In the movies, it’s thrilling when the little guy finds a way to win big.
In the ISU Network…it happens every day. Okay, as a member of the ISU Insurance Agency Network, you aren’t exactly a little guy. You don’t have a downtown skyscraper, but you can compete with those that do.
You maintain complete independence, yet are part of an organization of 160 established and successful independent agencies with combined premiums over $2 billion.
You have access to over 350 carriers, meaning broader coverages for existing clients and multiple avenues for new business development.
You are part of a coast-to-coast community that shares proven ideas and provides solutions to difficult challenges.
And to make victory even sweeter, you receive performance incentive income that averaged $57,400 last year and is trending upward by about 25% annually.
INSURANCE AGENCY NETWORK 2
Helping Independent Agents Stay Independent for Over 35 Years
Let’s talk about ISU member victories, competing locally, regionally and nationally. www.JoinISU.com
In 2016, ISU will add new carriers and new qualified agents in the Carolinas. For an exploratory discussion of the ISU model... Call Jack O’Connell Regional Vice President (704) 771-9597
Provide more than protection for your clients. Offer them the added value of EMC’s no-fee loss control services, which could help reduce the cost of their insurance. It’s just one of the many reasons policyholders Count on EMC ®. BILL STULTZ Senior Risk Improvement Representative EMC Birmingham Branch
REDUCING LOSSES ADDS
VALUE FOR CLIENTS. BIRMINGHAM BRANCH OFFICE Phone: 800-239-2005 | Home Office: Des Moines, IA
www.emcins.com © Copyright Employers Mutual Casualty Company 2016. All rights reserved.
3
FIRSTSTEP
AIIA thanks the following sponsors for their support and participation in the First STEP program. AIIA’s First STEP program is your first step to involvement with independent agents in Alabama. For more sponsorship information or to sign up as a sponsor, please contact Nancy Crowe at 205-326-4129 or visit our website at www.aiia.org.
$20,000
The Sheffield Fund Alabama Insurance Management Services
$15,000 Your name here
$10,000
Cornerstone National Insurance
$7,500
AIIA EVENTS 2017 Birmingham IIA Annual Gala
January 27 United Cerebral Palsy of Greater Birmingham
Young Agents and AIIA Committee Days February 15-16 AIIA Office
AIIA Legislative Conference March 2 Embassy Suites, Montgomery
Excalibur Education Foundation Clay Shoot
National Security Fire & Casualty
April 21 Selwood Farms
$5,000
121st Annual Convention & Trade Show
Alabama Trucking Association WCSI Fund Centauri Insurance
$2,500 Alabama Self-Insured WC Fund AlaCOMP American Mining Insurance Co Auto-Owners Insurance BAMA Berkley Southeast Insurance Grp CRC Insurance Services Donegal Insurance Group EMC Insurance Companies Enterprise Rent-A-Car
Frankenmuth Insurance Genesee General Insurance House Penn National Insurance Progressive Sagamore Insurance Company Sentry Insurance Southern Insurance Underwriters/ SIUPREM Travelers Insurance Company TheZenith
We Thank You! 4
MAKE PLANS TO ATTEND!
Alabama Independent | 2016 Issue 4
June 7-9 Hilton Sandestin Beach Golf Resort & Spa
Young Agents Summer Conference July 27-29 Hilton Pensacola FL
Young Agents and AIIA Committee Day August 16-17 AIIA Office
Big I PAC Golf Tournament September 19 Prattville Country Club
Fall Education Conference & Trade Fair October 18 AIIA Office Hosted by Small & Rural Agents Committee
, x a Rel labama. A We’ve got you covered.
When unpredictable weather strikes, residents of Alabama need more than the usual kind of insurance products. Count on Centauri Insurance to be there when you need us, by having your interest in mind in everything we do. Homeowners I Dwelling Fire I Tenants I Flood
centauriinsurance.com 2016 Issue 4 | Alabama Independent
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alabama
2016 • Issue 4
INDEPENDENT
141 London Parkway Birmingham, AL 35211 Phone: 205-326-4129 | Fax: 205-326-3086 | www.aiia.org
CONTENTS
26
Executive Vice President: Bill Sager, CIC Editor: Michelle McKee
LEADERSHIP & STAFF AIIA OFFICERS President: Jeff Hogg, CPIA, CLCS Tuscaloosa
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39
4 First STEP Sponsors; AIIA Save The Date
8 Letter from the AIIA President, Jeff Hogg, CPIA CLCS
10 Letter from the AIIA EVP, Bill Sager, CIC
12 AIIA Supports “Don’t Goof When You Re-Roof” 14 PAC Golf Classic Success
18 2016 Fall Education Conference & Trade Fair Recap 20 Industry News
22 AIIA Education Calendar & Webinars
26 Young Agents Conference Takes Social Media to a Whole New World 31 Young Agents Chair Report
32 76 Alabama Insurance Agents Earn National Designations
36 Technical Difficulties: Workflow Problems That Cause E&O Claims
Secretary/Treasurer: Steve Sprayberry, CIC Sylacauga
District 7 Kevin Myrick - Tuscaloosa Lin Moore - Tuscaloosa
State National Director: Jeff Grice, CIC Jasper
Young Agents C.D. Denson, CIC - Homewood
Immediate Past President: Richard Pardue, CIC Birmingham
Past President Jere Peak - Selma
BOARD OF DIRECTORS District 1 Larry Crosby, CIC - Brewton Michael Sullivan, CIC - Foley C. Todd Thomas - Montrose District 2 Steve Mullis, CPIA - Montgomery W. Keith Nobles, CIC - Wetumpka Jean Ann Rittenour, CISR, CIC, CPIA, CPIW - Montgomery Ray Smith - Deatsville District 3 John H. Dark, CIC, AAI - Alexander City Brad Young, CPIA - Anniston
39 57th Annual Firefighter of the Year Luncheon
District 4 Steve Hoggle, CIC - Guntersville Wayne Walker - Hamilton
44 Clay Shoot Registration
District 5 Kelly Aday - Lexington Susanne Grimwood, CIC, CISR - Huntsville Connie Waldrip, CISR - Huntsville
42 Ted’s Tablet
45 30th Annual Legislative Conference Information & Registration 46 Seen & Heard; Welcome New Members
ADVERTISER INDEX AIA 47 Allstar 43 Amalgamated Ins Underwriters 21 AGC Alabama 13 Berkley Southeast 7 Berkshire Hathaway GUARD Ins. 19 Burns & Wilcox 9 Centauri Insurance 5 Donegal Insurance Group 11 EMC Insurance Companies 3 6
President Elect: Haig Wright, CIC Jasper
FCCI 30 Genesee General 29 ISU 2 Johnson & Johnson 24-25 MJ Kelley 41 SIUPREM 33 Southern Insurance Underwriters 48 Summit 33 The National Security Group 39 Towerstone, Inc. 23
Alabama Independent | 2016 Issue 4
Mary Hall - Birmingham William Jacka, Jr. - Birmingham Margaret Ann Pyburn, CPIA - Birmingham
District 6 Evelyn Burchfield, CIC, CRM, AAI, AIS Birmingham Russell Greenhalgh, CIC - Birmingham
AIIA STAFF Executive Vice President: Bill Sager, CIC Director of Education: Ted Kinney, CIC, CPCU, ARM, CPIA, AAI, AU, CRIS, AINS Director of Communications & Member Services: Michelle McKee Director of Education Administration: Tangerie Underwood, CISR, CPIA E & O Administrator: Carol Hunt, CPIA Accounting Supervisor: Irene Smyly Director of Meetings & Events: Nancy Crowe RLI Administrator: Tangerie Underwood, CISR, CPIA Printing & Mailroom Coordinator: Waymon McIntosh Office Manager: Sarah Walker
PUBLICATION INFORMATION The Alabama Independent is the official magazine of the Alabama Independent Insurance Agents, Inc. Association (AIIA), and is published quarterly by Blue Water Publishers, LLC. AIIA does not necessarily endorse any of the companies advertising in this publication or the views of its writers. AIIA reserves the right, in its sole discretion, to reject advertising that does not meet AIIA qualifications or which may detract from its business, professional or ethical standards. The publisher cannot assume responsibility for claims made by its advertisers, content provided by the editor, or the opinions expressed by contributing authors. For information on advertising, contact Jim Aitkins, Blue Water Publishers, 360-805-6474 or jima@bluewaterpublishers.com.
We get you back on the green When the unexpected happens in business Berkley Southeast Insurance Group is “Your Back-In-Business Insurance Company”™ Our Claim team is committed to providing superior service that gets commercial customers back in business, earning us a 97.6% customer satisfaction score through September of this year.
How We Do It We provide multiple options for quick inspection and repair of vehicles, including a network of auto body shops, so we can typically approve and pay within 14 days. With our unique preferred contractor repair program, that includes a 3 year workmanship warranty, we can often start building repairs within 48 hours. And our return to work program helps get injured workers the care they need, while last year saving 52% on overall medical costs for our commercial customers. BSIG is “Your Back-in-Business Insurance Company”™
Want to know more? Contact — Ben Nichols, Regional Vice President P 678-533-3460 | E bnichols@berkleysig.com
Berkley Southeast Insurance Group is a member company of W. R. Berkley Corporation, whose insurance company subsidiaries are rated A+ (Superior) by A.M.Best. Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued.
berkleysig.com ©2016 Berkley Southeast Insurance Group. All rights reserved.
2016 Issue 4 | Alabama Independent
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Jeff Hogg, CPIA, CLCS AIIA President First of all, I want to thank you for allowing me to represent the AIIA as your President. It is such an honor to follow in the footsteps of the great leaders of the past and one day look back knowing that I gave just as much to the association as it has given me. I would like to think that my footprint will be just as equal of helping the association and our member agencies grow as those before me. Our sole purpose as an association is to help bring value to our members. Through our Big I Markets, Continuing Education Classes, Convention, Young Agents, Committee Days, Legislative Conference, Pat Owens Big I PAC Golf Tournament, Trusted Choice, Fall Education Conference, Excalibur Clay Shoot, and the networking with our companies and brokers, are just a few of the values our association offers. Being a member in our association is just the first step to recognizing the added value that it brings. However, getting involved and becoming active will provide you with knowledge and lifelong relationships within our industry. This starts with our Young Agents. As I stated before, over the next year, I plan to work hard with our leaders of our Young Agents to make sure we have a perpetuation plan in place. Recently, we have formed the Perpetuation Ad-Hoc Committee. This committee is comprised of past leaders of Young Agents, future leaders of Young Agents, and past leaders of AIIA. The purpose of this committee is to determine a plan of action to help transition our Young Agents leaders into our AIIA future leaders. This will help preserve our association as we move forward and allow others to take as much pride in our association as our past leaders. In the end, we are all one association and there should never be a divide on age. As for our Young Agents, they had another great conference at the Hilton Pensacola Beach Resort this summer. From a live panel of representatives from various agency management systems, to oneon-one roundtables with companies and brokers, to ending the conference with a photo booth and the Molly Ringwalds band; it was a hit! I want to commend our Young Agents Chair, C.D. Denson and his committees on a job well done. 8
Alabama Independent | 2016 Issue 4
Typically during the closing banquet of the Young Agents Conference, the prestigious Young Agent of the Year award is given. However this year, that was not the case. The Young Agents decided that in order to keep the prestige of this award, someone has to earn it. Just being on a committee or chairing a committee is not enough. The award is for someone who goes above and beyond to help our association and their community. As a former recipient of this award, I applaud our Young Agents for taking this stand. It is easy to go through the motions, but to make a difference; you have to go the extra mile. I look forward to seeing all of our Young Agents this year working hard to earn this award. The Pat Owens Big I PAC Golf Tournament was held in September at the Prattville Country Club, and once again, the committee did an excellent job. The tournament was named for the 2013 Insuror of the Year recipient, for all his efforts. It is no surprise that the tournament was well attended and we appreciate everyone’s participation by playing, sponsoring, or as a volunteer to making this another successful event. The Fall Education Conference was held at the AIIA office on Wednesday, October 19th and was hosted by our Small & Rural Committee. Attendees were treated to breakfast and lunch with exhibitors and networking. AL Diamond discussed Perpetuation, Buy-Sell Agreements, Agency Valuation and participants earned eight CE credits. As we enter the last quarter of 2016, I want to urge you to give to InsurPAC. If you have already given, I want to personally thank you for your contribution. If everyone were to give a small amount, we would easily reach our goal. Our dollars do not go unnoticed in Washington. Once again, I want to thank you for the opportunity you have given me. It is a great honor and one that I do not take lightly. I also want to thank each of our sponsors. Without your partnership, we would not be able to bring the value to our members that we have come to expect. I look forward to working with each of you over the next year and achieving great things. From my family to yours, I hope you have a wonderful holiday season.
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Commercial | Professional | Personal | Brokerage Binding | Risk Management Services
2016 Issue 4 | Alabama Independent
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Bill Sager, CIC
AIIA Executive Vice President
Value…. “worth; that which renders anything useful or estimable.” What is something “worth?” We have all made the comments…. “I got a great deal” or “I’m not paying that much, it isn’t worth it.” There is no doubt we can all agree that people place value on things some of us couldn’t care less about. On the other hand, we have all probably had people look at us and wonder why we seem to place “value” on certain things. There are times we place “value” in tangibles, those things we can see and touch. Other times we place “value” on intangibles, those things we can’t hold in our hands or use like an appliance or tools, but we still value them. So the idea of placing value can certainly be subjective. Our goal at AIIA is to be a partner with you and add “value” to what you do by bringing you both tangible and intangible support. We know being all things to all members is an impossible task, but that doesn’t mean we do not strive to help and assist our members as they have needs and opportunities. Our membership ranges from a two person shop to members with over 100 employees, so the opportunities to assist and support are quite varied. While we support our members in several “regular” activities and programs, we also work with members who have specific issues or situations in hopes of helping them reach the desired outcome. Some of the “regular” activities by your association on an on-going basis are: providing a broad based education program and 10
Alabama Independent | 2016 Issue 4
not just continuing education hours……. legislative representation and advocacy….. meetings and events which allow for networking with other agents and company / broker representatives…..advocacy is promoting the independent agency distribution system in Alabama…..working with member agents on an as needed basis in response to a specific need or request…..work with the Department of Insurance and represent our members on regulatory issues…..provide special programs to members through relationships with endorsed providers…… provide a variety of markets for members E & O insurance…..provide insurance markets to members through our national organization the IIABA…..the many resources of the IIABA are available to you. While the list may not be all inclusive, I hope it reminds you of the variety of areas we try to cover and the options we provide to our membership. Our goal is for you to see your membership in AIIA as an item that is valuable to your organization. We always welcome your comments and suggestions relating to how we can improve on what we do and we look for opportunities to broaden the benefits we can provide. We believe the independent agency distribution system is the best system for getting coverage to the consumers. Together we strengthen each other and our system. We “value” and invite your support and feedback. May the up-coming holidays be safe and joyous for each of you!
most there when it matters most there when it matters m
Direction
Donegal remains committed to our chosen direction for distribution — the independent agency system. Unlike many others in the industry, Donegal has no interest in any other distribution channel. Instead, we focus our energy on consistently delivering greater value to our agents. Staying true to our chosen course of supporting the independent agency system… another way Donegal is “There When It Matters Most.”
To learn more visit www.donegalgroup.com or call Bill Anderson at 800-277-7442 ext. 3418.
2016 Issue 4 | Alabama Independent
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AIIA NEWS AIIA joins other sponsors in supporting “Don’t Goof When You Re-Roofg ”
PSA Campaign Launches Targeting Alabama and Mississippi Homeowners Mobile-based not for profit, Smart Home America and its partners announce the launch of “Don’t Goof When You Re-Roof®”, an education campaign to inform homeowners about the FORTIFIED HomeTM program and how it can protect their home, provide resilience and can save up to 35 percent on home insurance. “Alabama and Mississippi have legislated insurance discounts for homes built or retrofitted to the FORTIFIED standard.” Julie Shiyou-Woodard, president and CEO of Smart Home America explained. “Additionally, the benefits far outweigh any additional construction costs. Based on a new independent study, FORTIFIED homes are being valued nearly 7 percent higher than similar, nonFORTIFIED homes.” Public service announcements began running on local radio and television stations starting August 22. The campaign website (www.dontgoof.org) uses videos and easy to follow information to walk people through understanding their roof, FORTIFIED, why it matters and the savings available. The site also provides answers to frequently asked questions, steps to take, resources, tips and contacts homeowners will need when re-roofing, as well as, funding available to upgrade to FORTIFIED. The campaign was created due to the breakthroughs Alabama and Mississippi have pioneered to build stronger, more disaster resistant communities using FORTIFIED. Both states have legislated incentives for people to build stronger homes and many municipalities have added FORTIFIED recommendations into local building codes, making it even more affordable to earn a FORTIFIED designation.
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Alabama Independent | 2016 Issue 4
Don’t Goof When You Re-Roof is sponsored by companies who believe in building stronger and in FORTIFIED. “We’re excited to partner with State Farm, Malarkey Roofing Products, the Zip System by Huber Engineered Woods and BASF Disaster Durable Solutions to make Don’t Goof a reality.” said Shiyou-Woodard. “We could not have developed and marketed this program without their support.” About Smart Home America (SHA) Smart Home America is a grassroots education and outreach not-for-profit organization that seeks solutions to the challenges faced by our built environment. SHA partners with like-minded organizations and advocates for stronger building codes, building methods and policies to create more resilient communities. Learn more at www.smarthomeamerica.org About the Insurance Institute for Business & Home Safety (IBHS) and FORTIFIED HomeTM IBHS’ mission is to conduct objective, building science research to identify and promote the most effective ways to strengthen homes, businesses and communities against natural disasters and other causes of loss. FORTIFIED Home is a set of engineering and building standards designed to help strengthen new and existing homes through system-specific building upgrades that will reduce damage from natural hazards. Visit https://disastersafety.org/fortified to learn more about IBHS’ FORTIFIED Home programs.
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PAC Golf Classic Success! The Big I PAC held their annual Pat Owen Big I PAC Golf Classic on September 20th at the Prattville Country Club. The weather was nice and HOT! We appreciate all the support from our golfers, volunteers and sponsors.
WINNERS AM 1st Place A-Division: Jere Peak, Will Swift, Jim Alexander and Adam West 2nd Place A-Division: Paul Green, Kevin Mashburn, Troy Campbell and Bill Hamner 3rd Place A-Division: Chris Monroe, Chris Burdette, Rodger Hoffman and David Hudson 1st Place B-Division: Pat Owens, Jimmy Durbin, James Wilson and Terry Shavers 2nd Place B-Division: Jeremy West, Raymond Best, Brian Smith and Mikie Hornsby 3rd Place B-Division: Ricky Sims, Chase Sims, Butch Ivie and Evan Manning PM 1st Place A-Division: Marc Smith, Matt Ezell, Lide Denny and Doug Givens 2nd Place A-Division: George Sheridan, Cass Sheridan, Hershal Headley and John Boone 3rd Place A-Division: Chet Shonk, Patrick Albrecht, Harrison Hawke and David Rees 1st Place B-Division: Mark Kitchens, Harrison Campbell, Michael Gallops and Trey Henig 2nd Place B-Division: Billy Joe Webb, Jason Windham, Corey Windham and Seth Allgood 3rd Place B-Division: Jere Peak, Will Swift, Jim Alexander and Adam West Closest to the Hole: AM – Paul Green, PM – Brad Trotter Straightest Drive: AM – Will Swift, PM – Lide Denny Mulligan Drawing: Paul Reiner Golf Ball Drop Winners: Joe Bennett and Tim Calloway, $500 each
THANKS TO OUR TEE BOX SPONSORS The Sheffield Fund Enterprise Rent-A-Car RPS/Risk Placement Services EMC Insurance Companies Whitehaven Insurance Services Premium Assignment Corporation Stead & Fuller Tuscaloosa IIA The Argos Group Peck-Glasgow Agency Johnson & Johnson Imperial PFS Fountain, Parker, Harbarger & Associates Montgomery IIA
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Alabama Independent | 2016 Issue 4
Genesee General Berkley Southeast Insurance Group SIUPREM University Agency ServPro of Alabama Thompson Insurance Agency Southern Access Capital All American Insurance Agency Great American Insurance Company Haulers Insurance Company (HICI) South Shores Insurance Underwriters Summit Coastal Insurance Company
A SPECIAL THANKS TO YOUR TOURNAMENT STAFF Joanne Reed Gretchen Jackson Nancy Gothard Jennifer Hornsby Wyndall Hutcheson Norman Barfoot Brenda McNeill Neal Lankford John Petrusnek ServPro of Alabama Ken McFeeters Pat Owens C.D. Denson Joe Fuller Ray Smith Misty Glissman
THANKS TO OUR SPONSORS A special THANKS to those who sponsored a team, played individually or donated funds!
Reception: The Sheffield Fund
A special THANKS to those who donated by purchasing a GOLF BALL for the Helicopter Golf Ball Drop!
Winner Plaques: Cornerstone National Insurance Company
Hole In Ones: ServPro of Alabama Gulfstream Property & Casualty Insurance Alabama Insurance Management Services (AIMS) Jupiter MGA Straightest Drive: AM: Donegal Insurance Group PM: The Argos Group Closest to the Hole: AM: American Strategic Insurance (ASI) PM: Pardue & Associates Insurance, Inc. Practice Range: AGCAIIA – Alabama Gulf Coast Association of Independent Insurance Agents Mulligan Drawing: ServPro of Alabama Helicopter Golf Ball Drop: AccuAgency Bay City Underwriters ACCC Insurance National General Insurance CRC Insurance Services Beverage Carts: The Sheffield Fund and Sentry Insurance Breakfast: Birmingham Independent Insurance Agents (BIIA) Lunch: ServPro of Alabama and State Auto Insurance Company
Golf Cart Signs: National Security Fire & Casualty Goodies Bags: Edwin Watts Alabama Public Auto Insurance Agency The Sheffield Fund Sagamore Insurance Company Siuprem Enterprise Rent-A-Car Haulers Insurance Company (HICI) Progressive Insurance House Southern Access Capital Disaster Restoration (DKI) Universal Property & Casualty Hang Your Banner: Club House: WorkersFirst CompFund and Universal Property & Casualty Mulligan Table: ServPro of Alabama Door Prizes: Berkley Southeast Insurance Group Premium Assignment Corporation Haulers Insurance Company (HICI) All American Insurance American Strategic Insurance (ASI) Enterprise Rent-A-Car Southern Insurance Underwriters MetLife Auto & Home Disaster Restoration (DKI) Hole in One Golf Balls: The Sheffield Fund Penn National Insurance Travelers Insurance Hartford Infinity Insurance Company
2016 Issue 4 | Alabama Independent
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Alabama Independent | 2016 Issue 4
2016 Issue 4 | Alabama Independent
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2016 Fall Education Conference & Trade Show T he Small & Rural Agents Committee hosted the Fall Education Conference & Trade Fair on October 19th at the association office. The day included lots of food, door prizes and networking with 17 exhibitors. Attendees close to 100 participated in the education session that was given by Al Diamond with Agency Consulting Group, Inc., who is one of the leading experts in the industry that relates to Agency Valuation, Succession and Perpetuation. Mr. Wayne Walker of Walker Insurance Agency chaired the event and thanked his committee for all their hard work.
Company Grand Prize of $250 CASH went to Ashley Wright with NAI/Risk Placement Services.
Agents Grand Prize of $500 CASH went to Chase Sims of Your Insurance Center in Winfield. Small & Rural Agents Committee: Wayne Walker – Chair Steve Sprayberry – Liaison Tammy Bostick – Member Bob Frazer – Member Rickey Harris – Member Sam Newton – Member Chase Sims - Member
THANK YOU TO ALL OF OUR CONFERENCE SPONSORS Alabama Insurance Management Services/AIMS Alabama Self-Insured Work Comp Fund Alabama Trucking Association WCSI Fund AlaCOMP American Mining Insurance Company American Strategic Insurance/ASI Auto-Owners Insurance Company Berkley Southeast Insurance Group Centauri Insurance Cornerstone National Insurance Company CRC Insurance Services Donegal Insurance Group EMC Insurance Companies Enterprise Rent-A-Car Frankenmuth Insurance Genesee General Insurance House National Security Fire & Casualty Progressive Insurance Sagamore Insurance Company Sentry Insurance Southern Insurance Underwriters / Siuprem The Sheffield Fund Travelers Insurance Company TheZenith
THANK YOU TO ALL OUR OF ROUNDTABLE EXHIBITORS Alabama Insurance Management Services Alabama Public Auto Insurance Agency Associated Insurance Administrators Chubb Group of Insurance Companies Commercial Sector Insurance Brokers Foremost Insurance Group Genesee General Imperial PFS Insurance House Johnson & Johnson McClelland & Hine, Inc. National Security Fire & Casualty RPS/Risk Placement Services Royal Restoration Southern Access Capital Southern Insurance Underwriters / Siuprem Universal Property & Casualty 18
Alabama Independent | 2016 Issue 4
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2016 Issue 4 | Alabama Independent
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INDUSTRY NEWS Altasurance Formed From Red Rock
Red Rock Insurance Group is excited to announce the rebranding (renaming) of the Birmingham-based independent insurance agency to Altasurance Alabama, LLC; a new logo for the brand has also been unveiled. Why change? “I changed the name to symbolize our expectations to be the best in the industry and to our commitment to excellent customer service and dedication to our clients,” says CEO J. Henry Glover. Additionally, the Red Rock name is associated with several Birmingham-based companies and it is time to differentiate ourselves from the crowd. “It also aligns with our company goals to establish our brand and ideology on a larger, national footprint.” We utilize most innovative technologies available, allowing us to better understand our customers and to communicate our allegiance and duty, while making the customer experience an efficient and pleasant transaction. “We are looking to expand into other states through mergers, acquisitions and additional producers,” says Chief Marketing Officer Alison Ray. “Our next big investment will be in the right people who want to work hard, help others, have some fun and enjoy the rewards of our industry. We truly are the next generation of independent insurance agents.” Visit our website for additional information at www.altasurance.com
Kayla Abdou: Cornerstone National new Sales Manager Cornerstone National Insurance announces Kayla Abdou as the new Territory Sales Manager for Alabama. Kayla comes with a wealth of industry knowledge and experience, having spent several years as an insurance underwriter and some additional time working in an independent insurance agency. Kayla joins Cornerstone National Insurance to promote the Rate Recovery Plan designed to assist drivers who have fallen into a non-standard tier and restore them back to preferred status. Insureds that maintain both positive pay and driving activity over a three year period may receive a 6-8% discount upon each six-month renewal. Additional benefits include: competitive rates, roadside assistance on all policies, multiple pay options, and superior claims service. What’s more, Cornerstone offers high commission percentages and attainable contingency bonuses. Contact Kayla Abdou at Kabdou@ Cornerstonenational.com today to learn more about the value Cornerstone National Insurance and the Rate Recovery Plan can bring to your agency.
Best Practices Agencies The 2016 “Best Practices Agencies” have been selected and the list includes the following members: Byars | Wright, Inc. – Jasper Cobbs Allen – Birmingham Fountain, Parker, Harbarger & Associates – Huntsville S.S. Nesbitt – Birmingham Starke Agency, Inc. – Montgomery Thames Batre – Mobile Since 1993, IIABA and Reagan Consulting have partnered to produce the Best Practice Study, a comprehensive examination of the country’s top performing agencies. The study compiles benchmarking data on the key metrics of agency performance and value including revenue growth and profitability, financial stability, expense management, and sales and operations productivity. JOB WELL DONE!
One Mile, and One Step at a Time Walk
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Alabama Independent | 2016 Issue 4
AIIA State National Director, Jeff Grice, who serves on the Trusted Choice National board, made the trip up to Huntsville, Alabama for the Trusted Choice One Thousand People, One Mile, and One Step at a Time Walk on October 2nd. It was such gorgeous day, that Jeff and Huntsville Independent Agents Association president Michael Vance walked over an hourhalf on the Indian Creek Greenway. Trusted Choice water bottles were given out to people as they completed the walk.
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uc m.
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It's like eeeeeeeeeeeeeeeee, one taste and you'll be back for more! P
H e e :
• • •
(800) 613-2600 www.AIU-USA.com 2016 Issue 4 | Alabama Independent
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EducationCalendar JAN
10 12 17 19 24 26 31
CISR Insuring Commercial Casualty Exposures 1 – Birmingham CISR Insuring Commercial Casualty Exposures 1 – Florence CISR Insuring Commercial Casualty Exposures 1 – Mobile CISR Insuring Commercial Casualty Exposures 1 – Tuscaloosa E&O Risk Management – Dothan E&O Risk Management – Montgomery CISR Insuring Commercial Casualty Exposures 1 – Montgomery
FEB 1 2 8-10 14 21 22 23 27 28
MAR
CISR Insuring Personal Residential Exposures – Birmingham CISR Insuring Personal Residential Exposures – Mobile CIC Agency Management – Birmingham CISR Insuring Personal Residential Exposures – Montgomery CISR Insuring Personal Residential Exposures – Tuscaloosa E&O Risk Management – Mobile CISR Insuring Personal Residential Exposures – Huntsville CISR Agency Operations (part of CISR Marathon Week) – Birmingham CISR Insuring Commercial Casualty Exposures 1 (part of CISR Marathon Week) – Birmingham
1 2 3 8 14-17 20-24 28 30
CISR Insuring Commercial Property Exposures (part of CISR Marathon Week) – Birmingham CISR Insuring Commercial Casualty Exposures 2 (part of CISR Marathon Week) – Birmingham CISR William T. Hold Seminar (part of CISR Marathon Week) – Birmingham E&O Risk Management – Tuscaloosa CRM Analysis of Risk – Birmingham Property & Casualty Licensing School – Birmingham E&O Risk Management – Huntsville CISR Life & Health Essentials – Mobile
WEBINARS
December 2016
2
Cyber Liability
5
The Dirty Dozen (12 Great Commercial Insurance Mysteries)
6
Insurance Valuations Strategies
6
It’s Not My Fault, or Is it? – Liability Issues in Personal Lines Policies
7 Condominiums 8
E&O Risk Management: Meeting the Challenge of Change (Part One)
8
E&O Risk Management: Meeting the Challenge of Change (Part Two)
9
Farm Liability Coverages
12
Dispelling the Myths of Workers’ Compensation
13
Insuring Trusts (Protecting Your Client’s Wishes)
14
Ethical Dilemmas…Making the Right Choices
15
Fiduciary Liability, ERISA Bonding, and Employee Benefits Liability
(The Affordable Care Act contains significant responsibilities for benefit plan decision makers)
16
Personal Auto Hot Topics For complete schedules of ABEN and PTA Webinars, go to www.aiia.org!
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Alabama Independent | 2016 Issue 4
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COMMERCIAL CONSTRUCTION TARGET CLASSES (BUT NOT LIMITED TO):
• • • • • • • •
Street & road Demolition Roofing – commercial & residential Scaffolding/cranes Steel Erectors/fabricators EIFS Mechanical Energy construction
• • • •
Apartments Single family homes (tract & custom) Condominiums Townhomes
COVERAGE ENHANCEMENTS AVAILABLE:
• Alternative coverage triggers including: occurrence, manifestation and close of escrow • 10-year completed operations tail coverage • Offsite coverage for fabrication and other exposures • Options for typical exclusions such as cross suits; care-custody-control; and premises sold by insured • Older AI language • Manuscript construction form creation and revision as needed
ASK US ABOUT TOWERSTONE’S NEW ENVIRONMENTAL DIVISION FOR THE SOUTHEAST TOWERSTONE ALABAMA OFFICE P.O. BOX 130234 BIRMINGHAM, AL 35213 PHONE: 205.739.2331 WHOLESALE INSURANCE BROKERAGE
M.TAYLOR MCGUIRE ASSISTANT VICE PRESIDENT taylor.mcguire@towerstonecorp.com
MARY GLENN CHRISTOPHER MANAGING AE, ENVIRONMENTAL mary.christopher@towerstonecorp.com TOWERSTONE, INC. | towerstonecorp.com 2016 Issue 4 | Alabama Independent
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YOUNG AGENTS CONFERENCE TAKES SOCIAL MEDIA TO A WHOLE NEW WORLD!
Over the last two years, the Young Agents Conference has focused on social media and new technology. This year was no different. Using Agency Nation as a forefront, our Young Agents invited independent agents from across the nation to participate in our Agency Management Software FACE-OFF. Agents were able to join us “LIVE” through the Agency Nation Facebook page as nine AMS systems spoke briefly about their company and why you should consider using them in your agency. Afterwards, attendees and agents from our live stream were able to ask questions of the AMS representatives that would best assist agents in finding the right system for their agency. For those who haven’t heard, Ryan reported over 2,500 viewers from multiple states on the live stream by the end of the panel cast. We actually had so much feedback from our live stream that the panelists were asked to answer questions by commenting on the Facebook page after the program so our attendees could enjoy the rest of the conference.
Associated Insurance Administrators and Irvin B. Green & Associates sponsored the golf tournament for those agents and company reps who wanted to participate. Congratulations to Jameson Carden and Trey Stone of FCCI, Chris Hoggle of Woodall-Hoggle in Guntersville and Joseph Armstrong of Southern Premiere Agency in Abbeville for coming in first place. Caro Manning of Johnson & Johnson had the Longest Drive on Hole #5. The Closest to the Pin on Hole #2 went to Patrick Albrecht of AiA and Richard Jeffers of RPS won Closest to the Pin on Hole #17. Big thanks to Patrick Albrecht, Chet Shonk and Brian Tolomeo for putting the tournament together. Thursday’s Welcome Reception was a nice evening to mingle and get reconnected with old friends before a jam packed next two days. Rene Hernandez welcomed our guests on Friday morning with a very powerful and inspirational message. Being a young agent in Oklahoma, Rene was honored to be a part of our conference and made the DRIVE from Oklahoma to Pensacola with his family. Family means a lot to Rene and he wouldn’t be the man he is today without his family or his insurance family. He spoke of his past and the hard work it took for him to succeed as an independent agent. He encouraged everyone to find their niche as he did with restaurants and minorities. 26
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Next we were fortunate to have Whitnee Dillard and Ron Berg from our National Association, Independent Insurance Agents and Brokers of America. Whitnee is a Co-leader for the Big “I” Diversity Task Force. The Mission of the Task Force is to engage and develop a sustainable diverse independent agency network by partnering with state associations, carriers and industry affinity groups. Whitnee informed the crowd of the program and updated them on the progress. Ron is the Executive Director for IIABA Agents Council for Technology (ACT). ACT works to advance use of most effective business processes, practices and technologies in order to enhance productivity, service, marketing, sales and security for agencies, carriers, software vendors and insurance industry groups. Ron touched on how the program can be beneficial for you and how to be more involved. For more information on either program, visit www.iiaba.net. Ryan Hanley was back at the young agent’s conference and spoke to everyone about TrustedChoice.com and Agency Nation. He is very passionate about these two very helpful organizations and both have been a huge success. By joining the state association, you become a member of trustedchoice.com. Trustedchoice.com is a referral website for consumers to find independent insurance agencies in their area. AIIA is working closely with trustedchoice.com on a Search Engine Optimization Grant that will help move our participating members to a better position when consumers do a google search. Agency Nation is a website that has useful information through articles, blogs or pod cast. Like them on Facebook or visit www.agencynation.com for more information. Our 38 Roundtable exhibitors were once again beneficial to all of our young agents with that one-on-one time to get to know our company representatives and how they can get appointments. We must thank our hospitality sponsors for providing the refreshments on the beach while attendees participated in the annual cornhole tournament. Austen George and Joshua Niesman of All Risks, came up a little short in a fantastic finals match between Casey Bentley of Rux Carter Insurance and Todd Roberts of Talladega Insurance Agency.
Saturday morning, our guest speaker Steve Morgan put on a Behavior Magic Show with the Young Agents. In his unique style, he involved those in attendance as he taught the personality traits of groups of people. He reminded the agents of the importance of getting to know their clients/prospects and how understanding the various personality traits can lead to great business relationships. Steve’s presentation was a popular point of discussion the remainder of the conference. During the closing banquet, Kevin Myrick of The Insurance Center of Tuscaloosa announced this year’s receipts for the Capps-Calhoun Excalibur Education Foundation Scholarships to Ms. Hannah Harris and Ms. Meredith Durden of Troy University.
Young Agent Chair CD Denson presented Nicole Hester with the Young Agents Associate Member of the Year award. Nicole believes in the Young Agents and the future of the conference. Her company Berkshire Hathaway Homestate sponsored a photo booth for all attendees this year and it was a great hit! Lastly, it was time for the Young Agents to shine for a conference well done. The Young Agents danced the night away with the Molly Ringwald Band. The high energy band was a fitting end to a fun, informative and challenging conference.
THANK YOU TO ALL OF OUR CONFERENCE SPONSORS Alabama Insurance Management Services/AIMS Alabama Public Auto Insurance Agency Alabama Retail Comp Alabama Self-Insured Work Comp Fund Alabama Trucking Association WCSI Fund AlaCOMP American Mining Insurance Company American Strategic Insurance/ASI Associated Insurance Administrators/AiA Assurant Specialty Property Auto-Owners Insurance Company Berkley Southeast Insurance Group Berkshire Hathaway Homestate Companies Centauri Insurance Commercial Sector Insurance Brokers Cornerstone National Insurance Company CRC Insurance Services Donegal Insurance Group EMC Insurance Companies Enterprise Rent-A-Car FCCI Insurance Group Foremost Insurance Frankenmuth Insurance Genesee General Imperial PFS Insurance House Irvin B. Green and Associates MetLife Auto & Home National Security Fire & Casualty Nationwide Progressive Insurance Safeco Insurance Sagamore Insurance Company Sentry Insurance Southern Insurance Underwriters / Siuprem The Sheffield Fund Travelers Insurance Company WorkersFirst CompFund Young Agents Committee TheZenith *Bold indicates FIRST STEP Sponsor
GREAT JOB YOUNG AGENTS! THANK YOU TO ALL OUR OF ROUNDTABLE EXHIBITORS AFCO/Prime Rate Premium Finance AL Home Builders Self Insurers Fund Alabama Public Auto Ins. Agency Alabama Self-Insured WCF AlaCOMP AmWINS Access Insurance Services Applied Systems Argos Group Associated Insurance Administrators Auto-Owners Insurance Company Burns & Wilcox Commercial Sector Insurance Brokers Consumers Insurance USA, Inc. Cornerstone National Insurance EZLynx Foremost Insurance Group Genesee General Irvin B. Green & Associates Gulfstream Property & Casualty HawkSoft, Inc. Imperial PFS ITC Johnson & Johnson National Security Group Nexsure Orchid Insurance Progressive/ASI QQ Solutions RPS/Risk Placement Services Safeco Insurance SIS/Strategic Insurance Software Souders Underwriting Group Southern Insurance Underwriters / Siuprem TechCanary Towerstone, Inc. Universal Property & Casualty Vertafore TheZenith
*Bold indicates an Agency Management Software Cos.
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Contact Tangerie Underwood tunderwood@aiia.org 205-326-4129
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800-226-3224 www.fcci-group.com
“At FCCI, we are here for our agents and our insureds for the long term, and we live by our values: loyalty, integrity, vision, excellence and service. I’m proud to work for a company that believes in ‘doing what we say we’ll do’ and I strive to do that for my agents and their clients.” Babs Fowler Underwriting Specialist FCCI Insurance Group Gulf Coast Region Ridgeland, Miss. Now, let’s talk about your business. General liability • Auto • Property • Crime • Workers’ compensation Umbrella • Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2016 FCCI
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3/2/16 3:25 PM
CHAIR REPORT C.D. Denson, CIC I am so proud of our Young Agents Committee for what we accomplished this past year. We won the $5,000 Video Contest of What an Agency Will Look Like in the Year 2025 and beat other states from across the country who submitted videos. In March, we put on another great Legislative Conference in Montgomery and followed that up in April with a fantastic Excalibur Clay Shoot where we raised a net amount of close to $13,000. To cap it all off, we put on a Young Agents Conference in Pensacola where the current Big “I” National Chair Randy Lanoix from Louisiana said we hit a homerun in all aspects of
the program. Some might say after that kind of year, it may be impossible to beat what we accomplished…but we can!!! We have a lot of new talent taking in our leadership roles as Committee Chairs and I am so excited with what they are bringing to our group. They are coming up with new ideas on how we can improve and get more people involved. There are still so many Young, Independent Agents out there that would benefit greatly from being involved with our Association and I feel it is our responsibility to find those agents and reach out to them. As we set out to plan our next year for Young Agents, I encourage everyone reading this to make an effort to bring in one new Young Agent that you think would benefit from being associated with Young Agents of Alabama. The Young Agent team is a special group and what we are doing is being heard on a National Level.
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76 Alabama Insurance Agents Earn National Designations The newly conferred designees each spent different variations of time to achieve this lifelong pledge to professional continued education and we honored them at the 35th Annual Conferment Ceremony on August 16th at The Club in Birmingham. The Certified Insurance Counselor (CIC) conferees took five 20-hour institutes consisting of intensive instruction followed by rigorous essay examinations. These designees have earned the right to attend the James K. Ruble Graduate Seminars for continued education. Ms. Molly K. Anderson, CIC, CISR McGriff, Seibels & Williams, Inc.
Mr. Brent D. Gillis, CIC Auction Insurance Agency
Ms. Margaret Brooks Moor, CIC McGriff, Seibels & Williams, Inc.
Mr. Charles W. Brown, CIC SanBuck, Inc.
Mr. Adam Russell Greenhalgh, CIC, CPIA Greenhalgh Insurance Agency
Mr. Jim Murphree, CIC Jim Murphree Insurance Agency, Inc.
Mr. Duncan Liles Carter, CIC CRC Insurance Services
Mr. Christopher Hoggle, CIC, CPCU, ARM Woodall & Hoggle Insurance
Mr. Joseph Taylor Norton, CIC South Shore Insurance Agency
Ms. Erica Nicole Davis, CIC, CISR Thompson Insurance
Ms. Janet S. Jones, CIC Starke Life Agency, Inc.
Mr. David M. Pace, CIC Hull & Associates
Ms. Stephanie M. Dean, CIC J.H. Berry Risk Services
Ms. Cheryl A. Kersnowski, CIC, CRM McGriff, Seibels & Williams, Inc.
Ms. Patricia Ann Parker, CIC, CISR Fitts Agency
Ms. Courtney Diamond, CIC, CISR McGriff, Seibels & Williams, Inc.
Ms. Melissa S. Lamar, CIC, CISR Alabama Retail Comp
Ms. Kelli Hopson Till, CIC, CISR, CRIS Turner Insurance & Bonding Company
Ms. Kathy M. Dick, CIC, CRM S.S. Nesbitt & Co.
Ms. Lauren H. Ledbetter, CIC, CISR Cobbs Allen
Ms. Bridget M. Watson, CIC, CISR McGriff, Seibels & Williams, Inc.
Ms. Tiffany Cunningham Dyl, CIC McGriff, Seibels & Williams, Inc.
Ms. Julie Livingston, CIC BancorpSouth Insurance Services
Mr. Benjamin P. Wooldridge, CIC, CISR S.S. Nesbitt & Company
Mr. Thomas Yeates Meriwether, CIC Hull & Associates
The Certified Risk Managers (CRM) designation required five 20-hour courses consisting of intensive instruction followed by rigorous essay examination. Ms. Cheryl A. Kersnowski, CIC, CRM Ms. Janelle Covey Coggins, CIC, CRM McGriff, Seibels & Williams, Inc. Willis of Alabama Mr. Bryan M. Johnstone, MBA, CIC, CRM Pepper, Johnstone & Company
Mr. Robert Webb Reagan Jr., CIC, CRM McGriff, Seibels & Williams, Inc.
Ms. Kaylee Brooke Stewart, CIC, CRM McGriff, Seibels & Williams, Inc.
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[continued on page 34]
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The Certified Insurance Service Representative (CISR) conferees attended five 1-day courses consisting of intensive instruction followed by examinations. The CISR Elite required nine completed courses and nine passed examinations. NEW CISR ELITE CONFEREES Ms. Jeneshia Abrams, CISR Elite Grandbridge Real Estate Capital, LLC Ms. Stephanie K. Portera, CISR Elite McGriff, Seibels & Williams, Inc. Ms. Rhonda Richardson, CISR Elite, CPIW Thames, Batre’ Ltd. Ms. Leigh A. Woods, CISR Elite Byars-Wright, Inc. NEW CISR CONFEREES Ms. Jeneshia Abrams, CISR Elite Grandbridge Real Estate Capital, LLC Ms. Ashley N. Anderson, CISR Environmental Underwriting Solutions Ms. Catherine Appling, CISR Pritchett-Moore, Inc. Ms. Robin J. Bailey, CISR Hull & Associates Ms. Cassie D. Berryhill, CISR Pritchett-Moore, Inc. Ms. Amelia D. Bobo, CISR Willis of Alabama Ms. Jessica K. Cheek, CISR McGriff, Seibels & Williams, Inc. Ms. Kristen B. Collum, CISR Cobbs Allen Ms. Tina B. Corder, CISR CRC Insurance Services, Inc. Ms. Susan K. Cox, CISR Alabama Municipal Ins. Corp. Ms. Rachel Anne Creel, CISR McGriff, Seibels & Williams
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Ms. Toni A. Dooley, CISR The Insurance Center
Ms. Brenda J. Pender, CISR CNA Insurance Company
Ms. Janet H. Giangrosso, CISR Byars-Wright, Inc.
Ms. Susie Chafin Poindexter, CISR Pritchett-Moore, Inc.
Ms. Sandra Denise Gowens, CISR Harris McKay Insurance Agency
Ms. Charissa D. Porter, CISR Robin & Morton
Ms. Myra D. Grant, CISR Judy Carter & Associates
Ms. Elizabeth J. Rehorn, CISR J. Smith Lanier & Co.
Ms. Tracy O’Neal Hathaway, CISR Hutchinson Traylor Insurance
Mr. Christopher Reynolds, CISR Dormon & Reynolds Insurance, Inc.
Ms. Shaina Hays, CISR Fountain, Parker, Harbarger & Assoc.
Ms. Rhona J. Rivero, CISR J. R. Prewitt & Associates
Ms. Laura P. Hornbrook , CISR Colonial Insurance Agency
Ms. Randi Rae Skelton, CISR Thames, Batre’, Ltd.
Ms. Melinda Howard, CISR Grandbridge Real Estate Capital, LLC
Ms. Debra Smith, CISR Harmon Dennis Bradshaw, Inc.
Mr. Charles Reagan Jager, CISR McGriff, Seibels & Williams, Inc.
Ms. Metta Virginia Spaeth, CISR McGriff, Seibels & Williams, Inc.
Mr. Lynwood DeKalb James III, CISR Palomar Insurance
Ms. Chandler Elizabeth Stapleton, CISR Thames, Batre’ Ltd.
Ms. Courtney Johnson Jarman, CISR The Insurance Center
Ms. Stacy Renee Stover, CISR Byars-Wright, Inc.
Ms. Nicole S. Karamichael, CISR HRA Risk Services, LLC
Ms. Jessica Brooke Summerlin, CISR Palomar Insurance
Ms. Margaret Anne Kirkland, CISR Colonial Insurance Agency
Ms. Erin Kolaczek Swenson, CISR McGriff, Seibels & Williams, Inc.
Ms. Clare Kulas, CISR Bremer Insurance
Ms. Kimberly C. Turman, CISR Colonial Insurance Agency
Ms. Santessa T. Lowery, CISR Alabama Retail Comp
Ms. Cynthia H. White, CISR Fountain, Parker, Harbarger & Associates, LLC
Ms. Jacki Anne Muhle, CISR All Southern Insurance, Inc.
Ms. Mindy Anna Winton, CISR McGriff, Seibels & Williams, Inc.
Ms. Valerie S. Nelson, CISR Fitts Agency, Inc.
Andy Byars came to support his CISR Designees, Ms. Leigh Woods, Ms. Stacy Stover and Ms. Janet Giangrosso.
Special Charter Members, Charles Ford, Jeff Grice, and Frederick Lanier from the 1st CIC Class - 35 Years Commitment.
Mr. Bruce McCreadie with Ms. Cheryl Kersnowski, of McGriff, Seibels & Williams, who earned CRM and CIC designations.
2016 OCSR of the Year winner, Ms. Edna Newcomer, and Ms. Nicole Davis, of Thompson Insurance, enjoyed the view of downtown Birmingham from The Club. 2016 Issue 4 | Alabama Independent
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: S E I T L U C I F F I D L A C I N TECH Workflow Problems That Cause E&O Claims
By Caryn Mahoney Big “I” Professional Liability and Swiss Re Corporation Solutions Using technology? That’s a given in today’s world. The advent of technology in the daily operations of insurance agencies has, in most cases, simplified tasks and created a more efficient workflow. However, sometimes the use of technology gets agencies in trouble and can give rise to E&O situations. More and more, applications are received by insurance carriers not via the mail, but rather, through the carrier’s captive, webbased direct entry program. When using such systems, the agency needs to be familiar with how each carrier’s program works. For example, in the case of applications, is there a default setting that completes certain items when the agency is entering an application for a client? If so, the agent needs to ensure that the default response is the correct response. If the program pulls information from a prior application, has that information changed? Sometimes the carrier’s system will automatically decline an application in response to particular answers. If so, the agency needs to make sure its employees are trained not to simply change those ‘objectionable’ answers just so the application goes through. More than $2 million was paid on one claim where the initial application was rejected, so the agent simply changed the answer so the application would be accepted. Does the carrier’s system confirm when an application has been fully submitted? Did the agent print out the application and make a notation of the confirmation? We see claims where the agent entered client information into the system, but apparently never completed the process. A related error: the broker is certain that the application was submitted, but there was no follow up to be sure that it was received. If the carrier’s system does not provide automatic confirmation of receipt, the agency needs to put into place a manual follow up system. If not, the agency could be faced with a situation where there is a client loss, but no policy in place to cover that claim. A substantial number of claims result from just a few days of delay, so timing is important. 36
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If the agency is entering information into a carrier’s system using answers from a handwritten, signed application, there should be a review to be sure that the electronic version matches. If there is no separate handwritten application, is the submitted application printed out and signed by the customer? If not, the client can – and often does – deny that the information typed into the system by the agency tracks what it was told by the client. One advancement in this environment is the use of electronic signature software that is password protected. With these programs, the agency will receive information regarding the date, time, email address and IP address of the recipient once the application documents are emailed to the client. They will also record the date, time, email address and IP address of the sender once the client electronically signs the application and any attached forms such as UM rejection. In the face of this evidence, it is very difficult for the client to claim that he did not sign or receive the documents. Completing and issuing certificates of insurance is surely easier with technology, but care needs to be taken to ensure that the information on the certificates matches the current status of the policy information requested. We have seen multiple claims where certificates have been issued showing coverage was in place after a cancellation had already taken effect. In some instances certificates are automatically issued with default language indicating that a party is an “additional insured” only to find – after a loss -- that there has been no request for an additional insured. In others, there is a limiting condition, e.g., a contract needs to be in place in order for a party to be an additional insured. Hopefully, agency management systems that include agency notes and attachments provide an easier way to fully document what the agent is doing. More and better documentation will usually assist the agency in defending an E&O claim. However, agency notes can get the agency in trouble if the agent places
comments in the file that are not factual or that provide opinions on coverage. Last, but not least, when using technology agencies need to be sure they are protecting the privacy of their clients’ personal information. Every agency should know what constitutes ‘personal information’ and should employ systems that protect such information from exposure to third parties, e.g., using encryption, password protection and a confidentiality warning on emails. The agency that does not keep its client’s information private could be subject to fines, remediation costs, civil actions and damage to its reputation.
tools, technology is susceptible to human error. Insurance professionals and their staffs still need to think about how and when they are using technology in order to anticipate and avoid possible E&O situations. Caryn Mahoney is an assistant vice president, claims specialist with Swiss Re Corporate Solutions and works out of the Chicago office. Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas, a member of Swiss Re Corporate Solutions.
Technology can be a valuable tool, enabling agencies to perform their work faster and more efficiently. But like most
LOOK, A USEFUL CHART! Based on nationwide claim data from 2010-2015, more than 15% of losses paid are due to application errors committed by agencies.
18% 16% 15.74%
Total Loss Amount
14%
14.60% 12.07%
12% 10%
8.77% 8.50%
8%
7.85% 6.44%
6%
5.04%
4%
4.36%
3.22% 3.22%
2% 0%
2.59% 2.29%
1.54% 1.52% 1.15%
r r le ror ror ror ror ror ror ror ror rro ror ror ror ror he Er Er Er Er Er Er Er lab Er Er Er Er Er Ot lE i n r t n e e a a e d e e ) n s m o e t n r c c v o g e o ti v d o iu ew su da ati an tA an lat ati me ca da co ran Qu Bin en su de rem ret ell pli ce No Ch Re su en mit of Expo R s o c p p a P I n l r y s I n m y C / A p e t m /li lic im lic of Ca licy Int en Re co pe Po Po Cla Po cy ate icy cy i l i Re (ty essm l c l i o o f P P Po rti ss Ce kA s i R n tio
ror
Er
Process Step Involved NATIONAL: Application Error: 16% Recommend Error: 15% Risk Assessment Error: 12% Policy Renewal Error: 9%
Source: Advance Claims- Swiss Re Corporate Solutions Claims Data source
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57th Annual Firefighter of the Year Luncheon We thank all firefighters for their bravery!
Birmingham Area Insurance Professionals and Birmingham Independent Insurance Agents hosted the 57th Annual Firefighter of the Year Luncheon on Friday, October 14, 2016 at the Association office. Mayor William Bell read the proclamation of Fire Prevention Week and gave the proclamation to Birmingham Fire Chief Charles Gordon.
Our guest speaker was Alan Rice, the Executive Director of the Alabama Fire College. He spoke on the five C’s that make up our firefighter community; Capability, Commitment, Caring, Crusaders and Cooperation. Firefighter Michael Z. Darby, Andrew K. Mosley and Steven P. Simoneaux were honored with the prestigious Firefighter of the Year award. They each received a plaque and their names have been inscribed alongside their fellow firefighters on a trophy that stands tall in Station 1 throughout the year. BIIA also presented the firefighters with a monetary gift of $250 each.
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Elba, Alabama
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Q:
Ted’s Tablet
QUESTION: Our insured, Company A, fabricated oil reservoir tanks for Company B. The tanks hold oil for hydraulic systems mounted on Company B’s trucks. Company B installed the tanks on their trucks.
the hydraulic systems arising out of the products. If there is actual physical damage to the hydraulic systems, that damage would be covered as “property damage” arising out of the insured’s products.
Over the last 6 months, the hydraulic systems have become inoperable due to tiny weld beads traced to Company A, which required replacement of all the completed products that were sold. The problem was caused by welding at too high a temperature.
If there is no physical damage to the hydraulic systems, but the hydraulic systems aren’t useful because they contain your insured’s product, then the hydraulic systems are “impaired property”.
The claim was submitted to our insured’s insurance company, who sent back a letter stating: “The manufacture of the tanks in question would be considered “your work” and any damage to the hydraulic systems themselves would be considered “property damage” and would not be covered under your policy”.
“Impaired property” means tangible property, other than “your product” or “your work”, that cannot be used or is less useful because it incorporates “your product” or “your work” that is known or thought to be defective, deficient, inadequate or dangerous, if such property can be restored to use by the repair, replacement, adjustment or removal of “your product” or “your work”.
After further discussion by phone, the adjuster is claiming that once the tanks are attached to the hydraulic system, they are no longer considered our insured’s product.
There is no coverage for “property damage” to “impaired property”. This exclusion would preclude coverage for any loss of use the hydraulic systems.
Company A is covered by a CG 00 01 12 04 Commercial General Liability coverage form.
There is also no coverage for the cost of recalling the hydraulic systems that have already been sold.
Is this a correct interpretation? completely false.
Your insured could be responsible for:
A:
We believe it is
ANSWER: If I understand the situation, the tanks are your insured’s product, which are installed in the hydraulic systems. The fact that the tanks are installed on the trucks does not make them your insured’s “work”. Your insured did not install the tanks. “Your product” means any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by you (your named insured). There is no coverage for damage to your insured’s products, but there is coverage for “property damage” to
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1. The cost of providing new products. 2. The cost of removing the old products to be replaced by the new product. 3. The loss of use (income) of the hydraulic units that cannot be sold until they are repaired. 4.
The cost of recalling and repairing the hydraulic units that have already been sold.
None of these losses would be covered by your insured’s CGL.
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SEEN&HEARD
Welcome New Members AIIA would like to welcome the following new members who have recently joined the association. Thank you for joining Alabama Big I!
NEW AGENCY MEMBERS Richard Jeffers of Risk Placement Services in Mobile participated in the U.S. Senior Amateur Championship Sectional Qualifying at The Country Club of Mobile on Wednesday, August 31st. The top two qualifiers earned their way into the USGA Senior Amateur tournament that was held in St. Louis at the Old Warson Club on September 17-22. Jeffers made the 36-hole cut after two days of medal play with a score of 148 and then went into match play. He won the first match which allowed him into the round of 32, but lost the second match and was eliminated. By getting into match play, he earns an exemption into next summers’ British Senior Amateur. If you need an ace in a scramble‌ Richard is your man. Congratulations!
SYMPATHY
Our thoughts are with Veleria Story of McGriff, Seibels & Willams and her family on the loss of her husband Dwight. He passed away on September 4th, 2016.
Grier Insurance Brad Grier Florence, AL
Premier Insurance Agency Gerald Trevarthen Cullman, AL Roberts Insurance, LLC Paul Roberts Mobile, AL Allsurance, LLC Trent Whitehead Theodore, AL American Small Business & Family Business Insurance Daniel Webster, Jr. Dothan Universal Agency, Inc. Humberto Aguilar Birmingham, AL
Our thoughts are with Charlie Carper of Thompson Insurance and his family on the loss of his daughter Mallory on September 8th, 2016. Mallory worked in the Birmingham office for Thompson Insurance.
from your AIIA staff
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If you have news, we would love to include it in our next issue! Please send your press releases, photos or notices to Michelle McKee at mmckee@aiia.org
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INTRODUCING SIU’S
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PERSONAL PROPERTY S o u t h e r n I n s u r a n c e Un d e r w r i t e r s , I n c
(If the property becomes occupied or sold during the policy term, the insured receives a return premium for the remaining months – 1/3, 1/3, 1/3)
+ 1-4 Family Dwellings + Premises Liability available + DP1 & DP3 forms available + Protection Classes 1-10 + 6 month option available
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