2020 Fall Magazine Edition

Fall 2020 • Tennessee

PAGE 14

BE YOUR CLIENT’S HERO

Provide premium service during times of need

PREPAREDNESS 7

Three C’s of telework

19

Planning means partnerships

23

What file has the mistake?

The Silver Lining® shines through on claims survey West Bend is Number 12 and earns B+ on Crash Network’s 2020 Insurer Report Card

When more than 1,000 collision repair shops around the country graded auto insurers on how they handle claims, West Bend ranked Number 12 of 79 and earned a B+ rating!

This ranking highlights West Bend’s exemplary claims service, not just price and brand recognition. We’re proud to be included on this list as it shows repair shops how we take care of our customers.

Crash Network is an independent source of news, views, and information vital to the collision industry. Find out more at https://www.crashnetwork.com/irc.php.

DEPARTMENTS 4 Fall 2020 • Tennessee

In brief

7 Legal 11 Risks 21 Sales 23 E&O 26

Readers’ service and advertising index

27

Officers and Directors

COVER STORY 14 Be your client’s hero Provide premium service during times of need

FEATURE 19 Take action quickly Planning for disasters includes partnerships

Statements of fact and opinion in PIA magazine are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the Professional Insurance Agents. Participation in PIA events, activities, and/or publications is available on a nondiscriminatory basis and does not reflect PIA endorsement of the products and/or services.

President and CEO Jeff Parmenter, CPCU, ARM; Executive Director Kelly K. Norris, CAE; Communications Director Katherine Morra; Senior Magazine Designer Sue Jacobsen; Editor-In-Chief Jaye Czupryna.

Postmaster: Send address changes to: Professional Insurance Agents of Tennessee, 504 Autumn Springs Court, Suite A-3, Franklin, TN 37067.

“Professional Insurance Agents” is published quarterly by PIA Management Services Inc.PIA Management Services, 25 Chamberlain St., P.O. Box 997, Glenmont, NY 12077-0997; (518) 434-3111 or toll-free (800) 424-4244; email pia@pia.org. ©2020 Professional Insurance Agents. All rights reserved. No material within this publication may be reproduced—in whole or in part—without the express written consent of the publisher.

COVER DESIGN Roberta Lawrence

IN BRIEF

FROM THE PRESIDENT

To all PIA of Tennessee members It is my duty to inform you that Kristopher Fisher is no longer with PIA of Tennessee. We would like to thank Kristopher for his service to PIA over the years, and we wish him the best in his next endeavors. PIA of Tennessee is proud of what we are accomplishing for agents all around our state and we are excited about our plans to move forward. We will be communicating with you more formally about these plans soon.

Let me encourage all of our members to take full advantage of all the many business-building programs offered

by PIA that help add to an agency’s bottom line. These include products you can sell to your clients, those you can purchase for your agency, and a host of agent tools devised and made available by our national carrier council, The PIA Partnership.

PIA of Tennessee provides all of our members with access to a full array of advocacy, both in Nashville and in Washington, D.C. We take the case of agents to state

4

legislatures, Congress and before regulatory agencies. PIA is well-known for its excellent agent education offerings.

And, if you’re coming up on your errors-and-omissions policy renewal, check out PIA’s many options, which can provide great coverage and save you money.

If you haven’t done so in a while, let me suggest that you take a few minutes and look at all of what PIA of Tennessee has available for you. Just go to our website at piatn.com and also check out PIA National’s website pianet.com/.

2020 has been an exceptionally challenging year for independent insurance agents and for all Americans. PIA remains committed to being what we are: The best association for agents in Tennessee, bar none.

Sincerely, Neal McConnico President of PIA Tennessee

PROFESSIONAL INSURANCE AGENTS MAGAZINE

PLATINUM PARTNER PROFILE

s

PIATN.COM

5

PLATINUM PARTNER PROFILE

TIRED OF WASTING SO MUCH TIME WITH YOUR OUTDATED AGENCY MANAGEMENT SYSTEM? TRINILOGICS’ “JAMS” AGENCY MANAGEMENT SYSTEM IS THE SOLUTION.

6

PROFESSIONAL INSURANCE AGENTS MAGAZINE

The three C’s of telework This month’s Legal article is brought to you by the letter C—specifically the three C’s of telework. Telework is something that many agencies have a lot of experience with right about now. More employees are working remotely than ever. Many of those transitioned to remote work with little warning or planning.

This can create many issues—too many to address in a single article. However, in the spirit of not letting perfect get in the way of better, let’s address just a few of the myriad issues that employers may face regarding telework.

Compensation The first C is compensation. Specifically, overtime pay. The Fair Labor Standards Act, requires employers to compensate employees1 who work more than 40 hours in a workweek by paying them one-and-half times their normal wages for any hours worked over 40. This has tripped up innumerable employers since the passage of the FLSA in 1938. Telework only exacerbates the chances of an issue arising.

What are the issues? The aforementioned FLSA requires an employee to be compensated not only for work that is requested, but also for any work that is “suffered or permitted.” In other words, if employees work longer then they are requested to they must be compensated for that time. When employees are in the office this can be a somewhat straightforward issue to monitor and correct.

The two easiest ways to limit unauthorized works when employees are in-office are to make sure they are not physically in the building working more hours than they are unauthorized to, and to limit an employee’s ability to operate remotely—particularly after hours. These options are more difficult when employees are working almost exclusively remotely. A manager cannot take a lap around the office to ensure everyone is out of the office after 5 p.m. Instead, he or she would need to monitor each remote employee individually to ensure no one is working more than he or she should. That is inconvenient at best, and at worst, antithetical to the point of remote work. One of the main benefits of remote work is the flexibility it grants employees to work nontraditional hours. During the COVID-19 outbreak, many employees have been pulling double and triple duty as parents and teachers to children whose school years were cut short. Those employees enjoy the flexibility to care for their children during the day and work primarily an evening schedule. Similarly, limiting

PIATN.COM

LEGAL

BRADFORD J. LACHUT, ESQ. Director of government & industry affairs, PIA Northeast

an employee’s ability to “remote in” takes away the flexibility that makes telework so appealing.

What can be done? Before we address the steps that employers can take to ensure unauthorized hours are not worked, let’s first address what cannot be done. First, if an employee works unauthorized hours an employer cannot refuse to compensate that employee for those hours. Withholding compensation for hours worked, even unauthorized hours, is illegal and is the easiest way for an employer to find itself before the National Labor Relations Board where the employer will be required to pay the wages it withheld and it probably will be fined for good measure. It is well-settled that employers are not permitted to sit back and accept the benefit of employees work without compensating them for it.

What should an employer do? The best thing is to develop a comprehensive policy on telework. The policy should instruct employees on their work-hour requirements.

If an employee wishes to deviate from those requirements—either by working more hours or different hours—he or she should be required to obtain authorization to do so. The policy also should include what the consequences are for performing

7

unauthorized work. While an employee must be paid for unauthorized work, it is well within an employer’s authority to take disciplinary action against an employee who does (this includes terminating the employee).

Cybersecurity The next C is cybersecurity. Prior to the COVID-19 outbreak, cyber-security was perhaps the biggest issue facing insurance agencies. Many states have enacted regulations or laws imposing requirements on insurance agencies to protect their information systems adequately, and by extension the information stored therein. That has proven a challenge for many agencies. Under most cyber security laws, agencies are required to ascertain how secure their information system is from outside threats. An information system is typically an agency’s server and all the devices that connect to it. Generally, when employees are in the office this would include all of the computers being used within the four walls of the office. Telework, especially on a large scale, adds a wrinkle to the issue of cybersecurity in two distinct ways: scope and variability.

Let’s look at this through a hypothetical. Odin & Sons Insurance Agency has 10 employees. Each employee has his or her own desktop computer at a workstation. Since the agency owns and controls each computer, Odin & Sons knows that each computer has the most up-to-date firewall and antivirus software, that only authorized individuals can access the system and that all data is encrypted both at rest and in transit. Now let’s remove all of Odin & Sons employees from the office and put them at home. Now instead of one access point, each employee has at least three (a computer, tablet and phone). In addition, Odin & Sons has no idea the level of security protection on each device, or if the employees are storing data locally without any encryption protection.

Result: Odin & Sons quickly went from a secure system to a series of question marks that could lead to a cyber security incident that compromises the agency information systems.

What is an agency to do? Unfortunately, there is no way to mitigate the risk of a cyber security attack completely, whether telework is involved or not. However, there are ways to reduce the chances of a successful attack significantly.

Agencies can first limit the use of employee-owned devices by providing company-owned devices to those employees who are working remotely. This grants an agency some peace of mind about the software protections on each device. Agencies also can require that employees only access agency data through a virtual private network. A VPN is a private, secure connection that utilizes a public connection (i.e., the internet). Think about it as a lane on a public highway that only you can use. Typically, VPNs are encrypted and require multiple-factor authentication to access them. Employing either, or preferably both, of the above can increase the privacy and security of remote work significantly.

Confidentiality The third C is confidentiality. On a daily basis, employees in almost every profession have access to an astounding level of confidential information. This is particularly true in an insurance agency in which employees often are collecting everything from credit card information to highly sensitive health information. As with both the other C’s, when employees are in-office an agency has more ability to keep information confidential than when employees are teleworking.

In-house, employees are saving and storing information on a secure network. In addition, agencies can ensure that employees are disposing of physical copies of confidential information in the proper ways (e.g.,

8

PROFESSIONAL INSURANCE AGENTS MAGAZINE

shredding). When employers are teleworking this becomes more difficult. We already touched on how employee computers are not as secure as work computers. There also is the issue that an employee’s personal computer may not be a personal computer at all. Multiple people may share a personal computer—each with access to all the information contained on it. Further, agencies cannot guarantee the secure disposal of physical copies of confidential information.

What is to be done? Fortunately, many steps to address cybersecurity also protect confidential information. That really is the main point of cybersecurity. In addition to the steps mentioned in this article, agencies should prohibit employees from saving any confidential information on their personal computers. Any work-related information stored on

the personal computer should only be able to be accessed by a unique log-in that the employee keeps confidential. In addition, employees should be prohibited from printing any confidential information.

A fourth C, control All the potential telework issues discussed in this article can be summarized by a loss of control. A loss of control is scary, especially when you are discussing your livelihood. However, this article should not discourage telework. Permitting telework brings a host of advantages for an agency (e.g., reduced overhead, the ability to attract and retain a more diverse workforce and workers’ flexibility).

What is to be done? This article is meant to shine a light on some of the issues that agencies, or any business, may overlook when thinking about telework.

You don’t have to be scared of a loss of control. Instead, you need to embrace it through the development of written policies and procedures that replicate in-office control as much as possible.

Lachut is PIA Northeast’s director of government & industry affairs.

Be aware that not all employees are entitled to overtime. Only nonexempt employees are required to be paid overtime. More information on this issue can be found in QS90890—The FLSA: Attack of the overtime in the PIA QuickSource library.

1

Design+Print PIA Design & Print offers a one-of-a-kind relationship between you, your brand, and our diligent, creative and unique team of hardworking professionals whose top priority is building your business. You are important to us—let us show you!

Contact Design & Print today to make the most of your business.

(800) 424-4244 | design.print@pia.org | pia.org/design&print

PIATN.COM

9

Cybersecurity is critical to business continuity Business owners continue to struggle to grasp how cybersecurity—when paired with cyber security insurance—is vital to protecting their business continuity. Many small- and medium-sized enterprises continue to do nothing to protect themselves from a cyberattack, and most do not have standalone cyber insurance policies.

This lack of action poses a real risk to these businesses. Consider that 60% of small businesses fold within six months of a cyberattack, according to Inc. Magazine,1 which stated: “The best defense is a good offense. Make it a priority to protect your data for the benefit of your employees, your customers and the long-term health of your business.”

Business owners need to understand the critical nature of security and insurance for their own business continuity. Concerns are only growing, as states implement new laws to protect consumers’ data.

RISKS

JEFF HOLMES Senior vice president and COO, SIAA

This article will identify why cyber security protection is vital; why it is required for independent agents; and why businesses need to understand what can or will be impacted if they don’t take cyber security vulnerability seriously.

Have a plan No one wants their customer or company data breached, but if a business operates with technology, accepts payments online, and stores

For Dwelling and Mobile Home Insurance, put your trust in a company that has been insuring homes for over 50 years.

20 %

CO NEW M BU M SI IS NE SI SS O N

Our Products: • Dwelling Fire/Mobile Home • Comprehensive Mobile Homeowner’s • Limited Homeowner’s

Can Provide You With: • • • • • •

20% New & 15% Renewal Commission AAIS Policy Forms Direct Contract with National Security Partnership Profit Sharing Fast Online Policy Issuance Easy Payment Options

National Security has provided competitive, affordable insurance to policyholders for over 50 years, but we also provide a lot for our agents, with competitive commissions, excellent customer service and experienced company adjusters. As an admitted Southeastern based regional company, National Security prides itself on fast, efficient service from a friendly small town company, and online access for all agents, providing fast quotes, online policy issuance, online dec page printing, and real-time policy information.

Find out more by calling Sharon at 1-800-239-2358 x213 or visit nationalsecuritygroup.com.

PIATN.COM

Elba, Alabama

11

confidential data, it needs protection from top to bottom. That’s why insurance carriers insist independent agents have cyber security coverage for themselves and their third-party vendors: It reduces liability all around. It also brings them into compliance with the October 2017 law enforced by the National Association of Insurance Commissioners. The NAIC’s Insurance Data Security Model Law created rules for insurers, agents and other licensed entities covering data security, investigation and notification of breach. Obviously, independent agents need a cybersecurity and cyber insurance policy in place, and buying it for their own agencies helps them to become conversant about its necessity in general.

But, are independent agents asking their vendors if they are cyber-secure and have cyber security coverage? Is every one of the vendors compliant and meeting the rules and regulations for the carriers with which they work? No business—large or small—is immune to cyberattacks. Even if a business does have cyber security measures in place and has invested in a cyber insurance policy, it may be impacted by a third-party vendor being attacked, and a criminal gaining entry to one of its channels remotely.

Rather than targeting one company, cybercriminals often target vendors that work with many organizations (e.g., cloud services, email servers and payment platforms) in an effort to steal data from several companies. Businesses need to understand who their third-party vendors are and how much information is shared with each of them. This includes knowing what data and networks they’re able to access and determining if they need the level of access they have.

You need to consider state and federal compliance requirements. Right now, it costs less to comply with cyber security regulations than it does not to be in compliance. A report by the Ponemon Institute and GlobalScape2 found that noncompliance costs 2.71 times more than the cost of maintaining or meeting compliance requirements. The noncompliance costs come from the expenses associated with business disruption, productivity losses, fines, penalties, and settlement costs, among others.

Europe has implemented an extensive data protection law, which affects business owners working with cyberdata (General Data Protection Regulation) and any business with European clients. Currently, many U.S. states are adopting their own compliance regulations (e.g., Connecticut, New Hampshire and New York). California passed a plan (California Consumer Privacy Act), which is the strictest data protection law in the U.S. The law took effect in January, and it is expected to compel companies that already buy cyber security insurance to reach out to their brokers to ensure their policies are compliant. This law applies not only to company data, but also to data kept by vendors and third-party groups.

Each state is working on these types of data privacy laws, which will affect small businesses and require greater cyber security, compliance and cyber insurance policies. According to NCSL.org, 31 states enacted cyber securityrelated legislation in 2019.

12

PROFESSIONAL INSURANCE AGENTS MAGAZINE

Are small businesses ready?

An estimated 43% of cyberattacks target small businesses, according to the Verizon 2019 Data Breach Investigations Report.3 According to the 2018 Hiscox Small Business Cyber Risk Report,4 only 16% of small businesses are very confident in their cybersecurity readiness. Areas in which businesses fall short are: • Willingness to respond. Remarkably, 65% of small businesses have failed to act following a cyber security incident.

• Training. Less than one-third (32%) of small businesses have conducted phishing experiments to assess employee behavior and readiness in the event of an attack.

• Insurance. Less than a quarter (21%) of small businesses have a standalone cyber insurance policy, compared to more than half (58%) of large companies.

Best practices These cyber security best practices should increase the security of all small businesses: No. 1: Prevention. Involve and educate all levels of the organization about cyberthreats. Have a formal budgeting process and ensure cyber is a part of all decision-making.

Implement cyber security training during the on-boarding process and in an ongoing manner.

No. 2: Detection. Include intrusion detection and ongoing monitoring on all critical networks. Track viola-

tions (both successful and thwarted) and generate alerts using both automated monitoring and a manual log.

Record all incident response efforts and all relevant events.

No. 3: Mitigation. Create a plan for all incidents, from detection and containment to notification and assessment, with specific roles and responsibilities defined.

Review response plans regularly for emerging threats and new best practices. Insure against financial risks with a standalone cyber insurance policy or endorsement.

Forty-eight percent of data breaches occur because of the negligence of employees or contractors.5 Broaden awareness across your organization today. Individuals should know better than to share personally identifiable information with just anyone, so make sure everyone on your staff uses the same caution at work. It may seem obvious, but it’s best to state in writing that all company data, sensitive information, or intellectual property is not to be shared. Create and implement a business policy that defines why cyber risk prevention is critical to your business, sets guidelines for prevention of cyberattacks, and identifies a lead person in charge of cyber risk issues in the event of suspicious activity or a cyberattack.

Make training mandatory for all staff so that everyone understands what cyberrisk is and what common attacks look like. Teach staff about phishing and malware, and the many ways these attacks can occur.

Discuss different tactics cybercriminals use regularly, like creating fake emails and websites that look legitimate to make an employee more vulnerable. Quiz your staff on what

they have learned after training so it is clear that cyber risk prevention is everyone’s responsibility (it also will help evaluate its effectiveness).

Every staff member must be diligent to prevent cyberattacks. Execute a strategy for the entire business and assign responsibilities to prevent, detect, and mitigate immediately so that each staff member is proactive about prevention, detection and mitigation.

A growing market On the upside, there is a growing cyber insurance market in commercial lines for independent agents, especially those who are educated on the risks associated with technology and systems, cyber security strategies and coverages available. [EDITOR’S NOTE: PIA members can call the association to discuss cyber security policies that are available to them through PIA.] Agents who help their clients to remove the mystery behind cyber—and provide simple solutions to move clients toward better security and cyber security insurance—can improve their income and build a niche.

Clearly, cybersecurity must be prioritized with the urgency it deserves and within the limitations of a business’s budget—and independent agents should be able to educate their small-business clients on how to purchase the best cyber security insurance, while meeting the list of state-specific compliance regulations and requirements. They need to be aware of the compliance requirements of each of their carriers and brokerage contracts due to their status as an affiliate of the carrier or brokerage as well.

With so many people working remotely because of COVID-19, and as small businesses everywhere make sure they are taking all necessary steps to protect their critical information and their clients’ data, independent agents can proactively advise clients to implement these security measures, coupled with cyber security policies and standalone cyber insurance policies to ensure the safety of their businesses long-term.

Holmes is the senior vice president and chief operating officer of SIAA (Strategic Insurance Agency Alliance). Reach him at jeffh@siaa.net.

1

Inc. Magazine, 2018 (bit.ly/34fItZF)

2

Ponemon Institute and Globalscape, 2017 (bit.ly/38B4khL)

3

Verizon, 2019 (vz.to/2PjGfnT)

4

Hiscox, 2018 (bit.ly/36y8kh7)

5

Small Business Trends, 2019 (bit.ly/2thxsdN)

PIATN.COM

13

14

PROFESSIONAL INSURANCE AGENTS MAGAZINE

DOUGLAS MOHR Vice president of industry relations and partnerships, Vertafore

Be your client’s hero

Provide premium service during times of need

T

he year 2020 will go down in history as the year in which professional independent agents were put to the test, and had to put every plan in place to deal with the global pandemic as well as the natural disasters that have occurred (e.g., Hurricane Laura and hurricane-force winds in Iowa). The entire planet has had to adjust to how we approach our work and daily lives dues to the global pandemic caused by the COVID-19 virus.

PIATN.COM

15

For insurance agencies, continuing to operate during a natural disaster and effectively serve customers is a major challenge. But it is why we are in the business of insurance: To take care of policyholders in their time of need; and there is no bigger need than during a time of crisis such as a natural disaster.

Whether it is a hurricane on the East or Gulf Coasts, an earthquake on the West Coast, tornado in the plains, or pandemic, no matter the event, it’s a crucial time for insurance partners to step in and assist their clients.

Professional independent agents provide a personal touch that a national carrier may not be able to in the critical hours or days after a natural disaster. While carriers will have boots on the ground as quickly as possible, it’s the independent agents’ regional presence during these times that prove value to each and every policyholder in their book of business.

Not only do significant events generate an influx of claims, but these events also deliver exponential levels of pressure and heightened customer expectations.

While agents are known for risk management and evaluation, disasters can put even the most seasoned agents into a tailspin, and bog them with operational inefficiencies and technology that does not deliver against pressing needs.

While carriers will have boots on the ground as quickly as possible, it’s the independent agents’ regional presence during theses times that prove value to each and every policyholder in their book of business.

When it comes to disaster preparedness, agents should take their own risk management advice and test their technology and systems for inefficiencies ahead of time. Preparing for a disaster does not just apply to assisting with claims, but also being able to continue to service customers even when agents may not be able to get to the office or resume work as normal.

If you have not tested your disaster planning and recovery systems, now is the time to do so. It’s advantageous not to wait until the moment when nature delivers a blow to your town and knocks out power to the agency for hours or even days.

At Vertafore, we’ve seen more customers moving to the cloud, shifting vast amounts of data storage from on-site to online. In fact, just before Florence hit, one customer in North Carolina had converted from an on-premise, locally hosted version of a Vertafore product to its cloud-based version. This ended up saving the customer from having to rebuild servers and restore from back-ups, which could have taken days to recover and render them unable to service their local customers.

In addition to testing an agency disaster plan and having an agency management system available 24/7 for remote access via desktop or laptop, there are

16

PROFESSIONAL INSURANCE AGENTS MAGAZINE

other ways to leverage technology to improve efficiency during times of heightened anxiety and stress, while still providing the best possible customer service.

Solutions to streamline workflows The easier a system is to use, the more adoption an agency should expect.

A key to adoption is minimizing multiple keystrokes, and reducing the extra files that the staff may keep on their hard drives to bypass a cumbersome system. By eliminating the need for dual entry and manual effort, agents’ workloads are streamlined and they’re able to spend less time working on redundant tasks and more time on the things that matter.

One, central filesharing location If you’re already using a central storage system, you should be proud of your accomplishments. While some content management systems still store files locally, there’s a major shift toward storing documents in the cloud to reduce the risk of agents not having access the files they need when they most need it. Recommendation: Agencies should conduct an audit with its full staff to determine how many files are stored outside of the current system and establish a plan to get those files in a cloudbased document repository. Ideally, integrate your content repository and your agency management system.

By migrating files to the cloud now, your agency will be poised to better handle disaster events and continue to operate as seamlessly as possible.

Embrace RealTime reporting Monitoring the progress of critical processes (i.e., claims submissions or bottlenecks that are preventing jobs from getting done), will ensure agents provide service to clients in a timely fashion. Another avenue to approach prior to a catastrophic event is to reach out broadly to clients ahead of a potential danger. In our real-time world with news up to the minute, clients expect round-the-clock communication and it’s integral for agents to keep clients updated on an evolving threat. Unfortunately, history does repeat itself, and agents can serve as a calming force during the storm.

Build a dynamic and agile workforce Beyond tools, establishing an agency staff that is resilient, nimble and empathetic is crucial to processing claims efficiently and upholding customer service. This is when executing on your disaster recovery plan can come into play. [EDITOR’S NOTE: If you don’t have a disaster recovery plan, access PIA’s Agency Preparedness and Recovery Plan via the PIA website under the “Tools and Resources” tab.]

Like sports, practice makes perfect and it is no different in the insurance industry. Agents who haven’t practiced their plan by shutting down the office and asked all of staff to login during normal work hours from home to simulate a potential situation during a disaster may run into surprises when you need them the least. Having your team ready to respond during a natural disaster is critical to providing your clients with the service they need.

Prepare for the next one The period after a major storm like Florence and Michael is a great time to think about preparing for the next one. Whether an agency’s clients experienced damage the storm, the scope of damage brings attention to their vulnerability and creates an opportunity for a coverage review. Broadly, there are three types of major storms to consider. Hurricanes make the largest news events, but inland customers may believe they are insulated. Dramatic rainfall and the resulting flooding can be a surprise.

Convective storms, including tornadoes and severe thunderstorms, are major cause of damage. According to Karen Clark & Co., convective storms can be responsible for up to $25 billion annually, with a lot of that damage being done by hail.1 Winter storms are the third major category. Given the range of these types of storms, virtually every place in the country has significant risk.

Conducting a coverage review with clients at this time of year is a good idea.

Personal-lines clients should think about flood and windstorm coverage.

Often, flood risk is misunderstood, and clients outside of a Special Flood Hazard Area may believe they are not exposed to a flooding risk since the National Flood Insurance Program does not mandate the coverage. For wind, separate coverage or an examination of deductibles may be appropriate. Residential clients also may want to consider temporary living expenses and scheduled property.

Commercial clients face similar property risks, but standard limits like flood coverage may be too low for commercial property and excess coverage could be appropriate. Beyond property, make sure your clients understand their coverage for business interruption and supply-chain risk. An Insurance Knowledge Base can be helpful in understanding the specific risks that your commercial clients face beyond the straightforward property damage. Looking at the risks faced by your clients and advocating to fill coverage gaps can improve your relationships and help them be ready for the next storm.

Insurance agents become more than a business partner during natural disasters—often, they serve as a lifeline for their clients during some of the most difficult times. Beyond continuing to operate effectively, agents can leverage technology to strengthen relationships with their clients and ultimately, take the best possible care of them when it’s most needed.

Mohr is focused on keeping Vertafore engaged with key trends and industry players like PIA, ACORD and IASA, he builds technology partnerships with vendors that leverage Vertafore’s open ecosystem to provide valueadded solutions to better serve our joint customers. Prior to his current role, Mohr spent eight years as Vertafore’s VP Solution Consulting, on the front lines of solving customers’ complex problems with Vertafore’s innovative solutions. Before joining Vertafore, he spent three years as mid-market solutions director for SAP, and he worked in the logistics and supply chain industry in pre-sales and product management roles with ClearOrbit, Essentus (now Genesta) and JBA International.

1

Karen Clark & Co., 2018 (https://bit.ly/2OYLnhT) PIATN.COM

17

KATIE MILLER Oregon marketing director, BELFOR Property Restoration

Take action quickly Planning for disasters includes partnerships In seconds, everything can change. Everything can be stopped, leaving your business, or your clients’ businesses, in jeopardy. In any disaster, quick response draws a fine line between recovery and irreversible damage. The first steps taken in the aftermath of a disaster are the most critical.

At some point, your agency, or your clients’ businesses may feel the effects of a disaster that will do physical damage to the building. By planning and partnering with a restoration company ahead of time, a business will experience less interruption and return to normal operations in a shorter period of time.

Why have a partnership?

Disaster recovery begins before the disaster occurs. What you do beforehand will save you time and money. Since disasters don’t always occur Monday through Friday, between the hours of 8 a.m.-5 p.m., having recovery plans and authorizations in place can make a crucial difference when every minute counts.

Selecting a contractor out of desperation could become more disastrous than the event itself. Without a formal

partnership in place prior to a disaster, a business owner might have to find a restoration company by researching them online at 3 a.m. At that point, it is difficult to decipher qualifications, and the business owner might select a contractor that is not able to fulfill all the needs that the facility requires. Whereas selecting a multifaceted emergency-service contractor ahead of time allows the business owner the assurances that the staff members, clients and buildings will be in good hands.

Additionally, having a partnership with a restoration company allows you priority over others during a largescale or regional event. For example, below-freezing temperatures in one area can cause pipes to freeze, and once the thaw begins, the cracks can cause the pipes to leak, so it’s possible for a restoration company to receive more than 100 calls in a 24-hour period. While the damage from this one incident can be devastating, a restoration company will prioritize its calls, taking care of the businesses it has established relationships with before addressing the needs of other businesses and houses on a first-come, first-served basis.

PIATN.COM

19

Consider the event While a large-scale catastrophe event is possible, your agency and your clients’ businesses are more likely to be affected by smaller events that cause fire, wind, water or smoke damage. Planning for both large and small events is vital. Each type of disaster will affect each business differently. What might be considered an annoyance to a large corporation could be ruinous to a small business. Consider the following events and the effects they might have on your business: water, fire, wind, smoke, mold, frozen pipes, flood, hurricane, tornado, winter storm, hazardous materials, explosion or vandalism. A restoration company can help you determine the actions you would need to take regarding all these different events.

Water is the single most, long-term, destructive substance in the indoor environment. All structural materials and personal property deteriorate rapidly in the presence of excess moisture. A few inches of water on the floor will soak into any porous materials immediately. And, depending on the humidity in the facility, the effects of water can rise to damaging levels within hours.

The problem worsens when cleanup and drying services are delayed. The window of opportunity to prevent mold development is within hours of water damage—not days or weeks. Having a restoration company respond to a disaster in a timely manner can mitigate your losses greatly.

Choose the right company You and your clients need to select an accredited organization that can handle all of your business’s needs. When you and your clients are looking for the right restoration company to partner with, choosing a company that can manage a job from start to finish eases the transition from panic to possible. Focus on three key elements: expertise, capacity and experience.

Look for a company that has expertise in the services that you would need in the event of a disaster. Do you keep vital records and documents in your facility? Then a company that has the technology in document restoration is essential. If you have asbestos or hazardous material on the property, you would need a company that is licensed to handle that type of substance. Electronics and machinery restoration might be a vital piece to your road to recovery.

Make sure you choose a company that is full-service and an expert in its field.

The restoration company must have the capacity to handle a large loss to your facility. Does it have offices that are located in reach of your facilities? Does it have enough equipment and personnel to handle all types of losses?

Whether your agency or your clients’ businesses are located in commercial high-rises or historical landmarks, find a company that fits your needs. Ask for references and years of experience to find out if it has the experience to handle your business’s unique needs.

Plan ahead Many businesses have some type of emergency preparedness plan. A partnership with a restoration company will allow you to share the plan already in place or collaborate on the process of creating a plan.

As with any plan, without practice and proper training, it will remain useless.

20

PROFESSIONAL INSURANCE AGENTS MAGAZINE

Create building and site maps that indicate all utility shutoffs, alarms, fire extinguishers, exits, stairways, restricted areas, hazardous materials and high-valued items. Do a walk through with all employees and show them system locations and how to shut them off. Teach them to read and manage the fire alarm systems in the building. The most imperative thing is to know how and when to turn off water, gas and electricity at the main switches or valves.

Sometimes shutting everything off may cost millions in production costs—depending on the business operations—but not shutting off the water, gas and electricity could be even more devastating in the end.

Also, include any external resources that could be needed in an emergency. In some cases, formal agreements may be necessary to define the facility’s relationship with the fire and police department, emergency medical services, utilities and insurance carriers. Just as all staff should have access to the emergency plan, so should your restoration company.

The response and action taken during the first 24 to 48 hours after a disaster are critical to determining whether your business fully recovers.

Effective preplanning and partnership with a single-source solution recovery company has never been as important as it is today. Whatever the cause, disasters now are an established risk to every business and must be prepared for in advance.

What is your plan to go from panic to possible?

Miller is the Oregon marketing director for BELFOR Property Restoration, a leader in disaster recovery services. For more information, visit www.belforusa.com or reach Miller at katie.miller@us.belfor.com.

Six tips for selling more in any market or economy Back in 2009, while we were in the throes of a difficult recession, I wrote a similar article, which I’ve updated to address the current environment, and how we still can be successful selling.

No. 1: Don’t let anything outside of you be your excuse. After a tough day or some difficult sales calls, it’s easy to blame a host of things other than yourself. If you do, people will hear it in your voice and you’ll sell less. This attitude also will demotivate you, which will lead to working less. In tough times, when salespeople should be increasing their calls and activity level, the average salesperson cuts calls and activity significantly. The answer? Use difficult times as a warning and motivation to work harder and smarter, not as an excuse to back off. Have a plan and know what you have to do every day, and make sure you do it. If you back off, business will go down, if you work harder and smarter, business will improve. As I’ve said before: In tough times, don’t give up, double up.

SALES

JOHN CHAPIN President, Complete Selling

the competition and yet, the prospect still buys from your competitor because they’re golf buddies. Relationships are vital—in most cases more than anything else—so you need to focus on not only staying in touch with and keeping your name in front of customers and prospects, and delivering value each time, but also on taking that next step and building solid, long-term relationships. Send handwritten thank-you notes, anniversary cards, birthday

No. 2: Get better at selling. When there are fewer sales opportunities and prospects, you must do better with the ones you have. The way to do this is to get better at selling. Become a student. Read books, listen to audios, watch videos, become a sponge, and absorb everything you can. Using this strategy has helped many salespeople improve to the point to which they actually sold more in a so-called down market than they sold when times were good. Now is the time to improve your skills; constantly and consistently getting better at selling is the best way to grow your sales.

No. 3: Keep a good attitude. Your attitude is your most important sales tool in your arsenal. Right now, it is almost impossible to watch the evening news and be positive. Our brains are like computers (i.e., garbage in, garbage out).

Put as many good ideas as possible into your brain. Pick up anything inspirational, motivational, positive and upbeat and use it to keep a good attitude and stay focused. Be positive and persistent. In addition to putting good ideas into your brain, eat good foods, get plenty of rest, exercise and surround yourself with positive people. Stay away from negatives and negative people.

No. 4: Prepare for the price objection and build value. While you should have a Script Book that includes great answers to all objections along with several strong value statements, this is particularly important when money might be a little tighter than usual.

No. 5: Focus on relationships. The relationship with the salesperson is the No. 1 reason people give for doing business with a particular company. We’ve all seen it happen, you make an overwhelming case for your product versus PIATN.COM

Design+ Print (800) 424-4244 design.print@pia.org pia.org/design&print

21

cards, and holiday cards. Your objective is to reach out to the customer more often on a more personal level at a time when your competitors are calling less and being less personal.

No. 6: You are responsible for your success. Five years from now the current pandemic will be long gone and you and your career will arrive somewhere. The question is: Where?

If you decide that something outside of you, such as the economy, is responsible for your success or failure, you give away control of your destiny and your ultimate success. The way to change that is to remember that your success is up to you, you own it, and you control it. Provided you have solid goals and strong enough reasons why you need to get there, you will arrive where you decide to arrive, regardless of viruses, markets, the economy, or anything else for that matter. Reminding yourself that you are 100% responsible for your success keeps your success under your control and within reach.

If you put the above tips to work, you will see an improvement in business, perhaps a significant one. Ask yourself the question: What am I capable of if I really set my mind to something and get to work? The answer is: pretty much anything. The sky really is the limit, so stay positive, work hard, work smart and dream big.

Chapin is a motivational sales speaker and trainer. For his free newsletter or to have him speak at your next event, log on to completeselling.com. He has more than 31 years of sales experience as a No. 1 sales representative and is the author of the 2010 sales book of the year: Sales Encyclopedia. Reach him at johnchapin@completeselling.com.

22

PROFESSIONAL INSURANCE AGENTS MAGAZINE

Which of your agency’s files has the mistake in it?

Ask a group of agents if they have any files that contain a mistake, and most—if not all—of the agents would admit that there probably is at least one file in which the coverage was not placed properly. They also may admit that there is one file in which there is virtually no documentation that the client refused a certain coverage.

Ask those same agents why they don’t fix the error, and they would readily admit they don’t know which file it is. Honestly, that is a fair response. Agents rarely know which file contains a problem that could lead to an errors-andomissions claim.

It seems that every day, we wake up to news that a catastrophe that has occurred somewhere in our country. It could involve a tornado, a wildfire, a flood, an earthquake or a hurricane. Hurricane season started June 1, with forecasters

E&O

CURTIS M. PEARSALL, CPCU, CPIA

predicting a busy 2020 season for the Atlantic Basin. Some hurricane experts are calling for 14-18 tropical storms during this season—with approximately eight storms forecasted to become hurricanes, and two to four of those predicted to strengthen into major hurricanes.

There appears to be a direct correlation between Mother Nature and E&O claims. It is evident that when a catastrophe occurs, E&O claims

Help Build Your Family’s Financial Future With

PIA Trust Insurance Plans INSURANCE PLANS DESIGNED WITH LOCAL AGENTS IN MIND As a PIA Member* serving Main Street America, you and your employees have access to a variety of highquality, competitively priced insurance plans.

Plans available include:  Basic Term Life**  Voluntary Term Life  Dependent Term Life  Hospital Indemnity  Long Term Disability  Short Term Disability  Business Overhead Expense  Accidental Death & Dismemberment

PIA SERVICES GROUP INSURANCE FUND

*PIA National membership, when required, must be current at all times. **Only available if 100% employer paid and if the employer and 100% of the employees enroll.

No medical underwriting necessary up to guaranteed issue limits.

For more information about PIA Trust Insurance Plans, please contact your local PIA Affiliate or call the Plan Administrator at 1-800-336-4759. Additional information is also available on-line at www.piatrust.com.

Policies or provisions may vary or be unavailable in some states. Policies have exclusions or limitations which may affect any benefits payable.

Underwritten by Unimerica Insurance Company, Portland, ME. Administered by Lockton Risk Services.

PIATN.COM

23

activity increases. Bottom line: Nothing brings out an agent’s mistake as quickly as a catastrophe.

Agency E&O Let us do all the work

Why is this the reality?

If one of your agency’s clients has a loss, what is the chance that there is a mistake in the placing of the insurance coverage for that client? While it is possible, it is not probable. However, if a catastrophe occurs and now your agency has 200 clients who have suffered a loss, what is the probability that at least one of those clients has a problem involving his or her insurance coverage?

It becomes much more likely.

Superstorm Sandy caused significant and widespread damage on the East Coast in 2012. The number of uninsured losses prompted many clients to bring an E&O claim against their agents alleging, in most cases, failure to provide flood coverage.

With several carriers to offer, we are your one stop shop

That storm reminded us that catastrophes could happen anywhere, at any time. However, it is difficult to predict what the next catastrophe will look like, and whom it will affect. For these reasons, it is vital for professional insurance agents to periodically (typically annually) remind clients of the various coverages they don’t have, and to determine any exposure changes their clients are facing that could be addressed through insurance. A renewal questionnaire serves as solid protection, should a client allege his or her agent did not provide the proper coverage.

At the time of a catastrophe, another key issue involves the manner in which an agent handles claims. Without a doubt, some of these clients will have been affected by the catastrophe severely. Agents must be diligent in their comments with clients—especially with those who don’t have the proper coverage. For example, during Sandy, as claims were being reported, there were numerous situations in which agents’ comments went something like this: “I’m sorry, but you don’t have any flood coverage. How did we not offer you flood coverage?”

Some courts viewed those words as an admission of liability and used them against the agency. The agency staff member obviously meant well, but there were negative consequences. Your preparation for the next catastrophe should include a discussion of what to say—and what not to say—when your clients start to file claims.

Contact: Tom Gernt (615)771-1177 Ext. 205 advantageservices@piatn.com

www.PIAtn.com

24

It also is common that when the agency is inundated with claim calls from clients, there may be some staff members who don’t handle claims normally who are now given that additional responsibility. Since claim handling is not something that they do regularly, it is important for these staff members—and all other staff members—to know the do’s and don’ts of claims handling. This list should be a living document within the agency. Since agencies technically don’t have the authority to approve or deny claims—this is a carrier role—this position should be communicated and any comments carefully scripted.

Obviously, it is impossible to know when the next catastrophe will occur, what it will look like, and which of your clients will be affected. A solid level of preparation can play a key role in ensuring that when a catastrophe does occur, you are less likely to find mistakes in your files.

PROFESSIONAL INSURANCE AGENTS MAGAZINE

(as of 8-26-20)

from the people stronger

who

customer satisfaction

know.

stronger

coverage

stronger

loss control

stronger

defense

TENNESSEE

Continuous E&O protection since 1966.

504 Autumn Springs Court Suite A-3 • Franklin, TN 37067 Phone: 615-771-1177 • Fax: 615-771-3456

DIRECTORY

Readers’ service and advertising index

10 11 9, 21 BC 23

ABA Insurance Servvices National Security Fire & Casualty Co. PIA Design & Print PIA Market Access PIA Trust

24 18 8 22, 26 2

Show your true colors

PIATN Agency E&O PIATN Education Calendar PIATN Online Education Utica National Insurance Group West Bend

Name____________________________________________________________________ Agency___________________________________________________________________ Address__________________________________________________________________ City/town________________________________ State____________ ZIP_____________ Phone____________________________________________________________________ Check advertisers of interest, complete form and mail to: PIATN magazine • 504 Autumn Springs Court, Suite A-3 • Franklin, TN • 37067

26

PROFESSIONAL INSURANCE AGENTS MAGAZINE

Enhance your ad with the impact of color.

Reach our sales representative at (800) 875-7428. .

PIA Market Access TAKE YOUR AGENCY TO NEW HEIGHTS AND GROW YOUR BOOK OF BUSINESS • Access to more than 50 national and specialty carriers • Real-time rating for personal and commercial lines • Ownership of your book of business & no exit fees • Higher PIA member commission rates • Low monthly access fees R

r o F New ! s t n e g A A PI

powered by

MARKET ACCESS

Have your own carrier appointments? Plug them into our rater!

We call it Best of Both Worlds

Sign up to begin your two months free!

To learn more, visit

PIAMarketAccess.com *Current PIA Membership Required. Available in the 50 U.S. states and DC. Carrier availablity varies by state.

Provided through partnership with InsureZone.com of Texas, Inc.