South Carolina Agent & Broker, Fall 2015

FALL 2015

Agent & Broker

Kimberly Lisenby, AAI 2015 SC Outstanding CSR of the Year EPI & Certificates of Insurance Best Practices ACT: How Do You Protect Your Agency’s Data?

Young Agents Conference & SC Big “I” Junior Golf Photo Recaps

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Fall 2015 • South Carolina Agent & Broker

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FALL 2015

Independent Insurance Agents & Brokers of South Carolina 800 Gracern Road, Columbia, SC 29210 803-731-9460 803-772-6425 (fax) e-mail: information@iiabsc.com

IIABSC Staff

G. Frank Sheppard, AAI, CAE President ext. 1239 or 803.760.1239 fsheppard@iiabsc.com Rebecca H. McCormack, CPCU, CIC, AAI Vice President ext. 1238 or 803.760.1238 bmccormack@iiabsc.com Beth Chastie Vice President of Administration & Finance ext. 9462 or 803.731.9462 bchastie@iiabsc.com Laura D. Cornell, CIC Director of Insurance Programs ext. 1227 or 803.760.1227 lcornell@iiabsc.com Megan Huebner Director of Events & Membership ext. 9463 or 803.731.9463 mhuebner@iiabsc.com Anita J. Trevino Director of Communications ext. 1237 or 803.760.1237 atrevino@iiabsc.com Megan Thomas Education Coordinator ext. 1219 or 803.760.1219 mthomas@iiabsc.com Olga Nichols Customer Service Representative ext. 1225 or 803.760.1225 onichols@iiabsc.com Martha Lavigne Administrative Assistant ext. 9461 or 803.731.9461 mlavigne@iiabsc.com

South Carolina Agent & Broker is the official magazine of the Independent Insurance Agents and Brokers of South Carolina and is published four times annually. IIABSC does not necessarily endorse any of the companies advertising in this publication or the views of its writers.

Articles and information published in this magazine may not be reproduced without written consent of the IIABSC. South Carolina Agent & Broker is not responsible for unsolicited manuscripts, art or photography. The publisher cannot assume responsibility for claims made by advertisers, content provided by the editor, or for the opinions expressed by contributing authors.

For more information on advertising, contact Jim Aitkins Blue Water Publishers, 22727 161st Avenue SE Monroe, WA 98272 360-805-6474 fax: 360-805-6475 jima@bluewaterpublishers.com

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South Carolina Agent & Broker • Fall 2015

Contents

Message from the Chairman of the Board Message from the National Director Kimberly S. Lisenby, AAI: 2015 SC Outstanding CSR of the Year Evidence of Property Insurance: Replacement Cost Estimator & “100% Replacement Cost” Beware Indemnity Agreement Agent Affidavits Certificates of Insurance Overview How Do You Protect Your Agency’s Data?

Young Agent’s Conference Photo Recap IIABSC Education Luncheon Recap Why You Should Offer Excess UM/UIM to Every Client Big “I” Trusted Choice National Golf Championship Photo Recap Bi “I” Professional Liability: How to Report a Claim Save the Date: Upcoming IIABSC Events IIABSC Education & Events Calendar Member News Palmetto Partners 2015 Board of Directors and Executive Committee

Advertiser Index

Access Home Insurance 21 Allstar Underwriters 14 American Strategic Insurance 37 Amerisafe 43 Anderson and Murison 39 Assure Alliance 33 Atlas General 19 Berkshire Hathaway GUARD Ins 15 Builders Mutual Insurance 9 Burns & Wilcox 5 FCCI Insurance Group 37 Genesee General 19 Hilb Group 23 ISU Agency Network 48

6 8 10 12 18 20 26 31 34 35 38 40 41 42 44 45 46

JM Wilson 27 Jackson Sumner & Associates 2 Johnson & Johnson 24, 25 Lighthouse Property Insurance 43 M. J. Kelly of South Carolina 39 Motorists Mutual Insurance 17 Preferred Specialty 47 Risk Placement Services 3 Risk Innovations 28 SCHBSIF 7 Southern Insurance Underwriters 13 Summit 33 The National Security Group 46 UPC Insurance 39

About cover: [Photo credit: © Lbarn | Dreamstime] With the cool air that comes with the fall also means time for apple picking! While not as widespread in our state as strawberries, blueberries or peaches, there are a few apple orchards in the South Carolina upstate. No Southern Thanksgiving dinner is complete without at least one apple pie! Wishing you and yours a safe and happy holiday season.

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IIABSC Chairman of the Board Ken Finch, CPCU, CRM, CIC, AAI

I

t’s been said all good things must come to an end, and so is my tenure as Chairman of the Independent Insurance Agents and Brokers of South Carolina. Over the past two years several people have asked, “I’ll bet you will be glad when being Chairman is over, as it has taken up a lot of time.”

While there has been somewhat of a time demand, the relationships created and positive things it has resulted in, have made it very rewarding.

At our 2013 annual convention in Asheville, NC, I spoke of having a passion for your career and — more importantly — the insurance industry. During the past two years, I can tell you my passion for this industry has not waivered, but drastically increased.

I have seen first-hand the impact of our achievements such as renewal of TRIA, passage of NARABII, the NFIP reform and many other legislative items.

Attending the annual IIABA Legislative Conference in Washington, DC over the past years has given me a deeper appreciation for what our Association, both state and national, does day-in and day-out for our industry. Each member of IIABSC can rest assured we have a very strong Association looking after our interest at the state and national level.

IIABSC has always made insurance agent education a top priority. Our association continues to excel on a national level in regard to educational offerings, as we have a local staff that provides

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South Carolina Agent & Broker • Fall 2015

second to none educational experiences. This past year, Becky McCormack and the IIABSC Education Committee won its fourth consecutive Diamond Award for Excellence in Education.

In regard to promoting legislative issues IIABA is held in high regard with the South Carolina Legislature and enjoys a strong relationship with the South Carolina Department of Insurance. We also continue to be a national leader for InsurPAC. In 2014, IIABSC won its tenth consecutive Eagle Award for averaging at least $100 per agency and raising over $47,000. Nationally, South Carolina placed fifth in the nation for InsurPAC contributions.

As I look forward to 2016, I am confident of the future leadership of our Association on both the State and National level. Our next Chairman will continue the drive and leadership that so many others in past years began. I urge all of our members to become more involved in our Association in the coming years, as I have met many of you that have great talents that will only enhance the Independent Insurance Agents and Brokers Association of South Carolina.

In closing, I am reminded of a quote by Ralph Waldo Emerson, “Passion, though a bad regulator, is a powerful spring.” Find your passion and work it to its fullest!

Thank you for the opportunity to serve as chairman of the South Carolina Big “I.”

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National Director Jules Anderson, AAI

O

ur consumer website (TrustedChoice.com) keeps rolling along, with several fixes and enhancements in the past year that I thought you should know about.

TrustedChoice.com is of course, the independent agents’ initiative to regain market share online. Why online? Well, because recent studies indicate that’s where 75 percent of consumers start their search for insurance. We’re simply meeting them where they already are. In addition to content you can use (all licensed Trusted Choicew agencies are free to use consumer website content on their own agency websites) the consumer website includes rating tools where consumers can get online quotes as well as find an agent near them by simply inputting their zip code.

Mobile search enhancements Is your agency website mobile enabled? If not, Google will demote it in their search results of mobile users, which they report makes up 55 percent of their inquiries to Google Compare. Not only are Advantage agency profiles mobile enabled, but the Find An Agent lookup tool (FAA) on mobile only shows Advantage agencies. Therefore, an Advantage subscription is probably the easiest and most cost-effective way to get your agency found by mobile searchers.

Inbound phone call tracking Phone referrals have been growing and now outnumber email referrals 2:1 for Advantage subscribers. Therefore TrustedChoice.com now has trackable phone numbers attached to every Advantage agency so they can more accurately track their referrals. They also email the agency contact when a phone referral is delivered so that agents and principals know it was generated by TrustedChoice.com.

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South Carolina Agent & Broker • Fall 2015

Agency accessible referral reporting Agencies can now log in and get information regarding the performance of their agency on TrustedChoice.com.

They show you the referrals you received (Referral Management Tab), along with the statistics for TrustedChoice.com as a whole (Reporting Tab). Some of the information provided includes visitors, profile displays, click-throughs and delivered referrals.

Auto-Owners adds TrustedChoice.com Advantage to their co-op program Auto-Owners Insurance will reimburse their IIABSC member agencies 50 percent of their monthly Advantage subscription fees as part of their co-op marketing program.

Advantage Profile Help Desk on AgencyNation.com In addition to all the great information and tips on marketing their agencies to online consumers that can be found on the Agency Nation website, Advantage subscribers can also find video tutorials to help them improve their results. Visit www .agencynation.com/help-desk/advantage/ and find: • • • • • • • • • •

How to Log In to Your TrustedChoice.com Advantage Profile How to Optimize Your Referral Email How to Add Social Links to Your Advantage Profile How to Add Team Members to Your Advantage Profile How to Add Video to Your Advantage Profile How to Edit Your Advantage Profile and Republish How to Use the Referral Management Tool How to View Your Referral Delivered History TrustedChoice.com: Explaining Growth Strategy From Inception Why TrustedChoice.com Uses Trackable Phone Numbers

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Kimberly S. Lisenby, AAI

2015 SC Outstanding CSR of the Year Award

Kimberly S. Lisenby, AAI of CB&T Financial Services in Darlington has been named the 2015 Outstanding Customer Service Representative of the Year. This award is the highest honor in our state for insurance customer service reps who have distinguished themselves through contributions to their industry. The award is sponsored by the National Alliance for Insurance Education &Research, the same organization that brings you the CISR and CIC designation programs.

Nominees for the 2015 SC Outstanding CSR of the Year Award were required to show a commitment to the industry through education, involvement and achievement as well as write an essay from the following prompt: In today’s political, economic and social environment, the use of the English language has undergone significant change. Even in our industry words, partial words and titles can have a multitude of meanings—some of which are unclear and even vague. In the current insurance agency

environment, the meaning of the term, “Customer Service Representative” has frequently been replaced with the terms “Account Manager,” “Account Executive,” “Client Service Advisor,” etc. In your judgement, is there any important difference in the meaning of these titles in terms of one’s knowledge, expertise, compensation and responsibilities? Do you believe these different titles make a difference to your clients, co-workers and insurance companies?

(Winning Essay)

What is a Customer Service Representative?

First we have to determine what, if any, are the differences between the “labels” or “titles” associated customer service in the insurance industry. How does the client, society or coworkers perceive them? According to surveys and articles on the subject, they are similar and yet distinctly different.

An Account Manager or AM is regarded as an individual with more experience, expertise and education than that of a Customer Service Representative or CSR. This is someone who would manage a book of accounts and possibly have a CSR that works under them.

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South Carolina Agent & Broker • Fall 2015

An Account Executive or AE on the other hand, has obtained a higher level of education and is more sales focused. An AE makes onsite visits to build stronger customer relationships and ensures the sale and satisfaction of the end product.

While an ‘Account Manager,’ ‘Account Executive,’ ‘Client Service Advisor,’ etc. are very lucrative titles and to the customer or society may carrier a higher statute, it is still the “Customer Service Representative’ that builds the relationship with the individual and truly maintains the account. It’s the duty of the CSR to not only service the account but act as an intermediary between a company and its customers.

2015 SC Outstanding CSR of the Year Kimberly S. Lisenby, AAI of CB&T Financial Services is honored by IIABSC Chairman Ken Finch at the annual Education Awards Luncheon held Aug. 25 in Columbia. See page 34 for more about that event.

I have asked several individuals their thoughts on the different titles. While some classified the Account Manager and Account Executive as having more responsibilities, higher compensation than that of a CSR, and possibly a higher education, others stated that the Customer Service Representative is the one that makes the difference in whether they would continue the business/ customer relationship. When asked why, it was because of the level of service and the relationship they have come accustom to.

My assumption would be that various titles are compensated differently. The title in itself is prestigious and distinguished, but also opens the door for a higher income. With a title of Manager or Executive, it makes it easier to approach or attain an appointment with an owner of a business or CEO of a corporation.

Compensation also depends on the territory, the agency and level of experience one brings to the table.

As fast as the industry guidelines change, our level of expertise should advance just as quick if not more so. If the CSRs continue to increase their knowledge at the same pass as the AM or AE, then yes, they should be adequately compensated.

I have the privilege of working with an agency that values not only the customers, but the employees as well. We are continually encouraged to further our education in the industry and are adequately compensated for the work and service that we provide. We work as a team. Each employee brings to the table a vast array of experience, expertise and responsibilities.

Being a CSR in my opinion is more satisfying. A CSR builds the one-on-one relationship with the customer, and not only sees the frustration of the customer, but also the smile on their face when they leave the office satisfied. The level of service that a CSR provides to maintain a long-lasting client is vital.

I have been in the insurance industry more than 10 years, and

according to the Experienced Level Scale, I would be considered an experienced insurance professional. But in all actuality, I am not. Every class or webinar that I attend, I am constantly reminded that I am not as intelligent as I thought. As I continue to advance in the CISR program, I gain more confidence in knowing that I am going to be the best CSR I can be, and it really doesn’t matter what title I have on my business card. My job title doesn’t distinguish how well I perform my duties as a service provider.

Working on the exclusive and independent sectors, I have had the titles: Agent, Account Manager, Account Executive and Customer Service Representative. The job requirements or duties for the most part are the same. It all boils down to the size of the agency and the capabilities of that agency. But, one factor remains the same, satisfying the needs of the customer.

The customer is not dependent on me; I am dependent on him or her. The customer is doing me a favor by allowing me the opportunity to be of service.

The insurance companies depend on the CSR for their expertise on the front-end and in most cases, they are the only connection to the customer. Would they treat me differently if my title was AM or AE? I don’t think so. I have built a rapport with each company and underwriter that enables me to provide the best coverage for the customer based on the risk.

In conclusion, yes, there is a difference between the titles CSR and an AE, AM, or Client Service Advisor. Are we perceived differently by clients, coworkers and insurance companies because of these titles? Yes. Are we compensated differently?

Again, Yes. Does it determine how I will continue to progress as a CSR? NO!!!!

“Customer service is not a department. It is an attitude. It is a culture. It is a collective way of seeing the world. “Wowing” customers is not the exception. It is the rule. Exceeding expectations is not a surprise. It is planned and executed with diligence, ease and grace.” — John Murphy Fall 2015 • South Carolina Agent & Broker

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C

Certificates & EPI Best Practices

Evidence of Property Insurance:

Replacement Cost

“100% Replacement Cost” Estimator &

T

David Thompson, CPCU, AAI, API, CRIS Florida Association of Insurance Agents

hat single-page form called an Evidence of Property Insurance (EPI) has generated more email in the past six months than any of the other 16 years I’ve been with the Florida Association of Insurance Agents. The reason is that agents are being barraged with lender requests/demands for wording such as: • “Full Replacement Cost” • “100 percent replacement cost” • “Guaranteed replacement cost” • “100 percent guaranteed replacement cost” At a recent E&O class an agent told me, and in front of about five managers, that “I put ‘guaranteed replacement cost up to policy limits’ on the evidence of insurance.” I immediately reached for the valium!

It should be an invariable practice of an agency to insure structures for 100 percent of the estimated replacement cost.

Doing that, however, is NOT THE SAME as stating “100 percent replacement cost.” The problem, to sum it up, is that the policy does not support that statement, nor does it support any of the other lender request statements above.

It’s key to understand what the policy DOES say about the loss-settlement provisions after a loss. This wording, in part, is from the standard ISO homeowners policy: 1. Property of the following types: a. Personal property; b. Awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings; c. Structures that are not buildings; and d. Grave markers, including mausoleums; at actual 12

Should agents alter wording on an EPI that a dwelling is “covered for 100 percent replacement cost” at the request of a lender? Should you provide them with your agency’s Replacement Cost Estimator report on a dwelling?

South Carolina Agent & Broker • Fall 2015

cash value at the time of loss but not more than the amount required to repair or replace.

2. Buildings covered under Coverage A or B at replacement cost without deduction for depreciation, subject to the following: a. If, at the time of loss, the amount of insurance in this policy on the damaged building is 80 percent or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of any deductible and without deduction for depreciation, but not more than the least of the following amounts: (1) The limit of liability under this policy that applies to the building; (2) The replacement cost of that part of the building damaged with material of like kind and quality and for like use; or (3) The necessary amount actually spent to repair or replace the damaged building. d. We will pay no more than the actual cash value of the damage until actual repair or replacement is complete.

Some examples will illustrate how the insured could suffer a loss to the building item, but be paid on an ACV-basis and not on a replacement-costs basis.

• In a misguided move to save money, the insured removes “replacement cost on contents” coverage from the policy. A fire damages the house to include wall-to-wall carpet and built-in appliances. While these two items are clearly building items, the unendorsed policy states that losses to these items are ACV. Had the “replacement cost on contents” endorsement been

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added, the loss would be settled on a replacement cost basis. ACV applies, not replacement-cost loss settlement.

After a loss that destroyed an attached carport and attached screened-in patio, the insured decides not to replace those parts of the dwelling and just pocket the money. The policy states that for replacement-cost loss settlement to apply, the insured must make the replacement. Since that was not done, ACV loss settlement applies, and there is no replacement-cost settlement.

The insured makes a significant addition to the house and fails to advise the agent. After the loss, it’s determined that the house is not insured to 80 percent of the replacement cost. Therefore, replacement-cost loss settlement does not apply and the insured is paid the greater of the ACV or the amount due after the application of a coinsurance penalty.

A windstorm severely damages the house and totally destroys the insured’s $8,000 wooden fence. The policy states that other structures that are not buildings are settled on an ACV basis. Replacement-cost loss settlement does not apply.

Imagine the insured, lender or worse yet the insured’s attorney presenting an EPI that stated, “Replacement cost up to policy limit.”

Putting any wording on an Evidence of Property Insurance (or

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South Carolina Agent & Broker • Fall 2015

any other document) that is not supported violates Florida Statute 626.9541 [EDITOR’s NOTE: In SC, this practice would also be considered a misrepresentation of the policy provisions, which is a violation of the SC Unfair Trade Practices]. Any insurance professional using such wording runs the risk of disciplinary action to include possible loss of license and/or significant fines.

If the lender requests/demands such wording, prepare the EPI exactly as per the ACORD Forms Instruction Guide and send it along with a copy of the homeowners policy to let the lender read the policy on their own.

An agency should not provide the Replacement Cost Estimator to a lender. A reply such as, “On the advice of our professional liability insurance company and on the advice of our legal counsel, we are unable to provide the document(s) that you have requested.”

SwissRe, (FAIA’s and IIABSC’s lead E&O carrier) recently stated that: Agents should not provide copies of any RCE, ever. The agency has no relationship with the lender and is under no obligation to do so. We don’t recommend that they provide it to the customer either. If they don’t provide it to the customer, then they shouldn’t provide it to anyone. It is the lenders job to determine what they think the value of the house is, the agent is not a real estate appraiser. At most they can provide an ACORD form certificate of insurance and nothing else.

In addition, taking on a (voluntary) role advising the lender is ill-advised. Valuation issues regarding the adequacy of limits in place drive a lot of our commercial exposures. Most, if not all, lenders confirm property valuation before agreeing to loan money, so the lender is in a much better position to evaluate property value than an insurance broker. It sounds like the lenders have recently been to some seminar where the advice was given to obtain the RCEs from the agents/brokers.

An additional thought: every time the issue of limits/ replacement cost is raised, that probably is a moment where the agent/broker should respond with a comment to the effect that, “Our office is not able to evaluate, and has not evaluated, the actual cash value or replacement cost of this property.

The property owner and lender are in the best position to evaluate the value of real estate. We urge you to have the property (re)appraised by a licensed appraiser on a regular basis to ensure that the limits in place are, and remain, adequate.“ Remember, most importantly, that the Replacement Cost Estimator is only what the name says, an estimate. Calculating the replacement cost of a structure is not an exact science, and if you were to use three different RCE vendors on the same

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structure, you’d get three different figures. Likewise, if you asked three different builders to prepare an estimate to build a structure, you’d get three different figures.

Additionally, while some lenders may say their guidelines require them to get a copy of the Replacement Cost Estimator, there is no such requirement in the Fannie Mae guidelines, which a majority of lenders fall back on. Furthermore, there is no obligation of an insurance agency to comply with guidelines drafted by a lender.

It’s well established today that many appraisers no longer provide an estimated replacement cost on their appraisal. I personally spoke with one appraiser who said, “I know a lot about the market value of a house but, I’m not a contractor and I know next to nothing about rebuilding costs. I’m not putting my license and career at stake by guessing at the replacement cost of a house.” The same approach is taken by many insurance agents. If the lender wants to determine the replacement cost of a structure, they have resources available to do that. Resources to get an appraisal that includes the replacement cost by contracting with a firm that specializes in replacement cost estimates or to use a service such as e2Value, which provides replacement-cost software.

While an agency certainly does not want to stand between the customer and a loan closing, the agency must also take steps to protect themselves. Providing the Replacement Cost Estimator to anyone outside the agency increases the E&O exposures of the

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agency. Requests to provide the Replacement Cost Estimator coupled with a request on the Evidence of Property Insurance for wording such as “100 percent/guaranteed/full replacement cost,” can’t be honored. Placing such wording on an Evidence of Property Insurance forms misrepresents the policy.

Florida, where he was a licensed agent selling all types of insurance. He’s been with the Florida Association of Insurance Agents for nearly twenty years, where he presents continuing education seminars throughout the country on a variety of industry topics. See him at the upcoming Lenders Gone Wild webinar (see sidebar) or contact him at dthompson@faia.com.

David A. Thompson, CPCU, AAI, API, CRIS began his insurance career in a family-owned independent agency in Vero Beach,

New Webinar When customers buy real estate or procure loans for business activities or property acquisitions, lenders often have many insurance-related requirements. Many of them are necessary and proper. However, many are not and are based on antiquated requirements, onerous demands, or are possibly in violation of state laws.

This webinar focuses on issues that agents should be aware of in order to

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South Carolina Agent & Broker • Fall 2015

best serve the needs of their customers while minimizing E&O exposures.

At the conclusion of this seminar, you should be able to:

•

Respond to unreasonable lender requests involving property valuation and other insurance issues.

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Distinguish between proper and improper lender requests.

•

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Understand the difference between lender preferences and requirements of entities like Fannie Mae and the NFIP.

Understand “certificate” honored.

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Ensure that the agency follows proper legal requirements and E&O procedures.

what types requests can

of be

Fall 2015 • South Carolina Agent & Broker

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C

e r a w e B

Certificates & EPI Best Practices

A

INDEMNITY AGREEMENT AGENT AFFIDAVITS

By Bill Wilson, IIABA Virtual University

ll too often, agents are asked by third parties to sign an “agent affidavit” attesting that an insured’s insurance program complies with a contract the insured has signed with that party. Chances are your customer had no idea of the difference between CGL contractual liability and an indemnity agreement.

Here is a relevant “Ask an Expert” question, the answer to which illustrates the typical problems with these affidavit requests.

Question: Below are excerpts from a contract our insured has entered into.

Is this covered under the ISO CGL policy?

4.1 The [insured] will defend, indemnify and release ABC and XYZ, and their subsidiaries, affiliates, successors and assigns (collectively called “Indemnified Parties”), against all claims, causes of action, damages, liabilities, attorneys’ fees and related expenses (“Claims”) which the Indemnified Parties may suffer or for which the Indemnified Parties may be liable, by reason of actual or claimed injury (including death) to any person or actual or claimed damage to any property, directly or indirectly caused or contributed to, or claimed to be caused or contributed to by reason of any act, omission or negligence, including strict liability, whether active or passive, of the [insured], its employees or its subcontractors, unless caused by the sole negligence or sole willful misconduct of the Indemnified Parties.

4.2.3 The [insured]’s general liability insurance will cover the indemnity agreements and obligations in Paragraph 4.1. [emphasis added] 18

South Carolina Agent & Broker • Fall 2015

Answer: I’ve read tons of indemnity agreements over the years, and I have NEVER, EVER, EVER, EVER seen one that a CGL policy fully covered. This example is actually one of the less onerous that I’ve seen. However, the reference to “all claims, causes of action, damages, liabilities, attorneys’ fees and related expenses” is something too broad for a CGL policy. The CGL policy covers BI and PD, and optionally AI and PI. It does not cover ALL types of claims and damages. In addition, the “all” wording implies there are no exclusions permitted. The CGL policy has lots of exclusions. These types of agreements often require coverage “without limitation” as well, meaning that you’d have to issue a CGL policy with no limits to be in compliance.

So, the contract requirement that “The [insured]’s general liability insurance will cover the indemnity agreements and obligations in Paragraph 4.1.” is impossible to comply with.

Again, NO CGL policy I’ve ever seen will fully comply with indemnity agreements or contract insurance requirements of this type.

Still, unsuspecting agents across the country routinely indicate on certificates or via “agent affidavits” that the insurance program is in compliance with the contract an insured has signed. Increasingly, insurance department statutes, regulations and/or directives are implementing civil and criminal penalties on agents who misrepresent policy coverages. Ohio can impose a $25,000 fine per offense. In Louisiana, fraudulent certificates are subject to a $5,000 fine and up to five years in prison at hard labor. Alabama (and other states) specifically reference “agent affidavits” or “agent opinion letters,” with Alabama potentially imposing up to a $10,000 fine for inaccurate affidavits.

If you are attesting that a customer’s insurance program fully complies with the contractual insurance requirements(s) he has entered into, there is a 99 percent chance what you’re

saying is not true. For that reason, we strongly suggest that you do not indicate on a certificate or on any kind of separate affidavit that the insurance program of your insured complies with the signed contract. The certificate and any accompanying policy forms are designed to provide FACTUAL information about the insurance program, not make any kind of qualifying statement that they are in compliance with anything. Look at it this way, it’s the certificate holder’s contract, so let the certificate holder decide whether the insurance provided meets the contract specs.

This entire issue often belies a fundamental misunderstanding by contract drafters and agents as to the difference between indemnity and insurance. Below are two outstanding IRMI articles authored by VU faculty member Craig Stanovich of Austin & Stanovich Risk Managers, LLC. I strongly encourage your commercial lines producers and CSRs, particularly those involved in the certificate process, to read them.

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“Contractual Confusion—Assuming the Liability of Others”

by Craig F. Stanovich, July 2009 http://www.irmi.com/expert/articles/2009/ stanovich07a-cgl-general-liability-insurance.aspx “Contractual Liability and the CGL Policy”

by Craig F. Stanovich, May 2002 http://www.irmi.com/expert/articles/2002/ stanovich05.aspx

William C. “Bill” Wilson, Jr., CPCU, ARM, AIM, AAM is director of the Virtual University of the Independent Insurance Agents & Brokers of America (IIABA).

He was the Director of Education & Technical Affairs for the Insurors of Tennessee from 1988-1999. Prior to 1988, he was employed by Insurance Services Office, Inc. as the manager of their field operations in Tennessee and Kentucky.

See the IIABA Virtual University (iiaba. net/vu) for more information about certificates of insurance.

Fall 2015 • South Carolina Agent & Broker

19

C

Certificates & EPI Best Practices

20

s e t a c fi ti Cer e c n a r u s of In Overview

•

A certificate is not a contract, but a snapshot of coverages and policy terms at the time they are issued.

•

You are not obligated to honor a certificate request from anyone. There is nothing in the insurance contract that requires compliance to a request from the insured or third party. Of course, the failure to do so may result in losing the account. Having written policies on when to decline to issue certificates and applying them without exception gives your agents something to fall back on and soften the blow of having to say “no” to clients.

•

Pending cancellation is a great reason to decline to issue a certificate of insurance.

•

In the case of a pending cancellation, be sure to list the pending cancellation date as opposed to the policy expiration date for the certificate expiration date. It would likely cost significantly more for your E&O carrier to settle with the certificate holder’s property carrier if the insured doesn’t renew and something happens to trigger a claim on coverage that is no longer valid

South Carolina Agent & Broker • Fall 2015

than it would to reissue the certificate when the insured inevitably renews.

•

Providing notice of cancellation to certificate holders is less of an issue that it used to be because the latest ACORD form removed the “will endeavor to” language because they knew that carriers weren’t doing it. Instead it says that cancellation notices will be delivered in accordance with policy provisions, which generally means the named insured and any additional insureds.

•

In most cases with wholesalers and E&S lines, the wholesaler should be issuing certificates.

•

With standard lines, it is appropriate for you to issue the certificate, but you should always send a copy of the certificate to the insurer, even if they have stated that they don’t want them.

•

You should NEVER EVER modify an ACORD certificate or policy form! It is a violation of copyright law to modify any ACORD forms without a special licensing agreement.

•

Some contractors are refusing to accept the current editions of ACORD forms, insisting that agents

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issue past editions instead. You should not do this because you are putting yourself at high risk of misrepresenting coverages.

•

Be wary of non-ACORD forms. Do not issue one without the express permission of the insurance company, and even then it is preferable to have the insurer do it. Do not issue one with language that incurs liability for the agency to do something not called for in the underlying policies. Do not issue one that is a clear rip off of the ACORD form.

•

Certificates should not be used to quote any wording that amends a policy unless the policy itself has been amended! As an agent you have no authority to change the insurance contract or issue a certificate that indicates terms and conditions not provided for in the policy. (Lenders and other third parties are constantly asking agents to do this!)

•

You can’t really say additional insured status is provided on a “primary and noncontributory” basis with absolute certainty.

•

Don’t sign any “agent affidavits” attesting that an insured’s insurance program complies with a contract the insured has signed with that party.

Chances are, your customer has no idea of the difference between CGL contractual liability and an indemnity agreement, and it is impossible to say that “all claims” are covered.

•

Certificates should not be used to waive rights.

•

Certificates should not be used to quote wording from a contract.

•

Certificates should not be used in place of an endorsement.

•

Remember that just like any other insurance policy, your E&O policy doesn’t cover everything that could happen. Read your policy, but it likely doesn’t cover contractual liability, fraud or intentional misrepresentation, all of which could come in to play with the mishandling of certificates of insurance.

Source: IIABA Virtual University, (iiaba.net/vu)

22

South Carolina Agent & Broker • Fall 2015

IIABSC Education Dept. honored with fourth consecutive EIE Diamond Award IIABSC was honored with its fourth consecutive national Excellence in Education Diamond Award at the Fall Leadership Conference in New Orleans, La. Known as the EIE Awards, they celebrate and recognize state associations who have made significant contributions to education for their members and the industry in the key areas of class offerings, continuing education, professionalism, designation offerings, industry collaboration, planning, marketing and resources. Diamond is the highest level of recognition.

“IIABSC concentrates our time and energy on high-quality education offerings rather than fast, cheap and easy,” said IIABSC Vice President Becky McCormack. “Our programs make our members better at what they do, and therefore a better choice for their customers.”

IIABSC Vice President Becky McCormack (center) along with IIABA Executive Committee member Jon Jensen (left) and IIABSC President Frank Sheppard (right) accepts the IIABSC Education Dept’s fourth consecutive diamondlevel IIABA Excellence in Education award during the national Fall Leadership Conference.

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////////

Agents Council for Technology has the tools you need to protect your agency from cyber threats and to prepare your agency for recovery should disaster strike.

Below is a summary of their Security Issues Guide along with some SC specific information to give you and idea of what you can find at independentagent.com/ACTSecure.

//// Take small steps to protect your agency and prevent cyberattacks //// 2 Knowledge

independentagent.com/ACTSecure 1

Prevention

Mitigate Cyber Risk With proper planning, you can protect your agency from significant risks, including data breach and cyberattack. Find: disaster planning and recover resources.

Mobile devices increase security exposures While mobile is becoming essential, using mobile devices to conduct business exposes your agency to additional security threats. Find: Info on encryption, BYOD, secure wireless connections and other device security.

Protect Passwords A Post-It note on a computer monitor doesn’t count. Discover the best way to manage passwords. Find: resources to help you manage passwords and implement a strategy.

Educate & train staff Make sure everyone knows their roles and responsibilities in safeguarding company assets and client information. Find: HIPAA security awareness resources, agency security guidelines.

Monitor Equipment in Real Time Understand and monitor the contents of data flowing in and out of your network. Find: Data Loss Prevention solutions

Electronic communication laws & best practices Know the laws and master the best practices regarding electronic communications. Find: resources on esignature, the Uniform Electronic Transaction Act and ACORD standards.

Use Application Service Provider (ASP) systems for security ASP systems keep agency management and other system data accessible, backed up and automatically updated. Find: ASP comparisons, price points, antivirus in mind.

26

Stay on the right side of the law Understand the data breach laws and prevention requirements for your state (SC information can be found below). Find: resources for navigating PCI, FTC, Omnibus Rule and more

South Carolina Agent & Broker • Fall 2015

3 Document Retention Should it stay or should it go?

Your agency needs a compliant document retention strategy to help prevent information from getting in the wrong hands. Find: federal legislation, state laws and best practices on document retention and destruction.

Go paperless Before taking the leap, it’s critical to make a plan for a successful paperless transition. Find: Data hosting, information on security vulnerabilities and precautions.

Protect confidential information Know state and federal laws, conduct risk analysis and compliance gapping, then create PHI and PPI compliant policies.

Find: rules and tools for HIPPA, FTC, HITECH and PCI. Document destruction Develop and follow a process for destruction of paper and electronic files located on LANs, cloud drives, local and mobile devices, and USBs/ other external drives. Find: FTC disposal of consumer information and shredding resources.

4 Security Database encryption Err on the side of caution when it comes to encrypting data.

We’ve got the best practices for compliant data encryption and a primer on state regulations. Find: State privacy and PII regulations.

COMMITMENT A PROMISE WE DON’T TAKE LIGHTLY

“With 37 years in the bond business, I know our response time can be the difference between our agent writing a new piece of business or not.

I don’t go home at night until every phone call and email has been answered. ”

Steve Kuykendall Surety Manager

Secure VoIP Be aware of the overall security level of your data infrastructure, including your IP phone system. Find: resources to protect your VoIP traffic from packet analyzers.

Secure remote access of agency systems Remote access requires awareness, authentication, intrusion detection/prevention systems and a secure VPN to lessen risks. Find: remote access software rankings, VPN and server specifications.

5

South Carolina (Financial Identity Fraud and Identity Theft Protection Act)

Security Breach definition A security breach is the unauthorized access and acquisition of computerized records or other useable data (not rendered useless by encryption, redaction or other methods) and when illegal use of the information is reasonably likely to occur or use creates a material risk of harm to a SC resident.

Personal Identifying Information definition Personal Identifying information that businesses are responsible for protecting consists of a consumer’s first name or initial

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Fall 2015 • South Carolina Agent & Broker

27

combined with their last name and unencrypted or unredacted data including their social security number, driver’s license number or financial account numbers (bank account, credit card, debit card, security codes) that would allow access to the consumer’s financial accounts.

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Social Security Numbers Agencies should not print or make available six or more digits of a person’s social security number on any benefits cards, user ids, or other printed materials (unless required by state or federal law), nor should they be used in any online transaction without required passwords, secure internet connection or other encryption.

If you have been breached: • You must notify consumers that their information has been breached immediately upon discovery. Delay is only acceptable if a law enforcement agency determines it would compromise the investigation.

• Notice to consumers should be written, but electronic is acceptable if the primary method of communication is by electronic means. Very large breaches could accommodate substitute notice by means prescribed in the statute.

• If the breach affects more than 1,000 persons, you must report the breach to the Consumer Protection Division of the Department of Consumer Affairs, telling then when the breach occurred, the number of affected persons, when notice was given to affected persons and a copy of the notice sent.

Elizabeth Smith, Territory Marketing Manager

Penalties By not properly protecting a SC resident’s personal identifying Information in your agency’s retention or disposal of records or failing to provide timely notice of a security breach, agencies are subject to penalties of three times the actual damages or $1,000 per resident affected for each incident, whichever is greater, plus attorney’s fees and costs. Your agency would also be subject to private civil action by any affected resident to recover damages plus attorney’s fees and costs.

(800)913.6696 riskinnovationsllc.com/i iabs c

Gramm-Leach-Bliley Act Most independent agents that are in compliance with the GrammLeach-Bliley Act are considered in compliance with South Carolina’s data security rules other than reporting breaches of 1,000 residents or more to the Department of Consumer Affairs.

Please note that GLBA requirements include a written information security plan as well as assessing and addressing the risks to consumer information in all areas of your agency’s operation.

Resources explaining GLBA can be found at the ACT Security Issues Guide.

View full ACT Security Issues Guide at IndependentAgent.com/ ACTSecure

28

South Carolina Agent & Broker • Fall 2015

Our ability to focus on specialized lines of coverage gives us an advantage to quickly and accurately assess our customers’ needs. Our staff is very diverse, experienced and eager to help find the best solution for a variety of risks.

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Fall 2015 • South Carolina Agent & Broker

29

30

South Carolina Agent & Broker • Fall 2015

Full photo slideshow on our website

www.iiabsc.com

Fall 2015 • South Carolina Agent & Broker

31

July 30 – Aug 2 Conference photos continued

32

South Carolina Agent & Broker • Fall 2015

Renaissance Hotel • Asheville, SC

匀䴀

吀栀攀爀攀 挀愀渀 戀攀 渀漀 搀漀甀戀琀 琀栀愀琀 愀氀氀 漀甀爀 欀渀漀眀氀攀搀最攀 戀攀最椀渀猀 眀椀琀栀 攀砀瀀攀爀椀攀渀挀攀⸀ ጠ 䤀洀洀愀渀甀攀氀 䬀愀渀琀

眀眀眀⸀猀甀洀洀椀琀栀漀氀搀椀渀最猀⸀挀漀洀

倀漀氀椀挀椀攀猀 愀爀攀 甀渀搀攀爀眀爀椀琀琀攀渀 戀礀 䈀爀椀搀最攀ǻ攀氀搀 䌀愀猀甀愀氀琀礀 䤀渀猀甀爀愀渀挀攀 䌀漀洀瀀愀渀礀 愀渀搀 䈀爀椀搀最攀ǻ攀氀搀 䔀洀瀀氀漀礀攀爀猀 䤀渀猀甀爀愀渀挀攀 䌀漀洀瀀愀渀礀Ⰰ 愀甀琀栀漀爀椀稀攀搀 椀渀猀甀爀攀爀猀 椀渀 䄀䰀Ⰰ 䄀刀Ⰰ 䘀䰀Ⰰ 䬀夀Ⰰ 䜀䄀Ⰰ 䴀匀Ⰰ 䰀䄀Ⰰ 一䌀Ⰰ 匀䌀Ⰰ 愀渀搀 吀一㬀 䈀甀猀椀渀攀猀猀䘀椀爀猀琀 䤀渀猀甀爀愀渀挀攀 䌀漀洀瀀愀渀礀Ⰰ 愀甀琀栀漀爀椀稀攀搀 椀渀 䘀䰀Ⰰ 䜀䄀Ⰰ 䬀夀Ⰰ 一䌀Ⰰ 匀䌀 愀渀搀 吀一⸀ ꤀㈀ ㄀㔀 匀甀洀洀椀琀 䌀漀渀猀甀氀琀椀渀最 䰀䰀䌀 簀 ㈀㌀㄀ 䌀漀洀洀攀爀挀攀 倀漀椀渀琀 䐀爀椀瘀攀Ⰰ 䰀愀欀攀氀愀渀搀Ⰰ 䘀䰀 ㌀㌀㠀 ㄀

Fall 2015 • South Carolina Agent & Broker

33

2015 Big “I” SC Congratulations to our newest designees!

Education Awards Luncheon

August 25, Embassy Suites, Columbia, SC

AIAM

Mary “Libbie” Baxley, AIAM Linda Brown, CISR, ACSR, AIAM Amy Bunton, AIAM Kimberly Cooper, AIAM Pamela Kay Eustace, AIAM Jean Ford, AIAM, CISR Wendy Goins, AIAM Andrea P Gradel, CISR, AIAM Amanda Guenther, CISR, AIAM Dari Hyder, AIAM Ashley Kendrick, AIAM, CISR Paulette Klingel, CISR, AIAM Debra Martin, CISR, ACSR, AIAM Hilary McCarthy, AIAM Brenda Mew, AIAM Lauren Moody, AIAM Candise Pender, CISR, AIAM Anne-Marie Rice, CISR, ACSR, AIAM Randy Roberts, CPIA, CAS, AIAM Bonnie Schattle, CISR, AIAM Susanne Schill, CISR, AIAM Wendy Seguine, CISR, AIAM Cynthia Shumpert, AAI, CISR, AIAM, CRIS Loraine Sottile, CISR, AIAM, Deborah Stender, AIAM DeDe Wade, CISR, AIAM Jeri Whitaker, CISR, ACSR, AIAM

CIC

Tamara L. Altenburg, CIC, CISR, CPIW Justin C. Felker, CIC, ARM, AAI Ann K. Gustafson, CIC Ashley S. Hall, CIC Hilary B. Hopkins, CIC, CISR Kristi M. Hutto, CIC, CISR Claire McCormack, CIC, CISR Edward S. Pardue Jr., CIC, ARM, AU, AIS, API Susanne U. Player, CIC, CISR, ACSR Paula J. Stubblefield, CIC, CISR, CPIW Robert C. Tiller, CIC Peter J. Vaska, CIC, CISR Cameron L. Ward, CIC

CISR

Kathleen Nicole Ambrusio, CISR Tara R. Anderson, CISR Naomi Antoinette Aranda, CISR Christina L. Biddle, CISR Anne S. Blocker, CISR Adriane E.T. Boulware, CISR Elite Jenny N. Brady, CISR 34

South Carolina Agent & Broker • Fall 2015

Tammy G. Bryant, CISR Maggie D. Chandler, CISR Jacqueline S. Clayton, CISR Kevin L. Clegg, CISR Donna W. Courtney, CISR Valerie B. Crane, CISR, AAI Travers L. Davis, CISR Trudy B. Descaro, CISR Jack Dean Ecrement, CISR Elite, AIC Lori E. Fulcher, CISR Kelly W. Hall, CISR Jeffrey C. Halseth, CISR Michelle Hutchins Haltiwanger, CISR Paige D. Harris, CISR Heather Elizabeth Hiott, CISR Judith Jimenez, CISR April Owens Jordan, CISR Robert B. Jurick, CISR, AAI Ronald O. King, Jr., CISR Alison Rea Komarowski, CISR Tracy A. Leigh, CISR Kari S. Lenz, CISR Cindy J. Little, CISR Lisa Shepard Longhurst, CISR

Casey R. Mason, CISR Melissa A. Mason, CISR Matthew Phillip Meeks, CISR, AINS Kristine Michnuk, CISR Ryanny Mok, CISR Rebekah Livingston Morris, CISR Heather Holley O’Rourke, CISR Telisha R. Pollard, CISR Nancy Kristin Rainey, CISR Jennifer Lynn Riedel, CISR Laura K. Roberts, CISR Dana J. Roll, CISR Kelly Wyatt Sigg, CISR Katherine Louise Smith, CISR, ACSR Dustin R. Stimson, CISR Genevieve B. Sumner, CISR Amanda H. Surface, CISR David Robert Weiss, CISR Justin Wetzel, CISR Angela Brooke Wilson, CISR

CRM

Blake Adams, CIC, CRM

Why You Should Offer Excess UM/UIM to Every Client

W

By April Shrewbury Big “I” Umbrella Program Manager

e’ve all heard the stories. A family of five is burdened with horrific medical bills because of an accident caused by a drunk driver who couldn’t afford insurance due to his bad driving record. A child walking to school faces a lifetime of difficulty after being struck by a texting driver—a struggling college student with state minimum auto limits. A pair of retired sweethearts fall victim to a hit-and-run driver.

As an insurance agent, you can’t physically protect your clients from heartbreaking situations like these…but they do rely on you to protect them financially when tragedy strikes. This is where excess Uninsured/Underinsured Motorist Coverage enters the picture.

injuries from an accident caused by the owner or operator of an uninsured or underinsured vehicle. Excess UM/UIM from a personal umbrella policy pays after the auto policy’s UM/UIM limits have been exhausted.

It’s important for a client to understand that UM/UIM coverage comes into play when an insured is involved in an accident and the person who caused it either doesn’t have any insurance or doesn’t have enough insurance to pay for your client’s injuries. It would also come into play if they were the victim of a hit-and-run (in a vehicle, on a bike, or as a pedestrian), leaving them with nobody’s insurance policy to collect against, making it an “uninsured” motorist claim.

Most would buy if they understood it How effectively can you explain UM/ UIM coverage to a client who doesn’t know much about insurance? In layman’s terms, UM/UIM coverage is insurance that pays for the client’s

Prevalence of uninsured/ underinsured drivers According to recent estimates by the Insurance Research Council (IRC), roughly one in seven drivers is uninsured. Add to that the number of drivers who carry state minimum auto limits, and it’s enough to make a person want to stay home for good.

Unfortunately, this should come as no surprise given the type of TV commercials we see from some auto insurance companies.

Too often, the emphasis is on getting a cheap rate, and drivers are besieged with ads about that encourage them to buy “state minimum” auto limits in order to save money. There’s no denying that it can be a temptation in a struggling economy.

All the more reason to make sure your clients are protected from the drivers around them, with UM/UIM coverage on both their auto and personal umbrella policies.

It’s about the coverage, not the cost There’s no way around admitting that UM/ UIM coverage can be expensive and a tough sell if a client is trying to keep their premium down. One wise agent explains it to his personal umbrella clients this way: if you’re buying an umbrella so that you can cover the injuries of strangers, wouldn’t you want to do the same for your own family, instead of blindly relying on someone else to cover Fall 2015 • South Carolina Agent & Broker

35

your injuries, someone who might not have insurance at all let alone enough for if you or your family members have serious injuries or need hospitalization?

When working up an auto or umbrella quote, do you merely ask “Do you want to add Uninsured/Underinsured Motorist Coverage” and wait for a simple “Yes” or “No”?

If so, try explaining what the coverage is first, and THEN ask if they want it. That way, the focus is on the value of the coverage, as opposed to its cost.

Protect yourself from “failure to offer” E&O claims If your client is injured by an uninsured or underinsured driver and doesn’t have basic or excess UM/UIM limits of their own, you can bet that they’ll be asking (quite possibly through an attorney) why you didn’t offer them this coverage.

Protect your client and protect yourself and your agency from a “failure to offer” E&O claim by always explaining and

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36

South Carolina Agent & Broker • Fall 2015

offering UM/UIM coverage. Consider documenting a client’s refusal of this coverage as well.

This tactic should apply not only to auto policies, but also to personal umbrella policies. Just as a client needs excess liability above their auto policy limits, they need excess UM/ UIM coverage. While many home and auto carriers offer a personal umbrella, they may not offer excess UM/UIM coverage. Always offer an umbrella with that coverage.

Hopefully this article will help you discuss excess UM/ UIM with your clients. Keep in mind that the Big “I” offers your agency access to two umbrella carriers, including our endorsed market through RLI. Below are some of the distinctions between those two markets and a real claims example to further illustrate to clients the benefit of UM/UIM coverage.

RLI CLAIMS EXAMPLE Mrs. Policyholder was on her way to work when she was rear-ended on the highway, causing her to run off the road into a concrete barrier. She sustained multiple internal injuries, including a severely fractured ankle, which led to months of treatment and an infection that required additional hospitalization and more surgery.

Unable to work during her recovery, she lost more than $100,000 in income while racking up medical bills of more than $120,000. She was no longer able to walk long distances or enjoy many of her favorite activities, impacting her life significantly.

The driver of the other vehicle had state minimum limits of only $10,000 per person/$20,000 per accident.

Mrs. Policyholder was paid the full $10,000 available, but the other driver had no other insurance and no assets.

Mrs. Policyholder, however, had UM/UIM limits of $250,000 per person/$500,000 per accident under her own auto policy, as well as $1M of UM/UIM coverage under her personal umbrella policy. She was able to recover the amount from her own insurors that she would have been entitled to recover from the other driver, had he carried enough insurance. If she hadn’t purchased UM/UIM coverage her payment would have been only the $10,000 policy limit of the other driver.

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The best phone call I’ve gotten started with the words, ‘Brad, you saved my life.’ ” Brad Ross, ARM, AIS Loss Control Manager FCCI Southeast Region Duluth, Georgia Now, let’s talk about your business.

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Fall 2015 • South Carolina Agent & Broker

37

SC Trusted Choice® Big “I” National Championship

June 29–30, 2015 Orangeburg Country Club Orangeburg, SC

Christian Salzer, 17, of Sumter, S.C., and Kayla Kozak, 16, of Bluffton, S.C. each topped their respective divisions in the SC qualifier of the Trusted Choice Big “I” National Championship held June 29 – 30, 2015, at the Orangeburg Country Club in Orangeburg, S.C. Salzer shot a combined score of 145 in two rounds and Kozak shot a 147.

Second place for the boys was Charles Dallery, 18, of Sumter, S.C., with a two-day score of 146. Third-place boys was George Eubank, Jr, 16, of Spartanburg, S.C., with a final score of 148. These four teenagers earned the chance to advance to the Trusted Choice Big “I” National Championship set for Aug. 3-6 at the Prairie Dunes Country Club in Hutchinson, Kansas.

They were joined by Justin Hood, 18, of St. Matthews, S.C., who scored low enough in the 2014 national championship to automatically qualify for play this year in Kansas.

This tournament is a community-service project sponsored by the SC Trusted Choice Agents. Nationally, at least 3,000 boys and girls play in more than 300 local and state-qualifying tournaments organized by nearly 2,000 independent insurance agents.

View photos and final results at www.iiabsc.com/jrgolf 38

South Carolina Agent & Broker • Fall 2015

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Fall 2015 • South Carolina Agent & Broker

39

How to

REPORT AN E&O CLAIM

S

wiss Re Corporate Solutions is committed to helping IIABA members protect their assets and reputations. The Swiss Re Agents’ Professional Liability claims team realizes that when you are faced with a claim or a potential claim, it can be a traumatic event. That’s why we are dedicated to providing prompt, courteous and efficient claims handling from experienced claims professionals.

The Swiss Re insurance agents E&O policy requires that insureds report “claims” and/or “potential claims.” A normal agency reaction is that the mere reporting of a claim or potential claim could result in an adverse underwriting action taken toward the agency. However, reporting a potential claim to the Swiss Re claims department does not automatically result in any underwriting action by the Swiss Re underwriters. Each claim/potential claim is reviewed on an individual basis by the underwriter to determine the facts and circumstances. In fact, since the Swiss Re policy is a claims-made policy, it is to the insured’s benefit to report any and all claims/potential claims to ensure that they are timely reported within the policy period.

As a general rule, if no reserves or payments are applied to a claim, no underwriting action will be taken. For the purposes of both the Loss Control Credit and the Claim-free Experience Credit, a claim is defined as an Errors and Omissions incident or situation for which any expense payment, loss payment or loss reserve is made or established by or on behalf of the insured in excess of certain values (plus any applicable deductible) that are based on GAP size.

40

South Carolina Agent & Broker • Fall 2015

Food for Thought Below are some things to think about should your agency be involved in a potential E&O claim: • Do not admit liability—to the insured or the insured’s insurance company.

• Be empathetic, but be careful what you say.

• Do not discuss the existence of an E&O policy with anyone—and don’t provide copies.

• Complete a claim reporting form and forward it to your E&O carrier or producing state association along with details of any conversation or correspondence you have received making a demand for damages.

• Do not offer to pay the claim yourself.

• Involve your E&O Improvement Specialist, or other appropriate agency personnel, and appoint a person who will be the agency’s sole point of contact for all matters related to the claim.

• Interview every person involved in the claim—and remember it’s not about the “who,” it’s about the what, when, where and how.

• Have each person involved in the situation write a narrative describing the incident and check the customer’s file to determine the chronology of events.

• Forward all documentation to your E&O carrier.

• Cooperate fully with your E&O carrier.

Save the date

for these upcoming events

2016 Spring Conference

March 16-17 Embassy Suites Columbia, SC

2016 Annual Convention

Oct. 30-Nov. 1 Grove Park Inn, Asheville, NC

Next Fall

We’re back at the Grove Park!

41

Calendar

View up-to-date calendar, course descriptions and register using our online Education & Event Calendar at www.iiabsc.com/education

m m

CLASSROOM COURSES WEBCAST/WEBINAR - no test required for CE Credit

October

42

06

Business Income, Beyond the Basics, 3 hrs. P&C

06

E&O Mock Trial, 2 hrs. P&C

06

Liability Issues: Indemnity Agreements & Additional Insureds, 2 hrs. P&C

06

Workers Comp, Beyond the Basics, 3 hrs. P&C

06

CISR Personal Residential Property, Columbia, 7 hrs. P&C

07

CISR Commercial Property, Greenville, 7 hrs. P&C

08

Professional Ethics in the Insurance Industry, 3 hrs. Ethics

09

Data Privacy Insurance, 2 hrs. P&C

09

Hot Topics in Personal Lines, 2 hrs. P&C

12

Surplus Lines License Review Course, 3 hrs. P&C

13

CISR William T. Hold Seminar, Columbia, 7 hrs. P&C

13

Commercial Lines Claims that Cause Problems, 2 hrs. P&C

13

E&O Risk Management – Meeting the Challenge of Change Part I,

3 hrs. P&C

13

E&O Risk Management – Meeting the Challenge of Change Part II,

3 hrs. Ethics

13

Shake, Rattle & Roll: Earthquake Basics, 1 hr. P&C

14

Affordable Care Act, Update 2015 & Beyond, 3 hrs. L&H

14

AIAM Day 2, Charleston, 6 hrs. P&C

14

CISR Commercial Casualty II, Rock Hill, 7 hrs. P&C

15

Insurance and the Property Lease, 2 hrs. P&C

16

Rental Cars, More than Meets the Eye, 2 hrs. P&C

18-20

IIABSC Annual Convention, Hilton Head

19

Directors and Officers Liability Insurance, 2 hrs. P&C

20

Those Kids and Their Cars, 2 hrs. P&C

20

Certificates of Insurance, 3 hrs. P&C

20

Insurance & BBQ, the Hidden Connection, 3 hrs. P&C

21

NFIP Basic Course w/ 2014 Updates, 3 hr. P&C

22

IIABSC Executive Leadership Program Day 3, Columbia

22

E&O Risk Management – Meeting the Challenge of Change Part I,

3 hrs. P&C

22

E&O Risk Management – Meeting the Challenge of Change Part II,

3 hrs. Ethics

22

Retirement Planning & Annuities, 2 hrs. L&H

22

Long-Term Care, 2 hrs. L&H

22

Shake, Rattle & Roll with It: Earthquake Basics, 1 hr. P&C

27

CISR Elements of Risk Management, Myrtle Beach, 7 hrs. P&C

South Carolina Agent & Broker • Fall 2015

27

Home-Based Business Exposures, 2 hr. P&C

28

Commercial Lines Q&A, Columbia, 6 hrs. P&C

29

Policy Provision Potpourri, 2 hrs. P&C

November 03

Lenders Gone Wild, 1 hr. P&C

4-5

Commercial Lines Nuts & Bolts, Charleston, 12 hrs. P&C

4-6

CIC Personal Lines Institute, Hilton Head, 20 hrs. P&C

05

Building Codes are Bad for your Insureds, 2 hrs. P&C

05

COPE: Property Underwriting and Effective Loss Control, 2 hrs. P&C

09

Data Privacy Insurance, 2 hrs. P&C

09

Hot Topics in Personal Lines, 2 hrs. P&C

09

Surplus Lines License Review Course, 3 hrs. P&C

10

Directors and Officers Liability Insurance, 2 hrs. P&C

10

E&O Risk Management – Meeting the Challenge of Change Part I,

3 hrs. P&C

10

E&O Risk Management – Meeting the Challenge of Change Part II,

3 hrs. Ethics

10

Shake, Rattle & Roll with It: Earthquake Basics, 1 hr. P&C

11

Estate Planning Techniques: Gifts, Trusts and Life Insurance, 2 hrs. L&H

12

Business Auto Claims that Cause Problems, 2 hrs. P&C

12

Certificates of Insurance, 3 hrs. P&C

13

Professional Ethics in the Insurance Industry, 3 hrs. Ethics

17

AIAM Day 2, Columbia, 6 hrs. P&C

17

Commercial Property Endorsements that Can Make You Money,

2 hr. P&C

17

Insurance & BBQ, the Hidden Connection, 3 hrs. P&C

17

Affordable Care Act, Update 2015 & Beyond, 3 hrs. L&H

18

CISR Personal Residential, Florence, 7 hrs. P&C

18

CISR Commercial Property, Charleston, 7 hrs. P&C

18

IIABSC Executive Leadership Program Day 4, Columbia

18

NFIP Basic Course w/ 2014 Updates, 3 hrs. P&C

18

Top 5 Life Insurance Uses, 2 hrs. L&H

19

Personal Lines Claims that Cause Problems, 2 hrs. P&C

19

E&O Risk Management – Meeting the Challenge of Change Part I,

3 hrs. P&C

19

E&O Risk Management – Meeting the Challenge of Change Part II,

3 hrs. Ethics

19

Agency Management Based E&O and Ethics,

3 hrs. Ethics

23

Rental Cars, More than Meets the Eye,

2 hrs. P&C

December 03

Lenders Gone Wild, 1 hr. P&C

07

Professional Ethics in the Insurance Industry,

3 hrs. Ethics

08

Data Privacy Insurance, 2 hrs. P&C

08

Hot Topics in Personal Lines, 2 hrs. P&C

08

Commercial Lines Claims that Cause Problems,

hrs. P&C

08

E&O Risk Management – Meeting the

Challenge of Change Part I, 3 hrs. P&C

08

E&O Risk Management – Meeting the

Challenge of Change Part II, 3 hrs. Ethics

08

Shake, Rattle & Roll with It: Earthquake Basics,

1 hr. P&C

08

CISR Agency Operations, Greenville, 6 hrs.

P&C or L&H, 1 hr. Ethics

09

CISR Commercial Property, Columbia,

7 hrs. P&C

10

Business Income, Beyond the Basics,

3 hrs. P&C

10

Certificates of Insurance, 3 hrs. P&C

10

Home-Based Business Exposures, 2 hrs. P&C

10

Workers Comp, Beyond the Basics, 3 hrs. P&C

14

Surplus Lines License Review Course,

3 hrs. P&C

15

Those Kids and Their Cars, 2 hrs. P&C

15

Insurance & BBQ, the Hidden Connection,

3 hrs. P&C

15

Affordable Care Act, Update 2015 & Beyond,

3 hrs. L&H

16

Directors and Officers Liability Insurance,

2 hrs. P&C

16

NFIP Basic Course w/ 2014 Updates, 3 hr. P&C

17

E&O Mock Trial, 2 hrs. P&C

17

Long-Term Care, 2 hrs. L&H

17

Shake, Rattle & Roll with It: Earthquake Basics,

1 hr. P&C

17

Insurance and the Property Lease, 2 hrs. P&C

17

Liability Issues: Indemnity Agreements &

Additional Insureds, 2 hrs. P&C

17

E&O Risk Management – Meeting the

Challenge of Change Part I, 3 hrs. P&C

17

E&O Risk Management – Meeting the

Challenge of Change Part II, 3 hrs. Ethics

17

Policy Provision Potpourri, 2 hrs. P&C

22

Retirement Planning & Annuities, 2 hrs. L&H

29

Rental Cars, More than Meets the Eye, 2

hrs. P&C

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Fall 2015 • South Carolina Agent &2/20/15 Broker 43 9:21 AM

Member News

WELCOME NEW AGENCY MEMBERS

CT LOWNDES SERTOMA CLASSIC

Crosswinds Insurance Agency, Ft. Mill Cummings Insurance Agency, Aiken Diamond D Insurance Agency, Ft. Mill FCI Agency, Greenville Hilton Head Insurance & Brokerage, Hilton Head Palmetto Choice Insurance Agency, Spartanburg

WELCOME NEW ASSOCIATE MEMBERS Patriot National, Inc., Ft. Lauderdale

TWO UPSTATE MEMBER AGENCIES NAMED BEST PLACES TO WORK IN SC Agency members Turner Agency Insurance and Rosenfeld Einstein have been named among the Best Places to Work in South Carolina by the SC Chamber of Commerce and SC Biz News publications. Nominees are surveyed by independent research company Best Companies Group in a two-part process consisting of questionnaires and employee surveys.

Henry Lowndes, Jr. (far left) and Bill Silcox (far right) represent C.T. Lowndes in their sponsorship of the Sertoma High School Football Classic.

They are pictured with the Friday-night cheerleader football toss winners, James Island High School.

Charleston-area agency member C. T. Lowndes & Company was a fifth-year title sponsor of the Sertoma High School Football Classic, the annual kick-off to the Charleston local high school football season, held Aug. 13-14.

This year’s event included four eight-man high school teams and four teams from the North Charleston Powder Puff Football League. Thanks to donations from business partners, the agency was able to give away $3,550 to high school cheerleader teams with the winner receiving $1,000.

All funds raised by the Sertoma Club are donated to local charities helping young people in the community.

SCHB-SIF SCHOLARSHIP RECIPIENTS Workers’ compensation insurer and corporate associate member South Carolina Home Builders Self Insurers Fund awarded five $1,000 scholarships to South Carolina high school graduates as part of their 2015 College Scholarship Program for the dependents of SCHB-SIF policyholders and their employees. An independent panel of judges evaluated each student’s commitment to educational excellence, community service and extracurricular activities to select the following scholarship recipients: • Andrew C. Epting of West Columbia (Clemson University) • Andrew C. Murray of Summerville (University of SC) SC Home Builder Self Insurers Fund 2015 Scholarship recipients • Danielle D. Halajcsik of Summerville (College of Charleston) were honored at the scholarship banquet held July 15, 2015 at • Danielle R. Mahan of Fair Play (North Greenville University) the Palmetto Club in Columbia, SC. In attendence were (L to R): • Hannah E. Reynolds of Bluffton (College of Charleston) Danielle R. Mahan, Andrew C. Epting and Danielle D. Halajcsik.

44

South Carolina Agent & Broker • Fall 2015

Thank you,

Palmetto Partners The Palmetto Partners program is a simplified way for companies, brokers and vendors to support us and all our big events on an ongoing basis.

Diamond Level Johnson & Johnson Progressive Insurance Safeco Insurance UPC Insurance Co. IIABSC Agency

Silver Level

Platinum Level

Liberty Mutual Insurance

Gold Level

Cornerstone National Insurance Co. Jackson Sumner & Associates Phenix Mutual Fire Insurance Co. St. Johns Insurance Company

Bronze Level

AFCO/Prime Rate Premium Finance American Strategic Insurance Frontline Insurance Imperial PFS Main Street America Group Markel Specialty National Security Fire & Casualty Co. Preferred Specialty, LLC Prime Insurance Co. RPS SCU Southern Ins. Underwriters Travelers Wright Flood

Access Insurance Co. Accident Fund Ins. Co. of America Allstate Insurance Amerisafe Auto-Owners Insurance Co. Bankers Insurance Group Berkley Southeast Insurance Group Capitol Preferred Insurance Co. & Southern Fidelity Centauri Specialty Insurance Co. Central Insurance Co. Genesee General Hanover Excess & Surplus

The Hartford Insurance House J.M. Wilson Lighthouse Property Insurance Corp.

Mid-Continent Group Penn National Insurance Risk Innovations, LLC State Auto Insurance Co. Stonewood Insurance Underwriters Tapco Underwriters Universal North America

Fall 2015 • South Carolina Agent & Broker

45

2015 Board of Directors

Executive Committee

Directors

Chairman Kenneth A. “Ken” Finch, CPCU, CIC, CRM, AAI Adams Eaddy & Associates kfinch@adamseaddy.com

National Director Jules Anderson, AAI Anderson Insurance Associates Charleston, SC janderson@aiasc.com

Angus M. Brabham, IV, CIC (Gus) Regions Insurance Columbia, SC gus.brabham@regions.com

Chairman Elect/ Treasurer R. Scott Moseley Irmo Insurance Agency Irmo, SC scott@irmoins.com

Immediate Past Chairman Ashley Brady, CIC First Charter Co., Inc Marion, SC abrady@firstcharterins.com

Secretary Tom Bates, Jr. Herlong Bates Burnett Greenville, SC tom@hbbins.com

Stephen B. Cannon, PhD, CPCU (Steve) Law Insurance Agency, Inc Spartanburg, SC scannon4@juno.com Harrison G. Cline, CIC, AIP The Furman Co. Insurance Agency Greenville, SC hcline@furmanco.com James B. Galloway (Ben) Peoples First Insurance Rock Hill, SC bengalloway@peoplesfirstinsurance.com Dana D. Groome, CIC, CPCU, CISR, ACSR Peoples Underwriters Inc. Conway, SC danag@peoplesunderwriters.com

Andrew E. Muller, CIC, AAI, CWCC, PRIS Mappus Insurance Agency Inc. Charleston, SC andrew@mappusinsurance.com James G. Taylor, Jr., CIC (Jay) Kinghorn Ins Agency of Beaufort Beaufort, SC jtaylor@insurancebeaufort.com Tonya S. Thomason, CIC David A. Crotts & Associates Greenwood, SC tonya.thomason@dcrotts.com Teresa C. Yount, CPCU, CIC, CRM, AINS, CPIW Correll Insurance Group Spartanburg, SC tyount@correllinsurance.com

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46

South Carolina Agent & Broker • Fall 2015

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