Big I Washington, Summer 2016

SUMMER 2016

Big I Washington is a publication of the Independent Insurance Agents & Brokers of Washington

▼ ▼

Sen. Maria Cantwell

Rep. Suzan DelBene

▼ Rep. Derek Kilmer ▼ Rep. Dan Newhouse

IIABW LOBBIES CONGRESS

▼ Rep. Denny Heck

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Official publication of Independent Insurance Agents & Brokers of Washington 11911 NE 1st St., Suite B103, Bellevue, WA 98005 Ph. (425) 649-0102 Fax: (425) 649-8573 Web: www.wainsurance.org Officers of IIABW President: Kim Krogh, ARM, Hub International Northwest, Spokane President-elect: Lori Reed, Mitchell Reed & Schmitten Insurance, Inc., Wenatchee Secretary:Rob Tripple, Tripple Tripple & Tripple, Edmonds Treasurer: Dave Merrill, Merrill & Merrill, Seattle IIABA Director: Sue Knobeloch, CIC, CPIW, Association of Risk Managers NW, Tacoma Executive VP: Daniel Holst, IIABW, Bellevue Board of Directors Mike Button, (Past President), PayneWest, Richland Craig Field (Chelan/Douglas), Mitchell Reed & Schmitten Insurance, Inc., Wenatchee Duane Henson, LUTCF (Skagit/Island), WAFD Insurance Group, Mt. Vernon Mary Lemon (Spokane), Hub International Northwest, Spokane Amberlyn McQuary Buratto, CIC (At Large), Stonebraker McQuary, Spokane Dave Merrill (At Large), Merrill & Merrill Insurance, Seattle Melissa Power, ACSR, CIC (At Large), Homestreet Insurance, Spokane Nick Stay (Pierce) American Underwriters Insurance, Tacoma Dave Street (Grant), Martin-Morris Agency, Wenatchee Rob Tripple (Snohomish), Tripple Tripple & Tripple, Edmonds Carissa Veltri (Benton-Franklin), Conover, Tri Cities

Advertiser Index Anchor Bay Insurance Managers

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Staff Daniel Holst, Executive V.P. - dholst@wainsurance.org Susan Scott, AAI, Sr. V.P. of Education - sscott@wainsurance.org Ashley Kuaea, Director of Member Programs - akuaea@wainsurance.org Kathy Gardner, Administrative Assistant - kgardner@wainsurance.org Bill Stauffacher, Stauffacher Communications, Contract Lobbyist - gocougs@billstauffacher.com Big I Washington is the official magazine of the Independent Insurance Agents & Brokers of Washington and is published quarterly. News items from IIABW members are requested. IIABW does not necessarily endorse any of the companies advertising in this publication or the views of its writers.

IIABW reserves the right in its sole discretion to reject advertising that does not meet IIABW qualifications or which may detract from its business, professional or ethical standards.

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

SUMMER 2016

The publisher cannot assume responsibility for claims made by advertisers, content provided by the editor, or for the opinions expressed by contributing authors.

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Table of Contents 6

A Message from Kim Krogh, IIABW President

22 The “Primary and Noncontributory” Myth

8

IIABW Lobbies Congress

26 Retirement Plans: Are You Aware of Your Fiduciary

10 Agency E&O Considerations When Using Social Media 13 2016 IIABW Conferences

28 Flood News: NFIP Program Changes

14 Insuring Homes Owned by LLCs

29 IIABW Associate Members

16 Why Many Producers Fail

30 Personal Umbrella Policy - A Smart Source of

20 Young Agents Conference: June 9-10, 2016 4

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IIABW President

KIM KROGH

A

s your President-Elect and now as President, I

Our state has two Senators and ten House of

have been privileged to represent our association

Representatives so it gets tricky to meet with all of them in a

at the National Legislative Conference in Wash-

day and Dan does a great job setting up meetings with as many

ington DC. It has been an amazing experience

as possible. This year we meet with eight of our congressional

each year. If there is one thing I can advise a Big I member it

members. It is an amazing experience to go behind the doors

is to find a way to attend this event at least once in your career.

into the inner sanctums of our representatives. You see a big

I know many members that have gone multiple times and I am

difference in the House and Senate offices; in the House, they

sure they will tell you it is a valuable opportunity.

represent their local area of the State and their offices reflect

Going to the National Legislative Conference is not only

that with pictures and mementos from home. The Senate is

about a trip to Washington D.C. but you get to meet with your

state-wide so their offices reflect how amazing our great State

representatives in their office on their ground. Learning how

is as a whole.

our nation’s Capitol works is an invaluable opportunity this

For your employees that might stress or get frustrated

conference provides. This experience not only applies to us as

with their small cubical or office space, have them talk to a

Independent Agents but to other community organizations we

Congressional staff about personal space. They are sitting on

might be involved with.

top of each other; it was not surprising to find four people in

So what happens at the conference?

the space about the size of a small bathroom.

The first day (Wednesday) is an afternoon issues briefing

On Thursday night our state’s agents go out to dinner

to give us an overview of the topics we will be discussing

to discuss our day’s experience. The evening is closed by a

with our legislators. Our national association does a great

National Young Agents Auction and Event – yes, this event

job providing us with note cards with the key talking points.

starts at 9pm. You would not believe how many young agents

After the briefing there is an opening reception where you can

attend this event and the money they raise to send agents the

talk with your fellow agents across the country to see what is

next year from the auction, thanks to us older, more long in the

happening in their states.

tooth agents.

Thursday is on the “Hill Day” – this day opens with a

Friday rolls around faster than you would think and there

breakfast and keynote speaker to rally us for our visits. This

is a wrap-up breakfast. This year two well-known political

year the speaker was Sen. Chuck Schumer, who will be the

commentators (Mark Shields & Tucker Carlson) explained

most senior democrat in the U.S. Senate next year. In past

how they think the results are going to come in regarding the

years we have had the last four sitting Presidents speak to our

upcoming political party conventions. It was a great debate

group. Next we are off to the “Hill” and if any of you know

and discussion. As a novice political person, I had never

Dan Holst this means walking and more walking. I am not sure

considered many of the options they shared. I am anxious to

what city he grew up in but a city block is nothing like a city

see if their predictions happen.

block in Dan’s world. We put on over a 10,000 steps on this day in about 6 hours. This time we were lucky to have most of

recommendation for you to attend this annual event. Many of

the meetings grouped by the building so we only had to change

the states have large delegations attending this Conference and

buildings a few times. (The underground tunnels in DC are

I highly recommend that you put this on your calendar for next

something one has to experience – there is a whole city below

year.

the U.S. Capitol complex).

6

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7

IIABW Lobbies Congress

I

IABW members attended the Big

cuts, which the Big “I” opposes. We shared our

“I” national legislative conference in

association’s opposition to S. 2244 and H.R. 3973,

Washington D.C. last month and lobbied

which would result in cuts to agent commissions

on behalf of independent agents. We met

and would discourage farmers from purchasing

personally with Senator Maria Cantwell

adequate coverage for their farmland.

and Reps. Derek Kilmer, Denny Heck, Dan Newhouse and Suzan DelBene. We also met with

Health Care

staff from the offices of Senator Patty Murray and

The Affordable Care Act’s “Cadillac tax” assesses

Reps. Cathy McMorris Rodgers and Dave Reichert.

a damaging 40% tax on health plans that exceed a

IIABW’s delegation included: Kim Krogh,

fixed annual cost. At the end of 2015, with Big “I”

IIABW President with Hub International, Lori

support, a two-year delay of the “Cadillac tax” was

Reed, IIABW President elect with Mitchell Reed

enacted to move the effective date of the tax from

& Schmitten, Sue Knobeloch, IIABW’s national

2018 to 2020. The Big “I” continues to push for a

board member with Association of Risk Managers,

full repeal of the middle-class tax. We also shared

Anthony Gomes with Vertafore, and Daniel Holst

our association’s supports for excluding agent com-

with IIABW.

pensation from the Medical Loss Ratio formula in the Affordable Care Act. This encourages insurance

WE DISCUSSED THE FOLLOWING ISSUES

companies to cut or eliminate agent commission and takes agents out of the delivery of health insur-

Flood Insurance

ance (H.R. 815 and S. 1661).

The Big “I” strongly supports a reformed and mod-

8

ernized National Flood Insurance Program (NFIP)

Insurance Regulatory Reform

and asked our representatives to extend the NFIP

We shared our association’s strong support for the

prior to its September 30, 2017 expiration. We

state regulation of insurance and our concern with

advocated for risk-based rates, updated mapping,

federal encroachment into insurance regulation. As

increased use of private reinsurance, and additional

a result, we told our Congressional delegation about

mitigation. We also shared our support for allow-

our support of H.R. 2141 and S. 1086, which would

ing the private market to offer flood insurance as a

create procedural “checks” for federal officials in

complement to the NFIP (S. 1679 and H.R. 2901).

international insurance negotiations to ensure that

The legislation enables a private insurance policy to

our state-based system of regulation remains strong.

satisfy the NFIP mandatory purchase requirement,

The Big “I” also strongly supports the creation

and grants state regulators the ability to determine

of the National Association of Registered Agents

what is “acceptable” private flood insurance. This

and Brokers, which will make it easier for agents

would enable customers to move smoothly between

to get licensed in multiple states once it has been

the private market and the NFIP without penalty.

implemented.

Crop Insurance

Department of Labor (DOL) Regulations

The Federal Crop Insurance Program (FCIP) is the

The Big “I” is concerned with new DOL overtime

cornerstone of the farm safety net and is crucial to

requirements for “white collar” workers under the

the economic security of rural America. Despite

Fair Labor Standards Act that will be overly bur-

the success of this public-private partnership, the

densome for small businesses and supports S. 2707

program continues to be in the bullseye for budget

and H.R. 4773 which would halt the proposal.

BURNS &

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Agency

E&O CONSIDERATIONS When Using SOCIAL MEDIA

By Sabrena Sally, CPCU

N

ot a day goes by without my email containing an invitation to join a social networking site.

Whether used for business contacts, maintaining contact with friends and family, or to reconnect with acquaintances from years past, the use of social networking sites is rapidly increasing.

According to one internet research firm, 2008 saw the use of social networking sites overtake email by Internet users across the world.

Much discussion has taken place on how to best harness the power of social networking for the benefit of your insurance agency. ACT and other organizations have written extensively on the power of social media to enhance agency online marketing and to generate “virtual” referrals. The focus of this article, however, is to examine the risks that agencies need to take into account when they take advantage of these opportunities to broaden their reach. I will examine the more common errors and omissions risks that can be associated with the use of social networking, along with steps you can take to mitigate those risks.

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If you are not familiar with social networking sites, here is a brief discussion of the most common functionalities.

This is by no means all-inclusive, as the technology changes daily. Most sites offer the ability to create a homepage following a template provided by the site. Depending on the site being accessed, the profile template may be limited to key information you wish to be known about your agency along with an uploaded photo, or it can be as robust as a site containing multiple photos, videos, and links to other sections of the site (as well as to other sites) containing additional content you have created and posted. Users of the site typically invite other users to join their community, and the invitee is free to accept or decline. Most sites also offer blogs, chat rooms, forums, and search capabilities to help locate other users based on your chosen search filters.

RULES OF THE SITE Posted privacy statements and user agreements are standard on social networking sites, and most also include a list of “do’s and don’ts” to follow when using the site. Although containing lengthy legal terminology, it is in your best interest to fully read a site’s user agreements and privacy statements before agreeing to the terms of usage. User agreements tend to be very broad in favor of the site owner, commonly giving the rights to the site to use all content posted by users, and retaining the right to remove, discard or withhold user posted information at any time. User agreements usually state that the site assumes no responsibility to monitor disputes between users, and contain hold harmless/indemnification agreements in favor of the site for damages suffered by the site as a result of content posted by a user or as a result of any actions of the user while using or misusing the site.

Now, let’s assume you have read the user agreements, privacy statements, and “do’s and don’ts” of a site you have chosen to use. You are ready to sign up. But wait! Don’t hit that submit button too quickly. Instead, take some time to consider what type of errors and omissions exposures your agency may face by using the site.

OVERVIEW OF E&O EXPOSURES The exposures can range from advertising, contractual liability, defamation, offering erroneous recommendations, and may even extend to antitrust issues. These are not new exposures to your agency, but the nature of social networking sites does impact errors and omissions exposures in several ways. Information entered on social networking sites is able to achieve instantaneous worldwide distribution in a matter of seconds. An electronic record is also created which can survive indefinitely. In addition, discussions taking place on these sites tend to be more casual and take place more quickly then even email communication, making it easier for a statement to be

taken out of context. Let’s drill down to the most common errors and omissions exposures faced by agencies using social media.

CONTRACTUAL LIABILITY The user agreement on the site most likely contains a requirement that you hold harmless and indemnify the site. The agreement at one popular site is quite broad, stating: “....you shall indemnify and hold us harmless from any damages, losses and costs related to third party claims, charges or investigations, caused by your failure to comply with this agreement, including without limitation your submission of content that violates third party rights or applicable laws, caused by any content you submit to us, or caused by any activity in which you engage through the site.”

That provision in itself is amazingly broad, but it becomes even more so when you look at the definition of the site agreement.

The site agreement in this particular case states that you must comply with all applicable laws, the “Do’s and Don’ts” posted on the site, the notice and take-down procedures of the site, the site privacy policy, and any other notices of the site.

Loss Control Tip: • Read the user agreement, privacy statement, and “do’s and don’ts” thoroughly. Consult with your legal counsel if needed to be sure you have a full understanding of the liabilities to which your agency is agreeing.

ADVERTISING LIABILITY You most likely will create some type of agency home page, so let’s look next at advertising exposures. The insurance regulations in several states specifically mention Internet advertising. For example, this excerpt from NY L Circular: Letter No. 5 (2001) is both specific to Internet advertising and broad in scope: “Advertisements that appear on the Internet are subject to all applicable existing statutory and regulatory guidelines and restrictions applicable to advertisements in any other medium.”

It is clear that the same level of care should be given to agency advertising on social networking sites as is given to the agency’s traditional advertising. Where the line can easily be blurred, however, is when an individual agency owner or employee uses the agency name, logo, or other advertising identifier as part of their personal social networking site. Does that then constitute advertising for which the agency can be held liable? That question has yet to be settled. The agency’s exposures from advertising on these sites can be mitigated 11

by following the same legal vetting process as is used for traditional advertising. An agency procedure should also be established that addresses to what extent employees have permission to link to the agency’s sites, or use the agency name, logo, or other advertising material on their personal sites (more on this procedure later).

Loss Control Tips: • Be sure your agency advertising on the site complies with all statutory and regulatory guidelines.

• Establish an agency procedure addressing employee linking to agency sites or use of agency name, logo, or other advertising on their personal social networking sites.

DEFAMATION Most social networking sites feature blogs, chats or forum discussions. Participating in these discussions can present exposure to defamation, or in this case libel since the discussion is in written form. Your agency has always faced exposure to defamation from verbal discussions and written communications. On social networking sites, however, discussions taking place on blogs and in chat rooms or forums tend to be less formal, may include more opinion than fact, and tend to move quite rapidly between many parties. In fact, the popular site Twitter limits text comments to no more than 140 characters. The end result is that it is much easier to make a statement that is taken out of context.

Unlike verbal discussions, comments made on the interactive features of social networking sites or in blogs that accompany online articles are captured electronically and can be stored indefinitely, further exacerbating the issue of less formality.

Keeping in mind that commercial speech – speech which proposes an economic transaction – is entitled only to limited First Amendment constitutional protection, there is a real question as to the level of First Amendment protection business representatives will receive when they write or respond to a blog. The answer is not yet clear. As this area continues to develop, you would be well served to consult with legal counsel experienced in First Amendment law for guidance on creating the agency’s policy regarding the content you will permit on blogs on your agency’s behalf.

Loss Control Tip: • Consult with qualified legal counsel for guidance on the agency’s policy on blogging.

PRIVACY ISSUES Closely tied to defamation is public disclosure of private facts, which occurs when someone reveals information that is not of public concern, and the disclosure of the information would 12

be offensive to a reasonable person. The interactive spaces on social networking sites are not secure spaces for discussing personally identifiable information.

AGENCY PROCEDURES FOR SOCIAL WEB USE Agency procedures for social networking should require employees to keep their discussions professional and they should distinguish between statements of fact versus those of opinion. Comments that can be construed as leading or participating in attacks on either individuals or businesses should be avoided.

Employees should limit their focus to a generalized discussion of an insurance topic. When a discussion becomes specific as to an identifiable risk or individual, it is no longer appropriate for an interactive space, and should be moved offline. Once moved offline, a discussion specific to an identifiable risk or individual should then move into the agency’s established workflow process. This provides the standard servicing and documentation that would occur had this discussion taken place in person, via phone or within email.

Loss Control Tip: • Establish written agency procedures addressing employee use of social networking sites, including: • Who within the agency has permission to participate on behalf of the agency • Define acceptable behavior (professional, fact versus opinion, no leading or participating in attacks on individuals or businesses) • Employee sites should make clear they reflect their own views and not those of the agency • Identify when a discussion should be moved offline and into agency workflow • the consequences of non-compliance.

INCORRECT ADVICE Agencies face exposure every day when rendering or failing to render professional services. Operating in the virtual world of the social web is no exception. Whether it is the advertising of agency services provided as part of the agency home page or comments made in a chat area discussion, the standard of care in providing professional services is no less than what exists in more traditional venues.

The standard disclaimers used on your agency’s voice mail, email, and website also should be used on social networking sites. The same agency procedures your staff follows regarding risk analysis, recommendations, and documentation also apply to all content and discussions on social networking sites. As mentioned above, the interactive features of social networks do provide unique challenges. The written procedures your agency establishes to address social networking will not only

guide agency staff behavior while using these sites, but will also help protect your agency against allegations of errors and omissions.

Loss Control Tips: • Use standard disclaimers such as those used in voice mail, email, and on website • Be clear in the agency’s procedures that established processes and workflows apply to all discussions and service focused on an identifiable risk or individual or business generated through the social network site.

Armed with an awareness of the main errors and omissions exposures that can arise from use of social networking sites, you are almost ready to take advantage of the opportunities presented while still protecting your agency against unexpected exposures. But before getting started, give careful thought to what your goals are in using these tools.

Do you plan to use sites such as Facebook or LinkedIn more as another venue in which to advertise your agency? Or, are you considering jumping in with both feet and actively participating in or running an interactive discussion to generate new “fans” who can become prospects?

Once you have decided on your goals, consult with qualified legal counsel. By following the advice of qualified counsel that is specific to your planned use of these sites, and applying the loss control tips I just discussed, you will be ready to enjoy all the benefits of social networking with the peace of mind of knowing you have taken steps to mitigate the risks.

This article is intended only for educational or illustrative purposes and should not be construed to communicate legal or professional advice. You should consult legal or other professionals with respect to any specific questions you may have. Further, the statements and/ or opinions contained are those only of the author and do not constitute and should not be construed to constitute any statement, opinion or position of Swiss Re. Sabrena Sally, CPCU is Senior Vice President of Westport Insurance Corporation, a Swiss Re company, who manages the Big “I” Agency Professional Liability Program. Sabrena can be reached at sabrena_sally@swissre.com. Sabrena produced this article for the Agents Council for Technology (ACT), a part of the Independent Insurance Agents & Brokers of America. For more information about ACT, visit www. independentagent.com/act. This article reflects the views of the author and should not be construed as an official statement by ACT.

IIABW’S 2016 CONFERENCES

IIABW/PIA Joint Conference

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60+ Booth Tradeshow Scramble golf tournament Texas Holdem poker tournament CE seminars

Young Agents Conference

June 9-10, 2016 Clearwater Casino Resort, near Poulsbo

(all invited – those new to industry and ‘young at heart’)

• Earn IO CES • Networking at 2 evening events • Golf at Whitehorse Golf Club 13

Insuring Homes Owned by LLCs An insured’s accountant set up an LLC transferring ownership of his home to his three children as LLC members who now rent the home under a triple net lease to the insured requiring him to insure it. The insured currently has an HO policy in his name. IS THERE A PROBLEM?

By IIABA’s Virtual University Faculty

QUESTION: ”I’ve had a couple of situations this year where clients have placed the ownership of their seasonal/secondary residences in the name of a Limited Liability Corp., with family as members of the LLC. I’m concerned as to how to properly insure these. In one case I have a Homeowners policy with the LLC listed as the named insured and the other case it is covered under a BOP (AAIS form) and is being rated as apartment. I’m trying to figure out what potential gaps I’m leaving open.”

QUESTION: ”We have an insured who had a homeowners policy with us and his accountant has set up a triple net lease with his children under an LLC (3 members, the insured not being one of them). The insured will be living in the home as long as he wants to. At the time, we were unaware of the situation being a triple net lease and advised the insured that his children would have to take out a dwelling fire policy and he would have to rewrite to a contents policy. The accountant was upset with us because we did this and explained that it is a triple net lease. Should we rewrite it back to a homeowners policy? Can you extend liability to an LLC? Thanks for any help.”

14

?

ANSWER: We have written a number of articles related to this issue. The bottom line is that the HO program simply is not designed to insure properties owned by corporations and LLCs. If the accountant wants someone to be upset with, s/he should look inward...the insurance implications and costs should have been considered as part of the rationale for making this change. Below are some comments from our faculty and references to related articles.

FACULTY RESPONSE: I’m aware of a major carrier denying coverage following a total fire loss to a nice home. The building had been titled in the name of a corporation. Explain the terms of the Named Insured provisions, insurable interest, owner/ occupancy, and references to “family” under the various policies. Sell the policy that addresses the interest of the owner as respects both building and contents and liability exposures. Don’t give an inch. You may want to resign from the account. Let someone else fight the inevitable lawsuit.

FACULTY RESPONSE: Both the resident and the LLC and its members have a full insurable interest. Name them as insureds on the appropriate policy.

FACULTY RESPONSE: The LLC owns the property, not the resident. Therefore, under the owner/occupant eligibility requirement (if we’re talking ISO rules), the property is not eligible for an HO policy. If you could give the father even a dollar’s worth of ownership in the property, he could be technically eligible for an HO policy. Then you could add the HO 04 41 additional insured endorsement to give the LLC coverage for its insurable interest in the dwelling and its on-premises liability coverage. Absent that, you’re looking at a dwelling fire or commercial program.

Another way would have been to grant the father a life estate so he could get an HO policy and use the HO 04 41 as previously indicated. I’m guessing the accountant did this LLC/triple net lease thing for some sort of tax or financial reasons, so I don’t know whether the life estate approach would have the intended impact, but it sure would have solved the insurance dilemma.

Someone needs to let accountants and lawyers know about the insurance implications of their recommendations so faux pas like this don’t happen.

FACULTY RESPONSE: I have done several of these using three different regional and national carriers. For a multi-member LLC, I use a dwelling form DP-3, named insured the LLC, and liability included as for one family rented to others. Then the parents or children are issued a tenants form HO-4. Also for several life tenancy situation the carrier has agreed to write the HO with an additional insured for the foundation that paid for the property. I also have worked with family corporations and family offices in handling a multitude of compounded arrangements.

FACULTY RESPONSE: I’m not sure there’s much inherently wrong with using the Dwelling program other than the prolific mention of spouses and resident family members implies the form was not designed to insure an LLC or corporation. The liability coverages might be problematic in that there is a business exclusion that only excepts “partial” renting for use as a residence. I’d also be concerned about the potential liability of the LLC members and the lack of liability coverage unless they are named insureds.

Unlike the CGL, there is no automatic coverage for them and, even if legally protected, they’d still have to respond to a suit.

Typically the HO insurer will write the HO3 policy in the name of the individual husband and wife who occupy the home and then will add the LLC, trust or partnership as an insured by endorsement. Whether the carrier can or will do this is an underwriting decision. I have not seen them issue the HO3 in the name of the entity other than the individual husband and wife who occupy it. Companies marketing to high net worth individuals do this all the time.

The CPL form is not designed for entities other than individuals which is why LLC’s are not named insureds on HO3 policies. Ask your underwriters if they will name the individuals as named insureds and add the LLC as an additional insured by endorsement to protect its interest in that property.

FACULTY RESPONSE: This question comes up often. The problem with using personal lines products like an HO policy is that the terminology reflects the interests of individuals and families, not entities like LLCs and corporations. Lawyers and accountants all over the country set up these types of arrangements to shield assets or liabilities, or for tax advantages or to establish a trust, and often do so with complete disregard for the insurance implications.

For most insurers, LLCs and corporations are not eligible for their homeowners program. That leaves, at best, use of their dwelling fire program which is often used to insure rental properties or, if necessary, commercial products like a BOP. You’d have to compare individual dwelling vs. BOP forms to know which might be the best value.

You might find these VU articles helpful, including the last one which presents a potentially catastrophic exposure if an HO policy is written solely in the name of someone or some entity that does not reside there: • • •

In addition, one other potential problem with having an LLC as a named insured on an HO policy is the “where you reside” issue. Coverage A applies to the dwelling on the “residence premises.” The “residence premises” is defined to be the place “where you reside.” Since an LLC can’t “reside” anywhere, there is an argument that there is no Coverage A on the dwelling if “you” (the LLC) doesn’t reside there. There are a number of VU articles related to this issue...this one outlines a number of court cases that have taken this position: •

FACULTY RESPONSE: Many clients’ home are owned by a trust, partnership or LLC though occupied by that trustee, member or partner and his or her spouse. These entities are used for estate planning purposes and tax shelters.

“HO Policies Are NOT for Corporations” “Insuring Rental Dwellings” “Insuring Personal Trusts”

“Rent Your Home, Void Your Insurance Policy?”

This article is reprinted with permission by the Independent Insurance Agents & Brokers of American’s Virtual University. To subscribe to their free email newsletter, go to http://www.independentagent.com/ Education/VU/Pages/VU-point/VU-point.aspx.

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Why Many Producers Fail

By Brandie J. Hinen, Powerhouse Learning

F

or young or new agents, one of the most direct paths to success and increasing compensation is aggressive production. When you demonstrate that you can move the products and turn happy customers into delighted clients, you get noticed and you get opportunities. However, there are some pitfalls that the best producers have learned to avoid.

After working with hundreds of producers, managers, service staff and carrier teams alike, I’ve identified eleven common reasons many producers don’t make it in the industry.

1. NOT HAVING ENOUGH TO WORK ON. Even if you’re great at qualifying, learning to listen and asking the right questions, not having enough of “X” types or sizes to work on will ensure steady decline in your numbers and your selfesteem. You’d be amazed at the producers I find that have fewer than 50 prospects to work on for the year; for most that is a recipe for failure.

2. NOT MAKING A REQUEST. Whether it’s in prospecting energy or the energy to get off the couch and ask your agency principal, your account manager (CSR/CSA), your underwriters, or anyone else for help, producers who aren’t pests at asking often will find themselves disappointed at the lack of attention. People aren’t mind readers – make a request.

3. AGENCY LEADERS AREN’T REALLY ACTING LIKE LEADERS. Our industry is a “deep end of the pool” type of industry. We have a “Throw ‘em in. If they paddle, they’ll make it” kind of philosophy. Think about it, would you really do that to someone close to you, like a family member? In most cases, the answer is no. The sad part is that a little more pain in training NOW will likely pay off BIG later. Short term pain in getting them trained right will help them feel better about their efforts, and will help managers feel more settled in knowing the signs if they don’t have the stuff to make it.

Many managers wait way too long to let someone go because they feel guilty about not offering enough training up front.

Save the time, the disappointment, the money and the blame.

Care enough to invest in training and coaching your producers to succeed.

4. AGENCIES DON’T USE THE RESOURCES THEY ALREADY HAVE AVAILABLE. You have staff that are more knowledgeable in key areas than even your seasoned producers. Let your team help bring producers along instead of hoping they pick it up by osmosis or in next year’s CE class. Carrier relationships, how to deal with difficult customers, great client service and coverage knowledge - don’t underestimate the education and experience of your service team.

5. REFERRAL SOURCES AT YOUR FINGERTIPS GO UNTAPPED. I teach producers how to work referrals right from the beginning.

How? New producers have great referral advocates in the existing house accounts that most agencies have on auto-pilot. New producers working a new niche program can go out with their cold call prospect list to those existing loyal insureds and ask, “I’m going to call on these accounts anyway…would you be willing to just take a look at my list and let me know 16

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if there’s anyone here you could tell me about?” Referrals have the lowest acquisition cost, and the highest hit ratios of anything you can be doing today.

6. NOT LEARNING THE PEOPLE SIDE OF THE BUSINESS. Do you remember the good ol’ days of learning?

You know, the incessant desire we once had in the 80’s and early 90’s for identifying and overcoming weaknesses and becoming a better professional, and in fact a better human being? Hopkins, Ziglar, Nightingale? Then came Covey, Collins and Drucker. Motivational speakers were at an alltime high. And so were the follow up cassette tapes and then CDs. It was a time for learning about people, the psychology of sales, and understanding more about the way people think, act and feel. I tell the agencies I coach, if you don’t think we’re in the psychology business, think again. We are in a service industry. We work with helping people, with strategy, positioning and adversity EVERY DAY. Isn’t it time to begin a culture of learning about the people side again?

7. HAVING SOMETHING TO BELIEVE IN. If you talk with me, you know one of my core principals is having a vision powerful enough to call me through the pain of transformation (change). I learned the power of vision (and the powerlessness of not having one) 15 years ago when I attended a momentous four-day workshop. The experience changed my life, and led me to empower others for having something to believe in. It’s no wonder that many producers, and agency owners feel lost, especially in this tough time. What do you believe in? Is it evident in the physical and material circumstances around you?

8. ALL TALK, NO ACTION. Ever catch yourself saying, “I’ve heard that before” or “I’ve seen that” or “We tried that, it didn’t work?” It’s easy to say “I’m busy” and complain about the lack of results. I hear a lot of wishful talking out there. It’s been going on for years in our industry. Producers and agency owners talk a lot about their intentions, and often leave it at that. Make promises, and have the character to demonstrate the promise through your actions (that’s commitment). Our society has lost the honor of our word. Be one of the ones to LISTEN to the words you say, how often you make promises, then DO what you say, and mean it. People will believe you the next time you talk.

9. NOT HAVING A PLAN to go with the dream. Dreams matter, and so does the paperwork to go with it! Goal setting can be an exhausting process; that’s why many of you have quit doing it. So stop trying so hard to get everything perfect and just put down your best guesses and go out there and live it. Be specific. Identify BY WHEN. Don’t tell me “in the next year” or “sometime in the 3rd Quarter”. Want to see progress, team?

Ask each other “What will be done, and by when?” Then celebrate when it gets done!

10. THEY DON’T MOVE. C’mon, you’re going to screw up anyway! What I mean is, even the best dreams are in your 18

head and the best plans are just on a piece of paper. Go out and LIVE. The rest is just a fantasy. Living your plan gets you honest real quick, and since we’re human, we’re going to make mistakes. Here’s an example: If you don’t have enough in your pipeline, you’ll know the very first week when you don’t see enough people. Can’t close any deals? Better get some coaching or mentoring on why people aren’t comfortable buying from you or your agency. Only the weak complain and stay stuck in blaming others. Get up; take a stand; move on.

And be honest enough to change.

11. THEY DON’T MOVE LONG ENOUGH. Most buyers are ready to buy after ten contacts and most of us quit at four says one recent study. Another gives the following: 80% of sales are made between at the fifth to twelfth contact. That’s a BIG variable. Here’s the point: don’t let your head trash get in the way. If you make a call, leave a message, stop by, send a letter and then follow up, YOU’RE JUST GETTING STARTED

Don’t get discouraged, get determined. Homework: Read the section on The Flywheel Effect in Jim Collins’ Good to Great. Stick at it; things will get better because you are getting better at persevering or getting honest about what you need to change to win.

Brandie Hinen is the CEO of Powerhouse Learning, a nationally recognized industry accountability partner that helps agencies and companies quickly implement changes they seek. 12:36 PM A&M Assoc Ad WA PRINT.pdf 1 10/20/15

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The

“Primary and Noncontributory”

Y

By Bill Wilson

our customer has entered into a construction contract that requires, among many other things, for you to show on a certificate of insurance that additional insured coverage is provided on a primary and noncontributory basis. This article explains why it is typically impossible for you to do this.

Your customer has signed a construction contract that requires the following to be added in the Description of Operations field on the ACORD 25 certificate of insurance you’re expected to issue yesterday so that your customer can get access to the job site (or get paid for work already completed): “ABC General Contractor, Inc., XYZ Architectural Firm, Inc., and PQRST Engineers, Inc. and their respective customers, directors, officers, employees, agents, subsidiaries, divisions, affiliates, and successors are named as Additional Insureds on a primary and non-contributory basis with respect to liability for bodily injury, property damage or personal and advertising injury caused in whole or in part by the acts or omissions of either you or the additional insureds to the extent required by the written contract.”

Aside from the name changes to protect the ridiculous, this statement was actually added to an issued certificate by an agency. This is not unusual...we see this kind of thing on a weekly, if not daily, basis. There are MANY problems with this statement, but this article focuses on just one of them... the “primary and noncontributory” comment. The following commentary outlines why this phrase should NEVER be placed on a certificate.

First, this is what the ACORD Forms Instruction Guide (FIG) says should go in the Description field: “As used here, records information necessary to identify the operations, locations and vehicles for which the certificate was issued.”

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Myth

What does “primary and noncontributory” have to do with the operations, locations and vehicles of the insured? Answer: Nothing. So this statement is not appropriate for this field in the certificate. The ACORD FIG has historically said that the certificate should not be used in the following situations: • To quote wording from a contract • To quote any wording which amends a policy unless the policy itself has been amended The “primary and noncontributory” wording is requested to be shown on the certificate because the contract requires it to be done that way. ACORD makes it clear that proper use of the certificate does not include quoting contract wording.

Also, unless coverage is actually provided by the policies on a “primary and noncontributory” basis, the certificate shouldn’t say so. For example, the “primary and noncontributory” statement on the certificate does not reference any specific policy. The certificate included information on the CGL, BAP, and workers compensation policies. We know, or should know, that auto coverage cannot be provided on a “primary and noncontributory” basis under ISO forms.

Commercial auto primacy is governed largely by ownership and ISO’s symboling system, along with various and diverse state laws. Saying that auto coverage is “primary and contributory” on a certificate quite likely does not accurately reflect the policy. As such, the certificate, on that one point, could be patently illegal in some states and in all states could be subject to allegations that it is a misrepresentation or a fraudulent insurance document, something that carriers severe penalties in all states.

Keep in mind that insurance policies govern primacy of coverage, not certificates or construction contracts, and any attempt by a certificate to purport to provide a policy right not actually afforded by the policy could be presumed to be an attempt to amend, extend or alter the policy. A majority of states

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now expressly prohibit this. If the certificate implies that it extends such a policy right, then it is in effect purporting to be a policy form which, I suspect, is illegal in all states whether they’ve opined on specific certificate issues or not. Either a policy grants “primary and noncontributory” coverage or it doesn’t, and the certificate should only reflect what the policy does provide.

With that said, let’s focus on the CGL coverage for which that statement “primary and noncontributory” is usually directed at. The ISO CGL policy governs primacy under the Other Insurance clause: 4. Other Insurance If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over: (2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement.

As we can see, condition 4.b.(2) says that the CGL policy is excess over any other primary insurance under which the named insured has been added as an additional insured by attachment of an endorsement. It sounds like this solves our problem, but it doesn’t. Why? First, keep in mind WHOSE policy we’re looking at. It’s the ADDITIONAL INSURED’s policy (assuming they have an ISO or equivalent form) that governs whether AI coverage is primary or excess, NOT your insured’s CGL policy. NONE of ISO’s 30 or so additional insured endorsements mention the phrase “primary and noncontributory.” ISO relies on the Other Insurance clause in the CGL to control primacy which, as we’ve just seen, lies within the AI’s policy, not your insured’s policy.

So, that being the case, how can YOU, the agent, say that your insured’s policy is extending additional insured status to the upstream party when it’s THEIR policy that controls primacy? The fact of the matter is that, when you’re using ISO forms, you can’t. At best, you’re guessing that the AI coverage you’re providing is primary. The only 24

way to know with absolute certainty is by reviewing BOTH general liability policies. Do you do that before placing the “primary and noncontributory” wording on a certificate?

Unlikely.

To make matters worse, you can’t even be certain that what appears to be the unambiguous intent of the policies really is. In the case of Travelers Lloyds Ins. Co. v. Pacific Employers Ins. Co., No. 07-20157 (5th Cir. April, 2010), a tenant insured by Pacific agreed to provide “primary and noncontributory” CGL coverage for the landlord insured by Travelers. Following a customer injury, Pacific refused to provide coverage on a primary basis. The landlord’s “almost ISO” policy said it provided excess coverage over any other “valid and collectible insurance available to you if you are added as an additional insured under any other policy.”

However, the tenant’s policy said it was excess over other insurance “unless that insurance is written specifically to apply in excess of the Limits shown in the Declarations.”

The court opined that this statement sounded like it was referring “specifically” to an umbrella or excess policy, not another CGL policy. So, there could possibly be no coverage or, at best, pro rata coverage. This demonstrates how important the very specific and unique wording of policies may be interpreted, making it difficult and highly inadvisable that broad wording like “primary and noncontributory” be used on a certificate of insurance, compliance checklist, warranty statement, or agent affidavit.

If a loss occurs that is uncovered or otherwise denied by the downstream party’s insurer, you can bet that the agent will be on the receiving end of the lawsuit.

Again, keep in mind that none of the ISO AI endorsements address “primary and noncontributory.”

However, a number of proprietary carrier AI endorsements do say they are primary or even “primary and noncontributory.” But, once again, you don’t know what the upstream party’s CGL policy says, so you can’t predict exactly how even this specific language might fit with the language in their CGL policy. Also, exactly what does “noncontributory” mean? I’ve never seen it defined in a contract. I’ve seen it defined a couple of times in a proprietary insurer AI endorsement, but that seems rare. If we don’t know with certainty what this term means, how can we say coverage is “noncontributory” without a meeting of the minds on the meaning of the term.

Here’s another issue...notice that, under the Other Insurance clause, the upstream party’s CGL policy is excess over the downstream party’s CGL policy only if “you have been added as an additional insured by attachment of an endorsement.” Some carriers are now extending AI status on a blanket basis within their proprietary CGL policy, not by the attachment of an endorsement. For example, consider this excerpt from one insurer’s liability policy:

Additional Insureds When Required By Written Contract or Agreement The person(s) or organization(s) described below are additional insureds when you have agreed, in a written contract or agreement, that such person or organization be added as an additional insured on your policy.

Because AI status is provided within the downstream party’s CGL policy and not by endorsement, a literal reading of the AI’s CGL policy now implies that it is NOT excess coverage, which means that it is either primary or provided on a pro rata basis. This may seem like a mincing of words beyond the intent of the policy language, but this is exactly what trial lawyers do when they are litigating policy language.

With this information in mind, along with the increasing focus of regulators on certificate wording that might misrepresent policy language, we suggest that agents use extreme caution when responding to requests to place specific wording on a certificate.

Note: In its 2013 CGL filing, ISO included a new primary and noncontributory endorsement, the CG 20 01. This form does not eliminate the problem(s) cited above but it does clearly indicate that the intention of the downstream party’s CGL insurer is to provide primary and noncontributory coverage.

Related articles in the Virtual University: • “CGL ‘Primary & Noncontributory’ Certificate Requirements​“ • “CGL Contractual Liability, Additional Insured Status, Primary and Noncontributory, and Other Stuff You’re Sick and Tired of Dealing With” • The VU Certificates of Insurance Resource Section​ On a related issue, Jack Gibson, CPCU, CRIS, ARM, president of IRMI, has written an excellent article entitled, “Sound Advice for Contract Drafters: Fix Your Out-of-Date Insurance Requirements!” that is featured in the November 2010 IRMI Insights publication: http://www.irmi.com/insights/ articles/2010/outdated-insurance-clauses.pdf Reprinted with permission by the Virtual University.

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That’s why Imperial PFS,® the leading source of premium funding for the IIAWA membership, has been located in the Pacific Northwest for more than 30 years. In addition to a strong local business, we are dedicated to Customer service and delivering advanced technology to better serve YOU. Our stable and experienced team finds creative solutions to help address your needs and grow your books of business. For more information on how Imperial PFS® can help you, contact: Bothell: 800.888.2750 | Spokane: 800.234.7373

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Agents and brokers, for more information please contact: Sue Brennan - President P.O. Box 2011 Edmonds, WA 98020 (425) 954-2322 Ed Bukovinsky - President 1200 Fifth Ave., Suite 1910 Seattle, WA 98101 (206) 708-2000

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Retirement Plans Are You Aware Of Your Fiduciary Responsibilities?

By Dave Evans, Senior VP, IIABA

O

ver the past decade, the regulatory and judicial environment for qualified retirement plans, particularly 401(k) plans, has evolved to require more active involvement by the plan sponsor. This has put plan sponsors in a challenging position to oversee the complex components of the plan which includes investment selection and monitoring (including the development of an investment policy statement), the TPA, as well as staying abreast of new laws and regulations, and ensuring that plan participants receive relevant information and have effective and easy to use tools to help them make the best choices for their situation and objectives.

The Big “I” 401(k) Plan MEP was developed with exactly these requirements in mind: transparency in expenses, lower investment costs, wide variety of investment options, reducing the plan sponsor’s fiduciary exposure, high service standards, and helpful employee education tools resulting in maximizing the value of the retirement plan as an employee benefit and achieving the needs of the plan participants.

BIG “I” 401(K) PLAN MEP BACKGROUND A MEP is a retirement plan established by one plan sponsor – in this case, Big “I” Retirement Services, LLC - that is then adopted by one or more participating employers. The MEP establishes a single plan that covers all adopting employers, with the plan document generally written to allow for variation in plan design among the participating companies. Fund selection and monitoring are handled by the MEP – and outsourced - to Mesirow Capital as the ERISA 3(38) fiduciary. Independent fiduciary W. Michael Montgomery described the impact on fiduciary liabilities in Multiple Employer Plans as a Fiduciary Risk Mitigation Tool: “Employers adopting a sound Multiple Employer Plan… achieve a profound reduction in fiduciary risk exposure. The reason is a simple one: The adopting employer ceases to perform certain key roles that incur fiduciary status. When an employer merges its current single-employer plan into a properly structured 26

MEP, it is no longer the sponsor of the plan. It also should cease to be a trustee, plan administrator, or any sort of named fiduciary. Those central roles move to the MEP, and the inherent fiduciary liability transfers with them.” The relief offered by MEP participation is extensive but not total.

It’s important to note that the MEP brings efficiencies to deliver large 401(k) plan resources to smaller sized 401(k) plans yet the employer can still determine the plan provisions with regard to vesting, employer matching contributions and other features that they wish to offer.

ERISA 3(38) FIDUCIARY As set forth under ERISA, there are specific roles that plan sponsors can delegate as some of their responsibilities. A 3(38) is an “investment manager” under ERISA and by definition is a fiduciary because they take 1) discretion, 2) authority and 3) control of the plan’s assets. ERISA provides that a plan sponsor can delegate the significant responsibility (and significant liability) of selecting, monitoring and replacing of investments to the 3(38) investment manager fiduciary. Once a 3(38) is properly named, the plan sponsor effectively hands over authority to the 3(38) fiduciary to make investment decisions. Another important point to note is that the plan sponsor cannot completely eliminate its fiduciary liability. The plan sponsor is still responsible for the selection of the 3(38) investment manager and must properly monitor that 3(38) investment manager.

As detailed in the agreement between Mesirow Financial and the Big “I” 401(k) Plan MEP, Mesirow Financial will perform and defend its duties and obligations with respect to investment option monitoring in compliance with ERISA. If the plan sponsor and/or any agent to the plan is sued by a third party claiming that Mesirow Financial breached its ERISA fiduciary duty, Mesirow Financial will step in and defend the claim. This is an effective way for plan sponsors to lower their fiduciary risk.

PLAN EXPENSES As previously, discussed, the DOL is very concerned about the issue of plan expenses. For 401(k) plans, some or all of the plan expenses are born by the plan participants, reducing their return. The problem is the lack of transparency. 401(k) plans that use mutual funds, ETFs and separate accounts from mutual fund and insurance companies typically see an overall “expense ratio” which is the annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets deducted each fiscal year for fund expenses, including 12b-1 fees, management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund. Portfolio transaction fees, or brokerage costs, as well as initial or deferred sales charges are not included in the expense ratio.

The Big “I” 401(k) Plan MEP approaches fees in a very linear fashion: The recordkeeper does not receive any revenue sharing and is paid an annual administrative fee. The investment options that are provided are objectively screened with low investment expenses being an important component of the criteria.

For more information about how you can receive a no3285 Big Icomparison Washington obligation of your 401(k) Plan investment and 7.675X4.9 administrative expenses, please contact Christine Munoz, VP of Big “I” Retirement Services, at 800.484.4401 or at christine.

Gen Umbrella munoz@iiaba.net.

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IIABW Associate Members The Independent Insurance Agents & Brokers of Washington would like to thank the following companies for their support of Your association.

AFCO Premium Finance Steve Palmer 3928 137th Pl SE Mill Creek, WA 98012 (425) 238-1522 spalmer@afco.com

Capital Premium Financing Garn Kemp 12235 South 800 East Draper, UT 84020 (801) 244-2008 garn@capitalpremium.net

Imperial PFS Paul DeVenzio 22102 17th Ave SE, Ste 202 Bothell, WA 98021 (425) 9517-800 paul.devenzio@premiumfinance.com

Pacific Internat’l Underwriters, Inc Randy Blanchard P.O. Box 2007 Edmonds, WA 98020 (425) 771-8988 randy@piuinc.com

Surplus Line Assoc. of WA Bob Hope 600 University St, Ste 1710 Seattle, WA 98101 (206) 682-3409 bob@surpluslines.org

Alaska National Insurance Co Tim Ross 1111 Third Avenue, #2600 Seattle, WA 98101 (206) 515-1835 tross@alaskanational.com

Chubb Group of Ins. Cos. Greg Monroe 701 Fifth Avenue Seattle, WA 98104 (206) 224-4744 gmonroe@chubb.com

Insurance Producers’ Service Corp.

Ashley Kuaea 11911 NE 1st St, Ste B103 Bellevue, WA 98005 (425) 649-0102 akuaea@wainsurance.org

Pacific Interstate Ins Brokers, Inc Ashley Bernardi PO Box 4529 El Dorado Hills, CA 95762 (916) 941-0518 ashley@piib.com

Swett & Crawford Mike Hamby 720 Olive Way, 18th Floor Seattle, WA 98101 (206) 448-9400 mike_hamby@swett.com

All Risks Ltd Corky Weber, CRIS, AIS, MLIS 11811 N Tatum Blvd, Ste 4010 Phoenix, AZ 85028 (425) 495-0242 CWEBER@allrisks.com

Cochrane & Company Brian Carney P.O. Box 19150 Spokane, WA 99219 (509) 838-0655 bcarney@cochraneco.com

Just Right Cleaning & Construction Ben Justesen 6446 Rd 3 NE Moses Lake , WA 98837 (509) 765-4138 ben@jrcconline.com

Pemco Insurance Company Steve Milliren, CIC, CPCU P O Box 778 Seattle, WA 98111-0778 (206) 628-4080 steve.milliren@pemco.com

Tepco Premium Finance Andy Hansen PO Box 19127 Spokane, WA 99219 (509) 624-5146 ahansen@cochraneco.com

AmTrust North America Jason Burns 12909 SW 68th Parkway, Ste 460 Portland, OR 97223 (503) 403-3030 Jason.Burns@amtrustgroup.com

Encompass Maggie Cooper Seattle (206) 454-9834 maggie.cooper@encompass.com

Liberty Mutual Business Ins, NW Reg Patricia Brown 1191 2nd Ave, Ste 900 Seattle, WA 98101 (206) 473-3405 patriciaf.brown@libertymutual.com

Premier Marine Insurance Troy Moreira 625 Howe Street Vancouver BC Canada (604) 669-5211 troy.moreira@premiergroup.ca

Travelers Mary Townsend 1501 4th Avenue Seattle, WA 98101 (206) 464-5773 mtownse1@travelers.com

MAPFRE Insurance Rick Staten 3127 219th Pl SE Bothell, WA 98021 (206) 402-2604 rstaten@mapfreusa.com

Premium Assignment Corp Joe Schofield 151 Kalmus Drive, Ste C220 Costa Mesa, CA 92626 (206) 552-1079 joseph.w.schofield@suntrust.com

Vertafore Guy Weismantel 11724 NE 195th St Bothell, WA 98011 (425) 354-6786 gweismantel@vertafore.com

MetLife Auto & Home Chris Nachtsheim, CIC, CISR 15127 Main St E, Ste 104 Sumner, WA 98390 (206) 295-3207 cnachtsheim@metlife.com

Progressive Insurance Shelley Rogers 19909 120th Ave NE, Suite 200 Bothell, WA 98011 (440) 910-3394 SRogers@Progressive.com

WA Surveying & Rating Bureau Tracy Skinner, CIC 2101 4th Ave, Ste 300 Seattle, WA 9812 (206) 273-7246 tracy.skinner@wsrb.com

Mutual of Enumclaw Ins. Co. Rich Hawkins 1460 Wells Street Enumclaw, WA 98022 (360) 825-2591 rhawkins@mutualofenumclaw.com

Red Shield Insurance Company Jim Brown 1411 SW Morrison St, Ste 400 Portland, OR 97205 (503) 226-4146 jbrown@redshield.com

Western National Insurance Steve Richards 9706 4th Avenue NE, Ste 200 Seattle, WA 98115-2162 (206) 526-5900 steve.richards@wnins.com

National General Insurance Co Robyn Christian PO Box 3199 Winston-Salem, NC 27102-3199 (336) 435-2357 robyn.christian@ngic.com

RT Specialty LLC Ed Bukovinsky 1200 5th Ave, Ste 1910 Seattle, WA 98101 (206) 708-2000 ed.bukovinsky@rtspecialty.com

Worldwide Facilities, LLC Mike Stutsman 601 Union St., Suite 1630 Seattle, WA 98101 (206)749-9151 mstutsman@wwfi.com

NW Insurance Council Kenton Brine 200 Cedar Street Seattle, WA 98121 (206) 624-3330 kenton.brine@nwinsurance.org

Safeco Insurance Margaret Wiese 1001 4th Ave, Ste 1600 Seattle, WA 98154 (206) 473-5412 margaret.wiese@safeco.com

Oregon Mutual Insurance Co. Mary Emerson, CPCU, CIC 11700 Mukilteo Speedway #201 Mukilteo, WA 98275 (206) 696-2746 mary.emerson@ormutual.com

Superior Underwriters Annie Dimmitt P.O. Box 97024 Redmond, WA 98073-9724 (425) 643-5200 adimmitt@gsusuperior.com

AmWINS Brokerage of Washington Joe Constantine 600 University St, Ste 510 Seattle, WA 98101 (206) 922-1801 joe.constantine@amwins.com Anchor Bay Insurance Managers, Inc. William Tanner, CPCU, AU PO Box 2510 Silverdale, WA 98383 (360) 649-8969 btanner@surpluslines.com

Foremost Insurance Group Lena Battraw WA Lena.battraw@foremost.com Grange Insurance Association Steve Stogner PO Box 21089 Seattle, WA 98111 (206) 448-4911 sstogner@grange.com

Griffin Underwriting Services Van Griffin P.O. Box 3867 BCE Consulting LLC Bellevue, WA 98009 Jeff Bronaugh, CPCU, CLU, ChFC, CIC (425) 453-8599 404 3rd Ave S, A-205 vgriffin@gogus.com Edmonds, WA 98020 (520) 343-4394 Hagerty Insurance LLC jeff@bceconsulting.co Ashley Shoemaker 11200 Kirkland Way, Ste 200 Berkley North Pacific Group Kirkland, WA 98033 Linda Carlson, CPCU, CIC, AAI (425) 736-7777 660 E Watertower St ashoemaker@hagerty.com Meridian, ID 83642 (208) 898-5200 HCIT/Trustco, Inc lscarlson@berkleynpac.com Eric Kingdon 2063 E 3900 South, Ste 100 Brown & Riding/AMW Salt Lake City, UT 84124 Mark Heuer (801) 278-5341 901 5th Avenue, Ste 2300 erick@trustcoinc.com Seattle, WA 98164 (206) 816-6767 Hull & Co. mheuer@brcins.com Jenny Lupescu 950 Pacific Ave, Ste 725 Capital Insurance Group Tacoma, WA 98402 Bryan Stanwood, CPCU (253) 857-1050 2300 Garden Road jlupescu@hullconw.com Monterey, CA 93940 (831) 233-5500 bstanwood@ciginsurance.com

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Personal Umbrella Policy A Smart Source of Protection for your Customer

Existing homeowners and auto insurance may not be enough to cover a lawsuit or judgment. A personal umbrella policy will substantially increase your customer’s overall liability coverage beyond the basic coverage provided under homeowners and auto insurance policies. Read the following real-life scenarios to learn the benefits of an RLI personal umbrella policy:

A REAL-LIFE SCENARIO INVOLVING RENTAL PROPERTY

A REAL-LIFE SCENARIO INVOLVING A HIT AND RUN

Incident: The Insured was renting a unit to a tenant.

One day, the tenant and his friend hit the gas line while working in the basement of the unit. The insured had the gas company perform an inspection.

The inspector instructed the tenant and insured not to return to the basement. Nevertheless, the tenant and his friend went back into the basement which exploded, requiring both men to be taken to a hospital.

Incident: The insured was driving on a highway when she was rear ended by another driver, causing her car to hit a light pole. The other driver was uninsured and attempted to flee the scene but was apprehended. The insured sustained serious injuries to her body.

Outcome: The claim exceeded the insured Homeowners Policy limit. The RLI Personal Umbrella paid $310,000 in excess of the underlying Homeowners coverage for the injuries. Without the Personal Umbrella, the insured would have incurred a $310,000 out of pocket expense.

A REAL-LIFE SCENARIO INVOLVING PREMISES LIABILITY Incident: The insured hired a friend to replace and install a new dock on the lake behind his house.

During the construction, the friend requested some trees be removed in order to get the old dock out of the water. The insured used a backhoe to knock the trees. While knocking down one of the trees, a limb hit the friend on the head and neck.

Outcome: The underlying insurance coverage limits were paid out, but there was still a balance of $800,000 for the claim. The RLI Personal Umbrella paid out the remaining $800,000, avoiding any out of pocket.

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Outcome: The insured’s primary insurance company paid out the full Uninsured Motorist limit. Unfortunately, it still left the insured with $260,000 in medical expense. Thankfully, the RLI Personal Umbrella Excess Uninsured Motorist coverage paid the remaining expenses of $260,000.

IIABW’S ENDORSED RLI UMBRELLA The RLI standalone personal umbrella is administered by IIABW’s for-profit subsidiary, Insurance Producers Services Corporation (IPSC). For information on the program, contact Ashley Kuaea at akuaea@wainsurance.org or (425) 649-0102 ext 225.

BENEFITS FOR YOUR CLIENTS Available limits up to $5 million Competitive pricing Good option for hard to place risks RLI is admitted; A.M. Best “A+” rated Online bill pay Direct bill at renewal BENEFITS FOR YOU 15% commission on new and 10% on renewal business No minimum volume requirements or access fees Easy online quoting Electronic signatures and online credit card payments options Self-underwriting application

A NAME THAT BUILDS RELATIONSHIPS At Risk Placement Services (RPS), we are committed to building relationships one retail partner at a time. Our stewardship begins by providing you access to the finest markets and top producers in the industry and providing customized solutions to meet your needs by designing, negotiating and tailoring individual risks that help you succeed. It’s a partnership you can count on!

To learn more contact Bud Carter 480.860.5572 or email at Bud_Carter@RPSins.com. www.RPSins.com

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You’re passionate about your clients.

We’re passionate about protecting them.

You have a passion for supporting your clients. Liberty Mutual has a passion for protecting them with coverages like commercial auto, workers compensation, and business owner’s policy (BOP). With regional offices, industry understanding, and comprehensive coverages for businesses of all sizes, we have the local knowledge and national resources to help your clients thrive. Talk to your territory manager today about Liberty Mutual Insurance, or go to libertymutualgroup.com/business.

We are proud to support the Independent Insurance Agents & Brokers of Washington. @LibertyB2B

© 2016 Liberty Mutual Insurance. Insurance underwritten by Liberty Mutual Insurance Co., Boston, MA, or its affiliates or subsidiaries.