV spotsâ&#x20AC;&#x201D;then bought local time on the same programs Trusted

ChoiceÂŽ chose for its media buy. This agency also tagged a Trusted ChoiceÂŽ radio spot and ran that through the following month on two local radio stations that match its target demographic. The result: everyone thinks the agency made the entire ad buy, even though it spent only about $2,500. To preview and download these customizable ads, visit the Agents/Brokers area of Public Relations Trusted ChoiceÂŽ members are benefiting from a national public relations program that drives consumers to the Trusted Choice Web site, where they can find a local agent or broker. The PR campaign is focused largely on major consumer and business media. Trusted ChoiceÂŽ agents can use those same PR messages on the local level. And it doesnâ&#x20AC;&#x2122;t cost them anything. For example, agents are building a complete calendar of media releases that are timed to seasonal events (e.g. holiday safety or flood season). The releases can be downloaded from and used locally with your agencyâ&#x20AC;&#x2122;s letterhead. A list of PR ideas is available in Zoom in on Branding and in the Agents/Brokers area of the Web site. For more information call (800) 221-7917 or visit


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Fall 2008 â&#x20AC;˘ South Carolina Agent & Broker



South Carolina Agent & Broker â&#x20AC;˘ Fall 2008

Left: Boysâ&#x20AC;&#x2122; runner up Damon Postal listens to Tournament Chairman Lee Ellis explain the national tournament. Postal went on to place 53rd at the National tournament. Flight winners from left to right are: Jones Brown, Blake Kennedy, Josh Lorenzetti, Joshua Chay, Cory Taylor, Brandon Traver, Matthew Meetze, Girls 2nd place Alexandra Van Dine, Kaitlin Matheson, Wesley Long, Kelli Murphy. Not pictured: Travis Cashion, Dalton Ward.

For runner ups, more photos and sponsors, visit our web site,

Fall 2008 â&#x20AC;˘ South Carolina Agent & Broker


Outstanding Customer Service Representative of the Year award

DonnaFrank L. Franklin, CIC B. Norris Agency


onna L. Franklin, CIC of the Frank B. Norris & Company agency in Columbia has been selected as the SC Outstanding CSR of the Year. This award is the highest honor for insurance Customer Service Reps who have distinguished themselves through contributions to their industry and profession. Once nominated, Donna was required to complete an essay on the following prompt: What are the four most important challenges for developing accounts in a soft market? Donna was also required to submit two professional letters of recommendation. The writer of one, Charles E. Foster, CIC, Sr. VP of her agency, made a great summation: “I believe that if you are looking for the CSR of the Year, you should look at the total picture – a balance between personal and professional, an individual who has their priorities in order at home and at the office, a person who exhibits morals, ethics & professionalism. I think you have a winner – Donna Franklin.” Winning essay: My job as an agent in a large commercial agency whose primary clients are homebuilders has given me an unwelcome but excellent opportunity to observe the effects of a soft market. The depressed home market has had a major effect on most of our clients. Declining home starts coupled with declining payrolls have contributed to challenges our agency has never before experienced. While we have already been striving to meet these challenges, my research for this essay has given me fresh ideas for tackling this soft market. Perhaps the greatest challenge for agencies in this environment is to expand, rather than reduce staff and sales resources. There is a great opportunity at this time for agencies to 22

South Carolina Agent & Broker • Fall 2008

capitalize on name recognition and market saturation. Agencies that have name recognition need to show they are major players in the market even when the going gets rough. Adding sales and support staff to promote name recognition and to provide valueadded services and quick turnarounds may well provide enough clients to offset not only the additional expenses, but also falling premiums. However, this approach is a hard sell to agencies looking to cut expenses in order to survive. Another challenge for agencies in a soft market is to focus. Focusing resources and efforts on those clients who provide the greatest revenue for your agency and those prospects who fit that mold may bring about positive effects to the bottom line. By concentrating on what your agency knows and does best you don’t squander resources and time on prospects and clients out of your comfort zone who require more effort. You also increase your expertise in your niche market, which can help your agency become known as the go-to market for your particular specialty. Perhaps the most important challenge is to create value for your agency. Communication is a key element to maintaining your client base and to obtaining new ones. Building relationships with your customers goes a long way in keeping them. A client with whom you have built a personal relationship is more likely not to shop their account or to at least give you an opportunity to provide a counteroffer when they do shop. Advising customers to purchase additional coverage for new or increased exposures is an excellent way for you to both increase your revenue and lessen your exposure to errors and omissions. Educating your customers on what is happening in the market can also prepare them for when premiums start to go back up. They will realize that the market is turning and that the agency has limited control over the inevitable increases that will occur. Finally, it is imperative that you keep abreast of improving technology in order to keep your agency in the cutting edge. Failure to advance your systems and processes will surely leave you behind the most successful agencies. While there may not be an immediate negative impact, eventually you will begin to lose accounts to others who are doing the job more efficiently.

Fall 2008 â&#x20AC;˘ South Carolina Agent & Broker


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Young Agents Conference

Daufuskie Island Resort & Breathe Spa

July 10 -13, 2008 Alls Al lsta ls tate ta te AM M Com o p, p Inc n AM MTR TRUS U T No US N rtth Am Amer eric er icaa ic Auuto A t -O -Own wnner erss In Insu suura r nc ncee Gr G ou oupp Bank Ba nkker erss In Insu sura su raanc ncee Grrou oupp Baasss Und B nder erwr er writ wr iter it ter erss Co ont ntin inen in enta tal Sppecia ecciaal R Riisk s s En nco comp mpas mp asss In as Insu ssuura r nc n e Grran ange ge Ins ge nsur u an ur ance ce ce IIIAB BSC Age genccy Jaack kso s n, Sum umne nerr & As ne Assooci Asso c attess JJoohn hnso s n & Joohnnso so son, n, Mgr grs. s.,, CMGA s. CMGA CM A N CII NC Occeaan P Pooti tion onn Prem Pr e iiu em um Fi um Fina Fina nanc ncin nc ingg Sp in Spec Spec e ia iali l st li stss Seib Se ib bel els ls Br Bruc ucee Grrou uc oupp Sele Se leect ctiv ivee In iv Insu sura raancce ranc Sout So u he ut hern rn Ris rn isk, k LLC k, LC S ns Su nshi hine hi ne Staate Ins nsur urrance uran an nce TAPC TA TAPC PCO O Unnde d rw rwri rite ri t rs te Trrav T rav avelleerrs IInnsuura ranc nce nce Events kicked off with a welcome reception, and all registered attendees were eligible to win door prizes such as TVs, mp3 players, mini-camcorders and digital cameras throughout the four days. After a CE session, participants gathered the next afternoon at the Breathe Spa for team-building activities like “Sink or Float,” where teams built makeshift boats from common materials and raced them across the pool (bottom) and the golf-cart scavenger hunt. For more photos,


South Carolina Agent & Broker • Fall 2008

go to under “Member Resources > Young Agents.”


Tonya Thomason, Vice President of David Crotts & Associates in Greenwood, SC is no stranger to business growth. David Crotts, of Greenwood, SC, recognized early on that in order to expand his successful Life & Health agency to include Property & Casualty, he needed the right individual. Tonya Thomason was just that person. David says, “By putting our faith in Tonya, we were immediately able to meet a long term goal and give our clients additional resources where ‘One Call Really Does Insure It All’. Tonya’s knowledge, sense of pride, and confidence immediately allowed us to establish a steady foothold when we decided to expand.” The growth accelerated at an even greater rate in 2004 when the David Crotts Agency joined the South Carolina Agent Network (SCAN). Tonya explains, “SCAN gave us the opportunity to represent multiple top rated carriers with minimum volume requirements - carriers we just would not have been able to access. It provided us the support we needed early on to ensure the agency’s set up and processes afforded the maximum revenue, now and in the future. SCAN has provided producer and sales training that is invaluable to our organization. We actually consider The South Carolina Agent Network another branch in our agency. “ For more information about how a relationship with SCAN could benefit your agency call Diane Wagner at (864) 278-0160 or email Also check out the website at

Fall 2008 • South Carolina Agent & Broker


More photos at on “Young Agents” page The events included two education sessions from Chris Amrhein, AAI (top left). The winners of the team-building challenges were recognized during the Beach Party (which was unfortunately rained out and moved indoors, top right and 2nd row right.) The next evening, everyone boarded a chartered boat to Savannah, Ga., for the evening. Young agent committee co-chairmen Charles Paul Midgley, Jr. (bottom center) and Paul Eaddy (bottom right) took turns with announcements.


South Carolina Agent & Broker • Fall 2008

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Employee Holiday Parties &

e z o o B

By J. Hagood Tighe Fisher & Phillips, LLC

- or 10 Ways to Avoid Getting Sued


ompany-sponsored functions involve risks, and serving alcohol compounds the problems. One study says that 36% of employers reported behavioral problems at their most recent company party. These problems involved everything from excessive drinking, off-color jokes all the way to unwelcome sexual advances and fist fights. As a result of these problems, about 30% of employers now hold alcohol-free parties. Since most employers still want to hold holiday parties, they can greatly reduce potential legal liability by observing as many of the following recommendations as possible:



If possible, don’t serve alcohol. This is easier to do if you simply have a catered lunch at the company’s offices.


Invite spouses and significant others so that there will be someone there to help keep an eye on your employees and, if necessary, get them home safely.

South Carolina Agent & Broker • Fall 2008


Always serve food if you serve alcohol, and always have plenty of non-alcoholic beverages available.


If your party is a dinner, consider serving only wine or beer (plus non-alcoholic alternatives) with the meal.


If you do serve alcohol, do not have an “open bar” where employees can drink as much as they want. Instead have a cash bar or use a ticket system to limit the number of drinks. Close the bar at least an hour before the end of the party, and switch to coffee and soft drinks.


Let your managers know that they will be considered to be “on duty” at the party. They should be instructed to keep an eye on their subordinates to ensure they do not drink too much. Instruct managers that they are not to attend any “post party” parties.


Consumption of alcohol lowers inhibitions, and impairs judgment. This can result in employees saying and doing things that they would not ordinarily do. Remind employees that, while you encourage everyone to have a good time, your company’s normal workplace standards of conduct will be in force at the party and misconduct at or after the party can result in disciplinary action.


Hire professional bartenders (don’t use supervisors!) and instruct them to report and cut off anyone who they


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Fall 2008 • South Carolina Agent & Broker


feel has had too much. Ensure that bartenders require positive identification from guests who do not appear to be substantially over 21. 2.

Arrange for no-cost taxi service for any employee who feels that he or she should not drive home. At management’s discretion, be prepared to provide hotel rooms for intoxicated employees


Never, Never, NEVER hang mistletoe! Yep, we’re not

kidding. Take a look at item number 4 again, and you’ll see why. Hagood Tighe is a partner in the law firm of FISHER & PHILLIPS LLP. He concentrates his practice exclusively in the labor and employment area in the firm’s Columbia office. He is certified as a specialist in Employment and Labor Law by the South Carolina Supreme Court. He can be contacted at (803) 255-0000 or via e-mail at

Holiday party advice to pass on to your clients A national survey conducted for Trusted Choice® finds that almost 75% of holiday party hosts do not have a personal umbrella insurance policy, leaving themselves open to potential lawsuits and facing financial ruin, should the worst occur. The remaining 25% of hosts say they don’t know what coverage they have, leaving them vulnerable too. If a party guest drinks, drives and causes an accident, the hosts can be held responsible in more than 30 states, including South Carolina. In fact, a majority of party hosts believe they should be held responsible, but despite this, most haven’t taken steps to protect themselves. A personal umbrella insurance policy goes above and beyond homeowners insurance and gives hosts extra liability coverage. Purchasing a personal umbrella policy, providing $1 million or more in additional liability coverage over the limit of a standard homeowners’ or renters’ policy, is a prudent move for the frequent party host, and can cost as little as $150 a year. A majority of people planning to host parties do not have a personal umbrella policy. People don’t buy umbrella policies because they think they have enough coverage from their homeowner and auto policies—but they don’t. The high dollar value of jury awards coupled with skyrocketing health care costs means one lawsuit can easily exceed the liability limits on the average policy. A lot of the advice offered in the study matches that of our above authors’: •


Meet with your Trusted Choice® agent before hosting a party to familiarize yourself with your state’s host liability laws, and to make sure you’re properly insured.

South Carolina Agent & Broker • Fall 2008

• • • • • • • •

• •

Limit your guest list to those you know. Host your party at a restaurant or bar that has a liquor license, rather than in a home or office. Provide filling food for guests and alternative nonalcoholic beverages. Schedule entertainment or activities that do not involve alcohol. Arrange transportation or overnight accommodations for those who should not drive. Stop serving alcohol at least one hour before the party is scheduled to end. Do not serve guests who are visibly intoxicated. Consider hiring an off-duty police officer to discreetly monitor guests’ sobriety or handle any alcohol-related problems as guests leave. Stay alert, always remembering your responsibilities as a host. Review your insurance policy with your agent before the event to ensure that you have the proper liability coverage.

About the research: The omnibus survey was conducted for Trusted Choice® via telephone by TRC, an independent research company in Fort Washington, PA. Interviews were conducted during November, 2006 among a nationally representative sample of 1,009 adults (defined as 18 years of age and older). The margin of error is +/- 3.1 percentage points at the 95% confidence level. Among only those who are planning a social gathering, the margin of error is +/-6.2 percentage points at the 95% confidence level. More information about TRC can be obtained at

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Legislative Review


Some SC House leadership changes will be watched closely by Insurance Industry




here will be a number of changes in South Carolina House of Representatives leadership for the next General Assembly (2009-2010) and the insurance industry will be very interested in a couple them. The long-time chair of the House Labor Commerce and Industry Committee (LCI) Rep. Harry Cato of Travelers Rest is a candidate for Speaker Pro Tempore, the number two position, and he is unopposed at this point. That means there most likely will be a new chairman of LCI, which reviews all insurance legislation, when the 118th General Assembly convenes in midJanuary. Cato has been at the forefront of all of the insurance reforms that IIABSC and most of the industry has supported in the past 11 years. He personally led the House battle to pass a Senate auto insurance reform bill that has given South Carolina the most envied competitive personal auto insurance market in the country. And although he did not initiate the workers’ compensation reform efforts over the past few years, he was the lead sponsor on House reform bills that have been the basis of two rounds of reform. Cato very carefully builds consensus in his committee on big issues and is a good floor leader on controversial legislation. Industry lobbyists are most interested in who might replace him. Many, including a number of upstate interests, have been hoping that Cato could be Speaker of the House by 2011. That hope grew out speculation that Speaker of the House Bobby Harrell was looking at running for Governor in 2010. Harrell, a State Farm insurance agent, however, has decided that he will


not run for Governor in two years. Cato could run against Harrell for the Speakership, of course, but that is unlikely unless there are divisive issues that split the House and wound the Speaker. Three members of LCI say they are candidates to be Chairman as of now: Rep. Bill Sandifer (R-Seneca), Rep. Wallace Scarborough (R-Charleston) and Rep. Nikki Randawah Haley (R-Lexington). Sandifer, a retired funeral director, has been elected to the House seven times. He has been chosen by Cato to lead the Business and Commerce Subcommittee and the Public Utilities Subcommittee. Sandifer was one of the earliest proponents of the



South Carolina Agent & Broker • Fall 2008

Lee Ruef, IIABSC Director of State Government Relations

need for workersâ&#x20AC;&#x2122; compensation reform. Scarborough is vice president of Atlantic Coast Life Insurance Company of Charleston, a family-owned business. He has been in the House for eight years and this past year chaired the Insurance Subcommittee for Cato. Haley also works in a family business. She is chief ďŹ nancial ofďŹ cer in a high-fashion retail operation in West Columbia. Haley has served just two terms in the House. Half of that time she has served on the LCI. Last year Cato appointed her to head the Banking Subcommittee in her second year on the committee. Haley spoke to the IIABSC Spring Conference in 2007, reviewing key legislative issues. Committee members keep their own counsel about chairmanship races, so there is no publicly known headcount at this time. There will be at least four vacancies in the LCI ranks of 18 members when the House meets to reorganize in December. Cato is likely to move up, three other Republican members have retired: Skipper Perry of Aiken, Dr. Tom Dantzler of Goose Creek and Glen Hamilton of Taylors. New appointments to the committee could decide who will chair it. Another signiďŹ cant change for the next General Assembly will be a new Majority Leader. Although Democrats say they expect to gain some seats (they hold just 51 of 124 now), it is most likely that the House majority will continue to be the Republicans. The Republican Caucus limits their leader to two terms so Majority Leader Rep. Jim Merrill of Daniel Island must step down. Three House members are presently seeking the post: Kenny Bingham of West Columbia, Mike Pitts of Laurens and Alan Clemmons of Myrtle Beach. Bingham heads an engineering firm he owns and has been in the House eight years. He served one year as Chair of the Insurance Subcommittee before receiving a sought-after appointment to the Ways and Means Committee. Pitts, who retired from the Greenville Police Dept., represents a district that covers parts of Laurens, Abbeville and Greenwood counties. He has been in the House six years serving on the Agriculture and Environmental Affairs and Ethics committees. Alan Clemmons is an attorney who has also served three terms. He is Secretary of the Republican Caucus, a member of the Judiciary Committee and Vice Chair of Rules. He is noted for giving his colleagues neck ties or scarves each year that display the state seal. Members, stay tuned to the monthly Agent News email newsletter for updates as we get them. We were pleased to play host to the SC House Majority and Minority leaders at the Political Roundtable during this monthâ&#x20AC;&#x2122;s annual convention, just in time to talk about next monthâ&#x20AC;&#x2122;s general elections and the upcoming legislative session.

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Fall 2008 â&#x20AC;˘ South Carolina Agent & Broker


What to Do With Those


and Their CARS

Terry Tadlock, CIC, CPCU CIC Education Consultant


ne of the most frequently asked questions I get concerning automobile insurance is “What should we do with our kids when they turn eighteen? Should we title the car in their name and put them on their own policy or should they stay on our (the parents’) policy?” This is a great question, but to give you an answer or even an opinion I must ask a few questions of my own. What are you trying to accomplish? Are you trying to avoid or limit personal liability? Are you trying to save money? Are you trying to provide the best coverage? As you can see the answer depends on many factors. The client must decide based on the goals they are attempting to accomplish. AVOIDING OR LIMITING PERSONAL LIABILITY: First, understand this is not an insurance question, it is a legal question. Since I am not burdened with a legal degree my suggestion is you refer your clients to seek legal counsel before they make this decision. However, keep in mind, not all attorneys are experts in insurance and have on occasion given inaccurate information. I will address a few concerns I have. Many think that by titling a vehicle in a child’s name and purchasing insurance in their name the parents can no longer be responsible. It has been my experience that although it is much more difficult to shift legal liability to a parent for a child’s action that has reached eighteen years old, it is not impossible. A term you may want to research is “parental vicarious liability.” This legal doctrine deals with the ability to pass on to a parent the responsibility for the actions of


South Carolina Agent & Broker • Fall 2008

We’ve Got South Carolina Covered. Aiken.............................3915 W. Richland Ave. .................... (803) 641-0135 Anderson ......................4018 Clemson Blvd. ........................ (864) 964-9211 Beaufort ........................2635 Boundary St. ........................... (843) 524-0494 Bluffton .........................22 Plantation Park Dr., #104............ (843) 706-2660 Cayce ...........................2308-D Airport Blvd. (CAE offsite) ... (803) 739-0073 Charleston ....................398 Meeting St. ............................... (843) 723-6215 Charleston ....................2004 Savannah Hwy........................ (843) 556-7889 Charleston ....................2440 Savannah Hwy........................ (843) 766-5160 Charleston ....................1500 Savannah Hwy........................ (843) 769-5833 Charleston Airport .........34810 Rental Car Ln. ...................... (843) 767-1109 Columbia ......................1436 Taylor St.................................. (803) 748-9214 Columbia ......................3014 Two Notch Rd. ........................ (803) 786-6957 Columbia ......................7611 1/2 Garners Ferry Rd. ............. (803) 776-9461 Columbia ......................3700 Fernandina Rd. ....................... (803) 750-6703 Columbia ......................1012 Broad River Rd. ...................... (803) 750-9764 Columbia ......................6143 St. Andrews Rd. ...................... (803) 772-7766 Columbia ......................100 Fontaine Center Rd. ................. (803) 333-9288 Columbia ......................10249 Two Notch Rd. ...................... (803) 419-4319 Conway.........................1793 Hwy. 501 East......................... (843) 347-4026 Conway.........................2709 Church St., Ste. A ................... (843) 369-7368 Easley ...........................4020 Calhoun Memorial Hwy........... (864) 269-2847 Florence........................2115-C W. Evans St. ....................... (843) 669-6309 Florence Airport ............2100 Terminal Rd. ........................... (843) 669-4868 Gaffney .........................1234 W. Floyd Baker Blvd. .............. (864) 489-6496 Georgetown ..................1051 N. Frasier St., Ste. 4 ............... (843) 520-4281 Greenville .....................501 Buncombe St. ........................... (864) 242-4748 Greenville .....................1500 Laurens Rd. ............................ (864) 233-8182 Greenville .....................531 Woodruff Rd. ............................ (864) 297-5579

Greenwood ...................1707 Hwy. 72 Bypass ...................... (864) 229-0749 Greer ............................14370 E. Wade Hampton Blvd. ....... (864) 877-0114 Greer ............................304 E. Frontage Rd. (GSP offsite) ... (864) 968-9452 Hartsville .......................1109 S. Fifth St., Ste. G ................... (843) 857-9088 Hilton Head ...................140-A Beach City Rd. ...................... (843) 689-9910 Lake City.......................140 W. Main St. ............................... (843) 394-5330 Lexington ......................5184 Sunset Blvd. ........................... (803) 951-1863 Lugoff............................610 Hwy. 1 South, Ste. J ................. (803) 438-0990 Marion...........................2510 E. Hwy. 76 .............................. (843) 275-7116 Mauldin .........................205 N. Main St. ................................ (864) 297-0089 Moncks Corner .............104 N. Hwy. 52 ................................ (843) 761-6557 Mt. Pleasant..................1145 Johnnie Dodds Blvd., Ste. E ... (843) 881-2489 Myrtle Beach.................1377 Hwy. 501 ................................. (843) 626-4277 Myrtle Beach Airport .....1100 Jetport Rd. .............................. (843) 916-0929 N. Charleston................8701 Rivers Ave., Unit 102 .............. (843) 572-8807 N. Charleston................8440 Dorchester Rd., Unit 5 ............ (843) 552-2150 N. Charleston................3630 W. Montague Ave. .................. (843) 767-5460 N. Myrtle Beach ............3401 Hwy. 17 South ........................ (843) 361-4410 Newberry ......................2004 Wilson Rd. .............................. (803) 276-4564 Orangeburg ..................1624 St. Matthews Rd. .................... (803) 534-0143 Seneca .........................204 Bypass 123 ............................... (864) 888-1115 Simpsonville .................798 South St. ................................... (864) 962-9573 Spartanburg ..................238 E. Blackstock Rd. ..................... (864) 576-6750 Spartanburg ..................986 Asheville Hwy............................ (864) 542-1838 Summerville ..................1216 N. Main St., Unit E .................. (843) 871-1036 Sumter ..........................21 E. Wesmark Dr. .......................... (803) 773-0550 Walterboro ....................608 Bells Hwy. ................................. (843) 549-6514 West Columbia .............1500 Charleston Hwy. ..................... (803) 791-1984

Pick-up is subject to geographic and other restrictions. ©2007 Enterprise Rent-A-Car Company. 804988 11/07 MM

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their children and the failure to properly supervise the activities of others (in this case your children). Most states will have statutes that define the limits that may be imposed or have some legal precedent based on case law in that jurisdiction. In Wilsen v. Lesser, 434 So.2d 1033 (Fla. 3rd DCA 1983) This decision stated, “Under existing Florida Statutory law, there is only one instance where a parent can be held vicariously liable for his or her child’s negligent operation of a motor vehicle absent an identifiable property interest in the vehicle such as ownership, rental, lease, conditional sale or bailment. Pursuant to section 322.09(2), Florida Statutes (1977), the parent who signs the driver’s license application for a minor child can be held vicariously liable for the child’s negligent operation of a motor vehicle. This responsibility ends when the child reaches age of majority.” This language seems to imply that a parent would not be responsible. Just keep in mind that we don’t know all of the facts of the case, and that this is Florida, not South Carolina. My concern is that when a client approaches you for advice, you will not know in what jurisdiction the loss will take place. Do you know what the courts are going to impose? Obviously, any limitation in this area will be good for the parent. Most of us have worried about being held responsible for the actions of our children since they were old enough to walk, or maybe that is just me. Proceed with caution here: Don‘t tell your clients what may or may not happen in court. In this area let the lawyers earn their money. JUST TRYING TO SAVE MONEY: I’m sure none of you have clients that make purchasing decisions based primarily on the price of the product, but in the event it ever happens we will look at the cost associated with making this decision. There are several issues that will affect price. First, you will lose your multi-car discount, which is usually about ten percent of the base premium for that particular car. If there is only one other car insured on the policy, both cars will both lose their discount. Second, your child will lose your purchasing power. Very few standard markets are going to give an eighteen-year-old on a separate policy the same rate they would have given them based on your relationship with the company. Third, many will try to mitigate the above cost considerations by purchasing lower limits of coverage. In my opinion this is not a good idea. I know that an eighteen-year-old may not have the assets the parents have accumulated. I also realize “you can’t get blood from a turnip.” But you are not a turnip. An accident that exceeds the limit of insurance purchased could very well lead to a judgment imposed and all the legal issues that go along with it. If a parent wants to move the child to a separate policy the same limits should be offered. 40

South Carolina Agent & Broker • Fall 2008

There is one situation when I do suggest parents consider moving the child to a separate policy. That is when the driving record of the child is jeopardizing the parent’s coverage. As a result of accidents or driving violations of the child the company intends to non-renew the policy, then a separate policy may be the only way to preserve the parents relationship with the company. But when you do it, recommend the same limits they had before. Now let’s get to the coverage issues. PROVIDING THE BEST COVERAGE IS OUR JOB: The ultimate test for an agent is to provide the best coverage possible. When your client is involved in an accident they are not going to ask how much they paid in premium, they are going to want coverage in place that adequately protects them. For this reason we are going to spend the majority of this article on the coverage issues. First, let’s look at the parents policy and see how it will respond if we move the child to their own policy. Remember, just because we move them to another policy, the parents’ policy wording has not changed. Since liability is the theme of this article we will concentrate on that coverage. (See “Definitions”)

DEFINITIONS: A. Throughout this policy, “you” and “your” refer to: 1. The “named insured” shown in the Declarations: and 2. The spouse if a resident of the same household. 3. “Family member” means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child. In the Personal Auto Policy we find two definitions that ultimately affect this coverage. They are “You” and “family member.” “You” is the person listed in the Declarations, and a “family member” requires two elements: residency and relationship. Even if we title a vehicle in a child’s name, if they still reside in our household, they meet the definition of a “family member.” But keep in mind this is a definition, not coverage. LIABILITY INSURING AGREEMENT: A. We will pay damages for “bodily injury” or “property damage” for which any “insured” becomes legally responsible because of an auto accident. Damages include prejudgment interest awarded against the “insured.” We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgments or settlements. We have no duty to defend any suit or settle any claim for “bodily injury” or “property damage” not covered under this policy. B. “Insured” as used in this Part means: 1. You or any “family member” for the ownership, maintenance or use of any auto or “trailer.” 2. Any person using “your covered auto.”

(See “Liability Insuring Agreement”). So far so good! The child is an insured under Part A Liability coverage according to the Insuring Agreement and the definition of an “insured.” We have suggested many times that when you are researching coverage in a liability contract you always start with one question, “does the person who is being alleged negligent have insured status?” In this case they do. The second question you must ask is, “does any exclusion apply?” Let’s look at a few and see how they may affect coverage. (See “Exclusions”).

EXCLUSIONS B. We do not provide Liability Coverage for the ownership, maintenance or use of: 2. Any vehicle, other than “your covered auto, which is: a. Owned by you; or b. Furnished or available for your regular use. 3. Any vehicle, other than “your covered auto,” which is: a. Owned by any “family member,” or b. Furnished or available for the regular use of any “family member.” However, this exclusion (B.3.) does not apply to you while you are maintaining or “occupying” any vehicle which is: a. Owned by a “family member;” or b. Furnished or available for the regular use of a “family member.” Although many agents immediately go to exclusion B.2, It does not apply to this situation. It is a vehicle other than your covered auto, but it is not owned by “you.” Remember the “you” in the policy is the person listed on the Declarations. This vehicle is owned by a “family member” because you transferred title. Exclusion B.2, applies to vehicles owned by the named insured that they did not insure or is furnished or available for the “you” on a regular basis. A good example of the application of exclusion B.2 is the company car furnished to a person listed on the Declarations. Exclusion B.3 does create a problem. It is a vehicle other than your covered auto, and it is owned by a “family member.” Therefore, there would be no coverage provided under the parent’s policy for the use of the vehicle you titled in the child’s name. However, there is an exception to this exclusion. It gives coverage back for the use of the vehicle owned by a “family member” to the “you” in the policy. For example, if Dad was driving the child’s vehicle, the child’s policy would pay on a primary basis because Dad is a permissive user. If the limits were not satisfactory to cover the loss, Dad could come back to his policy under the exception to the exclusion (B.3) and have his policy pay on an excess basis. The net effect is if you title a vehicle in a child’s name and insure it under a separate policy the parent’s policy will not cover the use of that vehicle by anyone other than the “you” in the parent’s policy. One additional coverage gap you may want to consider: If you have other children in the household covered under the parent’s policy (such as a younger sister) the parent’s policy would not provide coverage while using the vehicle titled and insured in the child’s name. The sister in this case is not a “you” on the parent’s policy; therefore, the exception to the exclusion Fall 2008 • South Carolina Agent & Broker


does not apply. She would have no coverage under the parent’s policy. She would be covered under the other child’s policy as a permissive user, which also reinforces the importance of limits being as high as the parents’. The last issue you may have to deal with is a driver exclusion endorsement. Many insurers will want the named insured to sign a driver exclusion form if they are not going to pay a premium for that driver. There is no standard ISO driver exclusion endorsement so read them carefully to find what coverage gaps they create. Most simply exclude any coverage provided under the policy for the driver listed. This would eliminate any coverage provided to the child under the parent’s policy if the child drives one of the parent’s vehicles. The child would still have coverage under their policy. Now to the policy issued in the name of the child. Obviously the policy will provide protection for the child as a named insured subject to the coverage provided in the form. Since the same definitions and exclusions apply, the coverage under the child’s policy will respond the same way we discussed for the parents. This policy will cover the child driving the vehicle listed as well as the vehicles owned by his “family members” because of the give back to the exclusion. The child’s policy will also cover others driving his vehicle with permission. This scenario should illustrate why it is important to have the same limits on the child’s policy that is carried on the parent’s. It will NOT cover any of his “family members” driving any of his parent’s vehicles. As you can see, one of the reasons for the above exclusion is to limit coverage to the vehicle being driven and to limit stacking of limits. POSSIBLE AFFECT ON PERSONAL THE UMBRELLA POLICY: Now that I have you totally confused, let me throw one more log on the fire. One final thought before you title the vehicle in the child’s name should be the affect it may have on your personal umbrella policy. We are finding little standardization in Personal Umbrella policies today, which makes it very difficult to answer the questions we have raised. Many personal umbrella policies will not provide coverage to family members who own their own vehicle. They will require they have their own policy. Consult your underwriter for a company decision on the application of coverage, then read the Personal Umbrella policy and see if it contains similar exclusions as we saw in the Personal Auto


South Carolina Agent & Broker • Fall 2008

Policy or if it addresses the issue in the conditions section of the policy. But if umbrella protection is important to you, don’t forget this final detail. I hope this article provides you with some food for thought when these questions are raised by your clients. As you can see not all questions can be answered with a simple “yes” or “no” response. Educate your staff that is dealing with the public on these issues …and happy motoring! Tadlock is a frequent instructor and speaker at IIABSC education events and state conventions. He spent most of his career as the principal of an independent insurance agency in Florida. He also supervised the creation of all state insurance exams with the Florida Department of Insurance and served on the national committee that sets standards for agent licensing exams before his work with the National Alliance for Insurance Education and Research as a CIC Education Consultant and National faculty member.

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Fall 2008 • South Carolina Agent & Broker


Executive Committee Chairman Julius J Anderson, Jr, AAI (Jules) Anderson Ins Assocs LLC Charleston, SC

Secretary W. Ashley Brady, CIC (Ashley) First Charter Co., Inc. Marion, SC

Chairman Elect/Treasurer Kathy D McKay, CIC CPIW (Kathy) McKay, Stelling & Assocs Mt Pleasant, SC

National Director John R Braddy, CIC, AAI (John) Braddy Insurance, Inc. Dillon, SC

Immediate Past Chairman Jon A Jensen, AAI AIP (Jon) Correll Ins Group Spartanburg, SC

Directors Faye R Bradham, LUTCF (Faye) Bradham Ins Agency Conway, SC

Russell G Parker (Russ) Riley and Associates Inc Mt. Pleasant, SC

W. Paul Eaddy, Jr (Paul) Adams Eaddy & Associates Columbia, SC

Jasper D Puckett, CPCU CRM CIC ARM AAI (Jack) Capstone Insurance Services LLC Greenville, SC

Kenneth A. Finch, CPCU CIC CRM AAI (Ken) Countybanc Insurance Inc Greenwood, SC

Christopher T. Tidwell (Chris), CPCU, CIC Tidwell Agency, Inc. Lexington, SC

Charles Paul Midgley, Jr. (Charles Paul) Midgley Agency, Inc. Bennettsville, SC

C. Ross Turner, III, CIC (Ross) Turner Agency, Inc. Greenville, SC

R. Scott Moseley (Scott) Irmo Insurance Agency Irmo, SC 44

South Carolina Agent & Broker â&#x20AC;˘ Fall 2008


NEW BENEFIT: Risk Management newsletter and Web site

New risk management Web site:

October 15-16 Brokers Pre-Licensing, Columbia, 12 hrs P&C 28 Insuring Personal Residential Exposures (CISR), Columbia, 7 hrs P&C 29 Agency Operations (CISR), Charleston, 6 hrs P&C or L&H, 1 hr Ethics

November 6 6 11 11 12-14 19 20

Insuring Commercial Property (CISR), Bluffton, 7 hrs P&C Insuring Personal Automobile Exposures (CISR), Greenville, 7 hrs P&C Insuring Personal Residential Exposures (CISR), Florence, 7 hrs P&C E&O Risk Management, Columbia, 8 hrs P&C or L&H CIC Commercial Casualty Institute, Hilton Head, 20 hrs P&C Agency Operations (CISR), Columbia, 6 hrs P&C or L&H, 1 hr Ethics Agency Operations (CISR), Myrtle Beach, 6 hrs P&C or L&H, 1 hr Ethics

26 26

Long Term Care, Greenville, 8 hrs L&H Dynamics of Service (CISR), Columbia, 8 hrs P&C or L&H

March 2009 4-6 10 11 11 10 17 18-19 20 24-26 31

Agency Management (CIC), Greenville, 16 hrs P&C or L&H, 4 hrs. Ethics Insuring Commercial Property (CISR), Greenville, 7 hrs P&C Insuring Commercial Property (CISR), Columbia, 7 hrs P&C Agency Operations (CISR), Florence, 6 hrs P&C or L&H, 1 hr Ethics Errors & Omission, Charleston, 8 hrs P&C or L&H Insuring Commercial Casualty (CISR), Rock Hill, 7 hrs P&C 2009 Spring Conference, Columbia AAI 82C, Columbia, 7 hrs P&C Spring Road show: Edwards seminars, TBD, 6 hrs P&C Brokers Licensing exam review, Charleston, filed for 8 hrs CE

December 4 9 17 18 19

Insuring Personal Residential (CISR), Charleston, 7 hours P&C Insuring Personal Auto (CISR), Columbia, 7 hours P&C Personal Lines Perils and Pitfalls, Bluffton, 6hrs P&C Business Income – the Mystery Continues, Charleston, 6 hrs P&C Business Income – the Mystery Continues, Columbia, 6 hrs P&C

January 2009 7 14 15 21 22 27 27-29

AAI 82A, Columbia, 7 hrs P&C or L&H Insuring Personal Residential (CISR), Myrtle Beach, 7 hrs P&C Brokers Licensing exam review, Columbia, filed for 8 hrs CE Errors & Omission, Rock Hill, 8 hrs P&C or L&H Insuring Commercial Casualty (CISR), Columbia, 7 hrs P&C Dynamics of Service (CISR), Greenville, 8 hrs P&C or L&H Elite Sales School, Columbia

February 2009 4-6 4 10 10 11 17-20 24 25 46

April 2009 22-24 Ruble Graduate Seminar (CIC), Myrtle Beach, 20 hrs CE

Commercial Casualty (CIC), Columbia, 20 hrs P&C Insuring Personal Auto (CISR), Charleston, 7 hours P&C William T. Hold (CISR), Bluffton, 8 hrs CE

Do You Have Enough Coverage? :on’t wait to find out that the insurance you purchased online or from an 800 number gave you a discount on the wrong coverage. Talk to your neigborhood independent Auto-Owners agent, about a policy that fits your needs and budget. Visit today and form a valued relationship, that won’t let you down in a time of need.

AAI 82B, Columbia, 7 hrs P&C or L&H Errors & Omission, Florence, 8 hrs P&C or L&H

Go to to locate an agent in your neighborhood.

Road Show: Tadlock seminars, TBD, 6 hrs P&C Long Term Care, Charleston, 8 hrs L&H Long Term Care, Columbia, 8 hrs L&H

South Carolina Agent & Broker • Fall 2008

12327 (3-07)

The Strength To Weather Any Storm. The Power To Provide Brighter Solutions.

Alan Jay Kaufman Chairman, President & CEO

At Burns & Wilcox, we believe strong leadership ensures a bright future. With Alan Kaufman’s vision, we’ve grown into North America’s largest and most capable specialty insurance wholesaler. Our unique ability to provide comprehensive specialty risk coverage, especially in this challenging and stormy market, is the result of a national network of experienced underwriters and brokers who give us the strength to grow regardless of what’s on the horizon. So if you want a company with the foresight to stay ahead of the storm, turn to the professionals with the speed, intelligence and agility to get the job done — the specialists at Burns & Wilcox.

Morehead City, North Carolina Independent Insurance Agents & Brokers of SC 800 Gracern Road Columbia, SC 29210

252.726.8992 fax 252.726.9484 PRSRT STD U.S. Postage

PAID Permit No. 1467 Fort Worth, Texas


South Carolina Agent & Broker • Fall 2008

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SC Agent & Broker magazine - Fall 2008  

Trade publication by the Independent Insurance Agents and Brokers of SC for the entire industry, members and nonmembers alike. Vol. 2, ed.4...