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A Subsidiary of Risk Placement Services, Inc. Serving the Transportation Industry Since 1946 Spring 2015 • THE BIG “I” VIRGINIA
3
SPRING 2015
BIG I The
Official Publication of the Independent Insurance Agents of Virginia
Virginia
Nettie Ardler, CPIW, DAE, AIAM Insurance Account Executive aardler@iiav.com Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134 Teri Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com Sherry Grubbs, AISM Accounting Manager sgrubbs@iiav.com Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138 Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com
The Big I Virginia is a publication of the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA 23294 Phone: 804.747.9300 / Toll-free: 800.288.IIAV (4428) Fax: 804.747.6557 E-mail: members@iiav.com / Website: www.iiav.com
Inside this issue
IIAV STAFF
Melanie Kjar Communications/Website Director mkjar@iiav.com Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133 Danny Mitchell, AAI Vice President Business Development dmitchell@iiav.com cell (804) 929-4135
6 10 12 14 18 20 27 28 30 32 35 38 40 42 45
Message from the Chairman of the Board - William H. Talley, IV, CIC Message from the State National Director - James P. Bradner Message from the President and CEO - Bob Bradshaw Choosing the Right E&O Carrier Carrier E&O Claims Against Agents Continue Trend Beyond Customer Satisfaction: Customer-Pleasing Marketing & Sales Ideas What Would You Do if Your Agency Had a Data Breach? Scott Insurance: A 2015 Best Place to Work in Virginia High Maintenance vs. Difficult Employees and How to Deal With Them Reduce Agency E&O Exposures for Mobile Devices Make-A-Wish Greater Redmond Gives Teen a Boat Kids Cars: An E&O Time Bomb E&O Risk Management Considerations of TRIA’s Expiration What Makes a Successful Sales Meeting? E&O Risk Management Webinars
IIAV extends our appreciation to the following sponsors of this publication: AAA Mid-Atlantic AIM / Bloss & Dillard Agency
28 8
Interstate Insurance Management
13
Jackson Sumner & Associates
2
Amerisafe 43
Johnson & Johnson
24, 25
Anderson and Murison
22
Millers Mutual Group
7
Atlantic Specialty Lines
11
Nationwide 15
43
Penn National Insurance
17
Preferred Property Program
37
Atlas General Services Builders Mutual Insurance Burns & Wilcox
21, 47 9
RPS Rollins
3
Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com
Coastal Agents Alliance
16
SIA of VA
Consumers Insurance / Motorists Group
23
SIAA 37
FCCI Insurance Group
34
Southern Insurance Company of VA
Kristina Preisner IIAV Director of Education & VAIA Executive Director kpreisner@iiav.com
GUARD Insurance Group
39
The Iroquois Group
Harford Mutual
41
Utica National
Harleysville Insurance
48
Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 Bonnie J. Warren, ACSR, CPIW, DAE, RPLU Insurance Account Executive bwarren@iiav.com
4
IIAV is an organization devoted to promoting, enhancing, serving and assisting independent insurance agents.
THE BIG “I” VIRGINIA • Spring 2015
For information on advertising please contact: Jim Aitkins, Blue Water Publishers, LLC / 22727 161st Ave SE, Monroe, WA 98272 phone: 360.805.6474 / fax: 360.805.6475 / jima@bluewaterpublishers.com
The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly by Blue Water Publishers, LLC. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers.
41 19 5 28
Strong Agencies Made Stronger
For over 30 years Iroquois has helped make strong, independent agencies even stronger and more independent. And it shows.
LEADERSHIP Iroquois recognizes some of its members who have recently played key leadership positions within the industry: Ryan M. Andrew
Douglas B. Megill
John W. Atkins, III
Crystal Miller-Johnson
Barry K. Carper
J. Vince Mullins
W. Montgomery Dise
Michael Partlow
Dawn Dotson
Jordan Reynolds
Michael F. Funkhouser
Robert T. Short
Frances P. Garrett
Dennis C. Winfree
Shannon H. Herring
Benjamin G. Winters
VFSC Board of Directors The Andrew Agency, Inc.
District 5 Director, IIAV McLean Insurance Agency, Inc.
President, VFSC Board of Directors Lewis Insurance Associates Immediate Past President, PIA of VA & DC Insurance Center of Winchester Second Vice Chair, IIAV Asset Protection Group, Inc.
First Vice Chairman, IIAV Associated Insurance Systems Services, Inc. Board Member, PIA of VA & DC Huffman Insurance Agency, Inc. VFSC Board of Directors Partlow Insurance Agency, Inc.
VAIA Board of Directors Robins Insurance Agency, Inc.
Independent agents with premium from $1 million to $100 million join The Iroquois Group® for market optimization and strategies to increase their revenue, profits and agency value—without giving up their independence.
Board Member, PIA of VA & DC SWVA Professional Insurance Agency, Inc.
Vice President, VFSC Haun Magruder Inc.
Immediate Past Chairman, IIAV Short Insurance
Past President, PIA of VA & DC Chas. Lunsford Sons & Associates, Inc. Young Agent Liaison, IIAV Hubbard Insurance Agency, Inc.
VAIA Board of Directors Wood Insurance Agency District 3 Director, IIAV Winters Oliver Insurance Agency
Edward C. Kellam, Jr. District 2 Director, IIAV Ware Insurance
The
®
IROQUOIS Group
To learn more about how Iroquois could further strengthen your agency, contact Matt Ward at 804-320-6984 or mward@iroquoisgroup.com and visit our website at www.iroquoisgroup.com
Spring 2015 • THE BIG “I” VIRGINIA
5
Chairman of the Board William H. Talley, IV, CIC wht4@whts.com
“Leadership and learning are indispensable to each other.” John F. Kennedy – from his prepared, but never delivered speech in Dallas Texas November 22, 1963
T
he most successful organizations in the world are led, not managed. Great insurance organizations are no exception. Unfortunately, many key principals of our independent agency system rise to that position after successful careers as producers, but having never been formally trained in the principles of true leadership. Our nation’s military places great emphasis on the development of its leaders at every level. Leadership and learning are a lifelong pursuit. I was privileged to learn from these leaders while a Cadet at Virginia Military Institute. One of my partners in Keystone Insurance Group, Robert Sutter, is a former Captain in the U.S. Marine Corps, and is responsible for training our salespeople, and emerging leaders of our partner agencies. He reminded me of ten qualities stressed by the military that are the common foundation of successful leaders. They are just as applicable to us as agency leaders as they are to effective military units. He refers to them as the “Timeless Ten”: Trust, is the cornerstone of leadership. It is earned over time and can be lost in an instant. Trust is the result of consistent actions observed by all with whom the leader interacts. No leader can be truly effective without it. Being worthy of trust begins with a serious assessment of self. Know Yourself and Seek Self Improvement. All leaders must critically evaluate themselves to determine areas of strength and weakness. With the knowledge of oneself, a “Truth Based” compass, and past experience with group behavior, one can determine the best course of action to take in most situations. Know Your Staff and Look After Their Welfare. Every person you lead is different. Your ability to know what 6
THE BIG “I” VIRGINIA • Spring 2015
motivates them, what they value, and what it takes to get the best from them will determine your success as a leader. Putting the welfare of your troops ahead of your own is the hallmark of great leaders. Character, is the habit of doing the difficult things other people won’t do. It’s avoiding procrastination and doing the hard things first. It’s a continuation of doing what’s right even when no one is looking. Conviction requires the leader to know what he believes, and be willing to stand up for those beliefs regardless of cost. It is the character trait that enables the leader to act with courage. Be Technically and Tactically Proficient. It is a requirement of leadership that one must know his, or her, job thoroughly and be skilled in its performance to the ultimate accomplishment of the agency’s mission. This principle builds upon the concept of knowing oneself and constantly seeking improvement. Study is a lifelong commitment, and the leader who makes it his, or her, priority to maintain proficiency remains at the top of their game. Train Your Staff as a Team. Teamwork is the key to successful operations, from the smallest unit to the corporation as a whole. Train individuals to appreciate their role on the team. Ensure that each member of the team is thoroughly familiar with, not only their duties, but the purpose of those duties in the overall scheme of the operation. Make Sound and Timely Decisions. Leaders must be able to rapidly assess a situation and make a sound decision based upon that assessment. Hesitation or inability to make a decision leads to lack of confidence
Spring 2015 • THE BIG “I” VIRGINIA
7
among one’s subordinates. If a decision turns out to be a poor one, reassess the situation and make another. Followers respect a leader who corrects mistakes immediately rather than sweeping them under a rug or attempting to bluff their way through the adverse outcome of a poor decision. Keep Your Troops Informed. The concept of “Commander’s Intent” states that, whenever possible, take the time to tell your staff why they are doing what you have requested. Morale is high when people know and understand the underlying reasons for their actions. That understanding also permits them to accomplish their mission in the leader’s absence. Keeping the staff informed also has a positive effect of reducing rumors and replacing them with the truth. The communicative leader must clearly outline expectations and “inspect what he, or she, expects.” Subordinates that know what is expected of them, and why, are less anxious and more effective. Develop and Prepare Others, and Yourself, for the Next Position. Leaders must constantly strive to develop leadership qualities in their subordinates. They should prepare them to assume the responsibilities of the next level higher, just as the leader doing the training should prepare for the next senior position. Too many leaders mistakenly fear having capable subordinates. They believe it threatens their position. Well trained subordinates enhance the leader’s position, and qualify him, or her, for greater responsibility. To truly demonstrate the necessary leadership to effect culture change in your agency, you need to embrace the Timeless Ten until they become a part of your DNA. Successful leaders, whether in business, education, government or our Military, recognize that learning is a lifelong pursuit and that ongoing education and training is crucial to dynamic leadership. True leadership is a rare thing. For most of us it isn’t something that comes naturally. Some people ponder whether leaders are made or born. The true leader isn’t concerned with that answer, but instead concentrates on developing the leadership qualities necessary for success. Leadership and learning are parallel paths on a never ending journey! If you make development of your leadership skills a priority, and employ these skills every day . . . then in the eyes of your people you will be a leader worth following. 8
THE BIG “I” VIRGINIA • Spring 2015
Coverage on the road.
No matter what type of transportation business you own – covering both auto liability and physical damage for public auto is essential. Agents Insurance Markets (AIM) makes it easy to insure all vehicles used for passenger transportation. Call us today! • Taxis • School transportation to include personal use • Daycares • Limousines • Employee transport • A+ rated carriers
Visit us online at
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Take your professional liability business to new heights. PROFESSIONAL LIABILITY
At Burns & Wilcox, our expertise becomes your expertise. Whether it is cyber liability or medical malpractice, EPLI or fiduciary liability, we will ensure your clients avoid any gaps in coverage. Raise the level of your professional liability expertise with Burns & Wilcox. Baltimore, Maryland | 410.891.4200 toll free 800.729.1273 | fax 410.540.9140 baltimore.burnsandwilcox.com Charlotte, North Carolina | 704.525.1152 toll free 800.999.3434 | fax 704.525.7399 charlotte.burnsandwilcox.com Morehead City, North Carolina | 252.726.8992 toll free 800.498.1600 | fax 252.726.9484 moreheadcity.burnsandwilcox.com Commercial | Personal | Professional | Brokerage | Binding | Risk Management Services Spring 2015 • THE BIG “I” VIRGINIA
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State National Director James P. Bradner jbradner@towneinsurance.com
G
ame Changers….When you’ve been around this business for a while you have seen the so called ” game changers”. To name a few, BOP’s, fax, E-Mail, Banks in insurance, etc. I’ve just returned from the mid-winter National Board meeting and a large part of the discussion was on the web and, specifically, our websites. I can remember when we felt comfortable that people wanted to talk to an agent, either captive or independent, in order to buy insurance. Then insurance became available on the internet directly with the insurance company. No agent needed, call us and we’ll bind you in 15 minutes and save you 15%.... Next, call us and we’ll quote you 10 different company auto quotes and you can pick the one you want. Now remember, our companies, loyal independent companies, started sharing their rating platforms with these “comparative raters…So, in order to compete, IIABA developed CAP, or as it has evolved into, “Trusted Choice.Com “. Now to the Game Changer….GOOGLE is about to enter the US insurance marketplace!
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THE BIG “I” VIRGINIA • Spring 2015
It appears that Google is setting up to be a comparative rater. It will contract with insurance companies, independents included, to offer comparative quotes on-line. Dave Evans of IIABA thinks it will work like this: Type “insurance or auto insurance “ in Google and Google will appear third in the “paid click” list. Dave believes they don’t want to be first because about 17% of their click revenue comes from auto insurance companies. They don’t want to totally cannibalize themselves. If you choose “Google” from the menu, you will get a quote which will be direct with an insurance company. No agent involved. What is the lesson here? Our agency system and our “independent” values need to be protected and advertised now more than ever. Your National Association and Trusted Choice are your biggest weapons in this fight. Make sure your Web Presence is professional and interactive. Be sure you are using everything your association has to offer in these efforts, and support your association with your time and involvement. We need to be all-in with Trusted Choice. Remember small business is next, then….
Great customer service starts with teamwork.
Attitude. Assistance. Adaptability. Reach your goals when you work with the team at Atlantic Specialty Lines. Our brokers will use their knowledge and experience to find the best coverage for your customers, while delivering a competitive price.
Experience the A-way — Attitude. Assistance. Adaptability.
ATLANTIC SPECIALTY LINES 800.368.2095 | atlanticspecial.com Spring 2015 • THE BIG “I” VIRGINIA
11
President and CEO Bob Bradshaw rbradshaw@iiav.com
E&O Protection – Great Protection/Excellent Customer Service
O
ne of the fundamental reasons associations exist is to provide group protection for its membership – be it political or professional. There is strength in numbers. Virtually every association I’ve had the pleasure of working with has provided insurance protection opportunities for its membership – accountants, physicians, life agents and now, P&C agents at the broader financial community. With each of these organizations there was a healthy tension between the association and the insurer. That continues here at the Big “I”. Our E&O program has substantial agent oversight, by agents who want only the very best protection available. First, there’s the national Professional Liability Committee (PLC) which is part of our national association. Service on this committee is well desired and Virginia is lucky to have a representative on this committee – Bob Yergey with Yergey Insurance in Northern Virginia. This hard working committee works directly with Swiss RE and other carriers to make sure that the insurance agents’ interests are protected through the national E&O program. They provide substantial input on contract, policy and coverage issues. The national PLC is supported by the IIABA State Affiliates such as IIAV’s Virginia Financial Services Corporation. VFSC provides specific
12
THE BIG “I” VIRGINIA • Spring 2015
oversight to our E&O program opportunity and needs, and considers coverage issues presented by the membership. It’s a hard working group that now, luckily, has direct input to the national association. We’re proud to say that in this regard Virginia is well respected throughout the federation for the enhancements recommended and alerts to problems. We are, of course, also supported by our General Counsel – Doug Palais – who is notable as one of the most successful attorneys in the country for defending agents. And finally of course is the customer service you receive when you call IIAV/VFSC on insurance issues. Directed by Linda Loving – with over 30 years of dedicated service to the association – Account Managers Annette Ardler and Bonnie Warren are two of the most experienced E&O professionals in the industry. They have worked hard to be your advocates to the insurer E&O markets that we have. You should take great comfort in the professional and experienced staff that you have working on your behalf, both here and in our national office. I know it will come as a surprise to you but sometimes the insurers can be headstrong. But more often than not, when presented with the solid facts, they generally see our way. Remember, with the IIAV sponsored E&O program….you’re not only a client, but a member. That gives you considerable strength.
All roads lead to Interstate.
Interstate Insurance Management, Inc. is now Zurich’s selected insurance provider for Commercial and Public Auto insurance in North Carolina and Virginia. For more than 40 years, we’ve helped retail agents and brokers place a wide variety of Commercial Auto and Public Auto risks. All programs are underwritten by Zurich North America Commercial: • A.M. Best A+/stable rated* • More than 100 years of commercial propertycasualty experience in the U.S. Let us show you how our industry knowledge and underwriting experience can make a difference for you. For more information, contact Donna Rigley at donna@interstate-insurance.com or (704)661-7381.
(07/14) 112003550
These programs are also available in DE, MD, NC, NJ, PA, VA, and WV.
*Rating as of July 30, 2014. For complete rating information visit www.zurichna.com.
Spring 2015 • THE BIG “I” VIRGINIA
13
Choosing the Right
E&O Carrier By Linda Loving, CIC, AISM, AIAO
A
ccording to Insurance Journal’s exclusive 2014 Agency E&O survey, 61% of agencies have had the same E&O carrier for at least the past five years, and 25% of those who shopped their E&O did so to obtain a lower price. This same survey revealed 54% expect E&O premiums to increase at their next renewal. While price is certainly a consideration, price alone should not drive the decision to move. There are several factors that agencies should consider when choosing their E&O carrier. Choosing your E&O carrier is one of the most important decisions an agency makes. Your assets and reputation are on the line every day. There are lots of choices out there, but how do you make the right choice? Agencies should look for an experienced carrier with a proven track record of commitment to
14
THE BIG “I” VIRGINIA • Spring 2015
u
the E&O market. Agencies want the security of knowing that their E&O carrier will be there for them in the event of a claim, and will work hard to protect their interests. The financial rating/stability of a carrier is key. No one wants to have a claim, but when and if a claim does arise, you want the carrier to be there and be able to respond accordingly. Know the financial rating of the carrier as well as their history and reputation in E&O business. It is essential that your carrier can provide you with the coverage you need for the exposures you have. Read and understand your policy. It is important to know the definition of who is an insured. Make sure all of the professional services and activities that you provide are covered or at least understand what is not. What constitutes a claim? What are the extended reporting period options in the event your agency is sold? Read and understand the exclusions. If there are any services you provide that are not covered in their standard policy
“ I trust NatIoNwIde ®
with my employees’ benefits.” – Dale Earnhardt Jr., NASCAR® driver and owner, JR Motorsports
Dale Earnhardt Jr. and his family joined the Nation more than 30 years ago. That’s why, as a longtime Nationwide member, he trusts us with his employees’ benefits. Nationwide Employee Benefits offers: • Life/AD&D
• Limited Benefit Medical
• Disability
• Accident and Hospital Ca$hBackSM
• Dental
Call Paul Taylor at 734-788-6463 or go to nationwide.com/neb to learn more.
The name and likeness of Dale Earnhardt Jr. and other related trademarks and copyrights are used with permission of Hendrick Motorsports, LLC and JR Motorsports, LLC. Paid endorsement. © 2012 JR Motorsports, LLC. NASCAR® is a registered trademark of the National Association for Stock Car Auto Racing, Inc. The NASCAR Nationwide SeriesTM logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc., and Nationwide Mutual Insurance Company. Nationwide, the framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. © 2014 Nationwide Mutual Insurance Company. All rights reserved. Underwritten by Nationwide Life Insurance Company. EBO-0156VA (01/14)
Spring 2015 • THE BIG “I” VIRGINIA
15
form, ask if coverage can be added by endorsement? What limits of liability does the carrier provide? The size of the agency does not necessarily determine the limit of liability you should choose. Unfortunately, there is no magic formula to determine the amount of liability you need. Big claims can and do happen to small agencies. It is important to ask for options and consider higher liability limits. You may be surprised to find that higher limits do not cost as much as you think. Look for aggregate limits that are a multiple of the per-claim limit. With aggregate limits, in the event of a large loss, you will still have coverage for future claims. What type of deductible options does the carrier provide? Is it loss only or loss and expense? Are you only required to pay the deductible if your agency is determined to be liable, or are you responsible for defense costs on claims even where your agency is not liable? What type of claim service does the carrier provide? On average, about 1 in 7 policyholders will report a potential claim to their E&O carrier. Although half of those claims may be closed with no payment or loss reserve, it is very likely that your agency, at some point during its lifetime, will be involved in a claims situation. Agencies want a carrier with a profession claims staff who have the expertise and years of experience to proactively manage their claim to obtain the best possible resolution for the agency. What type of risk management services does the carrier provide? You want to look for a carrier that offers risk management resources. This is vital to help your agency avoid the hassle and expense of E&O claims. Price is obviously a big factor in considering which E&O carrier you choose. Statistics from the Insurance Journal’s 2014 Agency E&O survey indicate that 25% of agencies who shopped their E&O did so for a lower price. Furthermore, 56% of agencies saw E&O premiums increase in 2013 compared with 2012 when only 52.3% saw an increase. E&O pricing is based on several factors including but not limited to: experience of agency and staff, premium volume, type of business written, financial rating and stability of carriers they represent, office procedures in place and claim history. Agencies should look for a carrier that has a history consistent with and fair pricing in relationship to market conditions. Obviously, no agency likes to see rate increases, but a gradual and logical adjustment in rates is important to maintain a financially stable program. Lastly, your servicing agent is also a key component. Do they have the staff experience, professionalism, and understanding of a insurance agent’s needs? Are they 16
THE BIG “I” VIRGINIA • Spring 2015
available when you need them and easy to work with? Can they provide you alternative E&O markets if needed? Do they go the extra mile to meet your needs? One size does not fit all. Not every market is the right market for every agency. It is important to carefully select the carrier who can provide the coverage you need for the exposures you have at a fair price – one who has strong financial stability – who has experience and commitment to the E&O market – one whose claim service you are satisfied with in the event of a claim - and whose servicing agent is there for you in the event of any questions, or when you need guidance. Linda Loving is the Chief Operating Officer of the Independent Insurance Agents of Virginia (IIAV) and Executive Vice President of Virginia Financial Services Corp (VFSC). She has been with IIAV/VFSC since 1985. Linda is licensed in P&C and L&H. She obtained her CIC in 1987 and earned her AISM and AIAO designations while working at the IIAV. Linda is responsible for the internal operations of IIAV with a primary focus on the growth and success of the for-profit division of the association.
Coastal Homeowners Insurance
IISO HO3/HO6 Immediate Quotes Primary and Secondard Homes are eligible AM Best “A” Rated 15% commission For an appointment, contact:
Nicole O’Brien Phone: 609-277-7809 x107 nobrien@coastalagentsalliance.com
We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-in-hand to help our agencies grow profitably.
Our agents set us apart. Business • Surety • Auto • Home
www.PennNationalInsurance.com Visit our website to find out more. Spring 2015 • THE BIG “I” VIRGINIA
17
Carrier E&O Claims Against Agents Continue Trend
Make Sure Interactions with Carriers are Documented
By David Hulcher
T
en to fifteen years ago, E&O claims involving the carriers were rare. However, E&O claims data from Swiss Re indicates a clear increased trend in the number of claims involving carriers making claim against the agent. Below are some of the types of claims involving carriers along with scenarios: •
•
•
18
Exceeding their binding authority: An agency may be granted binding authority by the carrier to bind policies up to specified limits, e.g., $250,000, without first submitting the application to the carrier for approval. When the agent binds a policy containing limits in excess of $250,000 and a large loss occurs, the carrier is likely to deny on the basis that the agent exceeded his authority -- or will cross-claim against the agent, seeking indemnity. Not adequately explaining policy provisions: The agent obtains a policy for her customer’s newly acquired property that contains a ‘60 day vacancy’ clause. When the new owner fails to occupy the new property for over 60 days a water leak occurs and substantial damage occurs to the building while it is unoccupied. Both the customer and the carrier that denies coverage based on the vacancy clause will argue that the agency failed to properly explain the policy provisions. Failing to comply with underwriting guidelines: An agent has binding authority with a carrier that insures boats, subject to the carrier’s underwriting guidelines, which restrict coverage to pleasure crafts under a specified horsepower and length. After a serious loss occurs, the carrier investigates and determines that the boat in question slightly exceeds both limitations -- and denies coverage. If forced to pay the loss, the carrier will file suit against the agency for failing to comply with its guidelines.
THE BIG “I” VIRGINIA • Spring 2015
•
Providing inaccurate or incomplete information to carrier: An agent remarkets an account to a new carrier, but fails to include information regarding prior losses. When a new loss occurs the carrier takes the position that a material misrepresentation occurred and, had the information about the prior losses been known, then it would not have insured the customer. The carrier pays the loss and files suit against the agency to recoup its claim payment. The importance of the need for information to come from the customer and applications to be signed by the customer cannot be understated. Even if the carrier doesn’t require an application, that doesn’t mean the agency shouldn’t keep one in their files.
•
Failing to provide timely notice of a claim to the carrier: If an agent fails to provide the carrier with notice of a claim, timely notice to the agent could be deemed timely notice to the carrier. In that case, the carrier could pay the claim and then file suit against the agency, arguing its investigation of the loss was prejudiced by the delay in receiving notice of the loss. One such example would be an auto loss wherein the car was repaired before the carrier had a chance to inspect it.
David Hulcher is AVP of Agency E&O Risk Management for the Big “I” Professional Liability Program.
there when it matters most there when it matters m
Direction
Southern Insurance Company of Virginia remains committed to our chosen direction for distribution — the independent agent system. Unlike many others in the industry, Southern has no interest in any other distribution channel. Instead, we focus our energy on consistently delivering greater value to our agents. Staying true to our chosen course of supporting the independent agent system… another way Southern is “There When It Matters Most.”
To learn more visit www.donegalgroup.com or call Judge Parker at 800-468-1127 ext. 2112.
Spring 2015 • THE BIG “I” VIRGINIA
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By John Graham
Going Beyond Customer Satisfaction
Customer-Pleasing Marketing and Sales Ideas
T
here’s an over-supply of useless, wacky, and just plain dumb marketing and sales ideas. For example, if someone says the best time to email customers is 10 am on Thursdays, forget it. What if you’re aiming at teachers, lawyers, nurses, boomers or just about anyone else? One solution never fits everyone, even if they’re in the same market segment. So, forget about simple solutions to issues that require serious thought. Right at the top, an idea that makes sense must pass the useful test; it’s only good if it works — if it gets the desired results. Here are seven useful marketing and sales ideas that will please your customers. #1. Make them happy. Satisfied customers aren’t necessarily happy customers. Happiness doesn’t come from being satisfied; it comes from the unexpected. The customer told the self-storage manager his lock didn’t fit on the locker and he needed to buy a new one. The manager grabbed one from the wall display and handed it to the customer. “Take this. We’re glad to have you here,” he said. That’s happy. And so is getting a free container of paint mixed to the right shade to take home to see if it works. Or 20
THE BIG “I” VIRGINIA • Spring 2015
receiving a follow up email or phone call to see if all is well and to ask if they could do anything better. Happy is free shipping, easy returns, or a chat line. #2. Dispel their doubts. Today’s customers are skeptical. Just because we say it’s so doesn’t mean they believe it. In fact, they probably don’t. Even so, businesses and salespeople say that “customers come first,” and that they’re trustworthy, reputable, and reliable. And no one believes them. No one. What can you do to become credible? A recent Nielsen study commissioned by inPowered points the way. According to Research Brief, the study indicates that expert content, or what they call “credible, third-party articles and reviews” is the “most effective source of information in impacting consumers along all stages of the purchase process, across all product categories.” #3. Spot their problems. More often than not customers may not even know they have a problem and even if they’ve figured it out, they may not want to talk about it. Your value to customers rests in your ability to spot problems, many times those that others either ignore or fail to see.
Builders university
celeBrates
its newest graduates: Steve Brodie
Rebecca Moore
Friedman Insurance Agency Inc Virginia Beach
Morgan Marrow Company
Pamela Watson Goodrich & Watson Insurance Inc. Newport News
Steven Moore
These agenTs have earned a round of applause.
Invincia Corporation Chesterfield
Marsha Hill Lee Curtis Insurance Services Inc. Fredericksburg
Jason Magruder Morgan Marrow Company Hampton
Hampton
Sara Banks Steve Love Insurance Agency LLC Virginia Beach
Keith Heck Towne Insurance Agency Virginia Beach
Natalie Lynn Towne Insurance Agency Virginia Beach
David Passerell Towne Insurance Agency Charlottesville
Hard work took these agents to the head of the class. To learn more about Builders University: 800.809.4859 • buildersmutual.com
1290–1214
Builders Mutual Insurance Company recognizes these Virginia agents on receiving their Certified Builders Insurance Agent (CBIA) designation. Completing these requirements shows an advanced understanding of the insurance needs within the construction industry. When you work with a Certified Builders Insurance Agent, you are partnering with the best in the business.
Stay connected. buildersmutual.com 21
You’re the “primary care physician” that customers want. Anyone can sell “stuff”, but only an expert salesperson can identify and come up with the right diagnosis for a troublesome issue. Now, here’s the kicker: the problems you spot don’t need to be related to what you’re selling, and neither do they need to be something huge. It makes no difference, because pointing them out shows you care about the customer, not just about the sale. #4. Create their interest. After speaking with the new sales director for an insurance product, the consultant recognized why he seemed to be floundering. He was clearly competent, knowledgeable, and came with a good track record, but wasn’t fully engaged. Candidly, he didn’t know what to do to get moving quickly. He made phone calls when he had time, but the results were zilch. He was busy, but not productive. It was clear he didn’t have any understanding of why anyone should do business with him, which sent the message that he was just another salesperson to be ignored. How could he succeed without creating interest? His database was non-existent and he had no way to communicate with prospects (other than to ask for business on the phone), no way to share helpful solutions, new information, and success stories that would attract their interest and help develop a reputation as the go-to person in his field. #5. Engage them their way. Apps in themselves aren’t the key to getting close to customers. There are good ones, but most fail to deliver the right results because they’re designed to serve senders, not users, which is the problem with just about all types of communication. To prove the point, close to 90% of apps are disregarded shortly after downloading. However, some companies are offering apps that are simple, user friendly, and provide customers with what they need. By understanding why, how, and when customers use the app, companies boost their relevancy and retention. All this sends the positive message that the customer is in charge. If you want to engage customers, start by asking what customers want and then follow through. #6. Do it for them. What’s easier than making a purchase on Amazon? The answer may be surprising: returning it. If you want UPS to pick it up, the instructions are emailed instantly, including when UPS will arrive with the return label in hand. No stress. No what ifs. It’s taken care of. Oh, yes, there’s a confirmation as to when the replacement will arrive. That’s not all. “Amazon Local Services” is on the way. If you make an Amazon purchase, they can arrange installation. If you need local professionals for home repair, automotive, lawn and garden, computer and electronics 22
THE BIG “I” VIRGINIA • Spring 2015
services, they’ll find and vet them. And the work is guaranteed. What customers want is to know that someone will “take care of it” and they can go about their business. #7. Keep them believing. Of all business dangers, losing your edge towers above all others. Joseph Jaffe points out in his online SPIN column that startups care more about customers than long-established companies and brands. “Here’s the thing,” he says. “There are no more ‘best practices’ without the ability to innovate, evolve and adapt.” He suggests ‘different practices’ or ‘new practices’ that lead both customers and competitors. Whether you’re large or small, the key to keeping customers believing is the same curiosity that drives startups and gives them their edge. It’s what customers are looking for. While we revel in the inspiration of what we think of as “great ideas,” it’s useful ideas that are powerful and make a difference to our customers. John Graham of GrahamComm is a marketing and sales strategist-consultant and business writer. He publishes a free monthly eBulletin, “No Nonsense Marketing & Sales.” Contact him at jgraham@grahamcomm.com 617-774-9759 or johnrgraham.com.
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THE BIG “I” VIRGINIA • Spring 2015
Spring 2015 • THE BIG “I” VIRGINIA
27
Scott Insurance a 2015 Best Place To Work In Virginia
S
cott Insurance was recently named as one of the 2015 Best Places to Work in Virginia, according to a statement from the Lynchburgbased insurance agency. The annual list of the Best Places to Work in Virginia was created by Virginia Business and Best Companies Group, the statement said. This statewide survey and awards program is designed to identify, recognize and honor the best places of employment in Virginia, benefiting the state’s economy, workforce and businesses. Awards were given based on evaluation of each company’s workplace policies, practices, philosophy, systems and demographics in combination with an employee survey measuring the employee experience. The 2015 Best Places to Work in Virginia list is made up of 100 companies. Hutch Mauck, President of Scott Insurance, a division of James A. Scott & Son, Inc., notes, “Our employees are our most valuable asset. It is an honor to receive this award, confirming our belief that, as a 100% employeeowned company, we have fostered a culture that empowers employees to control their own professional and personal destiny. Sharing in the pride of ownership and having direct responsibility for the company’s success engenders an intrinsically rewarding work environment.” About Scott Insurance: Established in 1864, Scott Insurance develops programs customized to the needs of mid-market companies. The firm offers property/casualty, employee benefits, captive insurance and surety bonds solutions, as well as personal risk services. An employeeowned company, Scott is one of the largest independent agencies in the Southeast, with offices in Virginia, North Carolina and Tennessee, as well as Captive Insurance operations in Grand Cayman and Vermont. For 21 years, we have earned the distinction of a Best Practices Agency and have consistently been ranked among the top 30 agencies in the country by Reagan & Associates. Most importantly, we are honored that we have a client retention rate of 95%. 28
THE BIG “I” VIRGINIA • Spring 2015
Want to partner with a reliable agency? Ready to sell your insurance agency? Want to retire, or sell part of your book? Or are you ready to expand your services and products? If you answered yes to any of these questions, contact me:
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Business Development Manager 302-299-4776 jdodds@aaamidatlantic.com
©2014 AAA Insurance
For more detailed information contact us by: Phone: 804-747-9300 or 800-288-4428 Email: members@iiav.com Or visit www.iiav.com and click on Products & Services Tab - Insurance Coverage for Your Agency - Data Breach Liability
Spring 2015 • THE BIG “I” VIRGINIA
29
HIGH MAINTENANCE
vs DIFFICULT EMPLOYEES
and how to deal with them!!
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THE BIG “I” VIRGINIA • Spring 2015
By Margaret Jacoby, SPHR (MJ Management Solutions, Inc) and Ted Szaniawski (HRGroup, LLC) DEALING WITH HIGH MAINTENANCE EMPLOYEES: It’s said that “Difficult Employees” are easy to spot, but before you assign that label to an employee, consider “Stewart”. As a candidate and as a new hire he was impressive, but now --- not so much. Stewart has become aggressive and lacks tact. He wants to take on too much, too soon, and his nervy tendencies irritate his co-workers and supervisor. He has even begun to get on your nerves. Stewart sounds like a difficult employee . . . but could he be a “High Maintenance” employee? Could he be challenging, but also a talented and valuable asset? Before you write him off, you should get to know him. High maintenance employees want to do things their way. They don’t respond well to being directed, but they can be coached and will respond well to options. For example, make sure that Stewart understands how his actions positively, or negatively, impact your operation. Avoid telling him what he can’t do or is doing wrong. Instead, find out what frustrates him about his work and consider what he suggests as an alternative approach. What he proposes must be acceptable to you, but keep in mind that by their nature high maintenance workers are innovative problem-solvers. High maintenance employees may be mavericks, but don’t overlook the reality that they are naturally resultsoriented high-achievers. Take a good look at the Stewarts in your organization. Evaluate them; uncover their work styles and their workplace motivators before you label them a difficult employee . . . you may be dealing with a high maintenance “gem”. But if Stewart is determined to be truly a difficult employee, there are steps that you can take. DEALING WITH DIFFICULT EMPLOYEES: Working with difficult people can be hard, but managing someone whose behavior clashes with your expectations can cause major tension. Experienced supervisors know that they must separate emotions from job requirements. Smart managers put their focus on tasks, projects and outcomes. Personal feelings cannot interfere, and all employees must be treated the same way. Too often, though, managers turn away from or ignore their least favorite employees. They avoid interaction with the employee and write them off, preferring to do the job themselves. This kind of avoidance is not only a management mistake, but can create legal problems for the employer. Difficult employees that frequently “bump heads” with management are the ones most likely to file lawsuits when they feel wronged. When faced with employees who don’t do what is
asked, it’s better to devise a strategy for making the best of the situation which can be potentially explosive. You can take the following steps to make it easier for them to comply: 1. Confront problems head-on. If you don’t like an employee, chances are they probably feel the same about you. Clear the air and acknowledge any ill will to help the employee focus on getting the job done. Make sure you do so in a space that is both safe and open and honest. Employees will only share critical views if they feel protected and empowered to do so. 2. Seek confirmation. When you give instructions, don’t assume you are fully understood. Ask the employee to explain what you said and what your expectations are for the job. The more clear everyone is on performance expectations, the easier it will be to manage the situation going forward. 3. Stick to behavior. Don’t let a person’s attitude or personality interfere with the job. Focus on describing the work and your expectations. If the attitude or personality is affecting their outcomes or performance, stick to describing those outcomes rather than focusing on the attitude itself. 4. Speak and Write. After explaining the assignment, have the employee confirm their understanding, ask questions and make suggestions – then follow up with e-mail or a memo to summarize the assignment and reinforce the deadline. Remember, people communicate in many different ways: following verbal with written confirmation ensures you are more likely to understand each other. 5. Talk on the employee’s turf. A practical way to encourage difficult employees to comply is to meet them on their own ground, not yours. Calling them into your office could instantly put them on the defensive. Instead, let the employee decide where he or she would like to engage in conversation. This gives them both control and a sense of security. While it may not be possible to transform a difficult employee into a friendly ally, if you follow the steps above, you are more likely to improve your relationship and enjoy the rewards of improved collaboration and performance. Margaret Jacoby and Ted Szaniawski are contributors for Affinity HR Group, LLC, IIAV’s affiliated human resources partner. Affinity HR Group specializes in providing human resources assistance to associations such as IIAV and their member companies. To learn more, visit www.affinityHRgroup.com. Spring 2015 • THE BIG “I” VIRGINIA
31
Reduce
AGENCY E&O EXPOSURES for
Mobile Devices
By Chris Burand
T
echnology provides solutions for better and faster service. It also makes communicating with clients easier. But sometimes, TECHNOLOGY MAKES COMMUNICATING WITH CUSTOMERS TOO EASY—AND TOO EASY TO FORGET ABOUT THE NEED TO DOCUMENT COMMUNICATION. This can create more errors & omissions exposures and leave agencies more exposed when defending E&O claims. Communication through handheld devices, such as texts and emails, is the biggest culprits. When producers use their devices to email or text clients, there is often no record in the agency management system. Most agencies fail to keep a record other than what may or may not be on a producer’s device, and they are relying on a producer to put the information on the management system. If that does not occur, the CSR will not know what is happening with the account. The good news is that technology also provides great solutions. Agency staff must be educated and some hard decisions must be made for the solutions to be implemented successfully. Here are a few important points to consider: • Some hardware devices can automatically integrate email from mobile devices to the agency’s systems. Integrating texts may or may not be possible. If not, prohibiting texts may be necessary, if they are not guaranteed to be saved in the agency management system. • 32
Someone must determine who owns the hardware. If the producer owns it, can the agency control it? This
THE BIG “I” VIRGINIA • Spring 2015
may means the agency prohibits the use of personal handheld devices for business purposes and purchases business use-only handheld devices. In addition, producers are required to exhibit more self-discipline, and they understand they will face severe consequences if they don’t. • The people involved need to understand the importance of privacy. Cell phones are more easily hacked than agency systems. Only non-private data should be transmitted by handheld devices—which may be a reason for choosing a particular handheld device and mandating uniformity in the handheld devices all producers use. •
The agency must mandate that communication sent or received by mobile devices—including personal devices—possess the same disclaimers as if the communications were sent to or received by the agency directly. Agency staff should add a disclaimer to cell phone voicemails stating that no coverage can be changed or bound simply by leaving a voicemail. This is another reason for having completely separate business and personal cell phones.
•
Communication from mobile devices is easily tracked in discovery. However, the actual communication may not be easily discovered. This leaves the plaintiff’s attorney plenty of room to imply the nature of the discussion and to point out the holes in the agency’s documentation
Spring 2015 • THE BIG “I” VIRGINIA
33
because it will be evident that a communication occurred, but a record does not exist, of what was said or written. The plaintiff’s attorney may even go as far as proposing that producers use their own cell phones for all communications they do not want recorded. Minimizing these exposures requires discipline and some hard decisions. An agency owner needs to ask: Is it worth the battle to mandate a simple, free solution like a disclaimer—which is accepted by nearly all agencies as being necessary for their phone system and defense—even if it inconveniences their producers’ friends who call the business cell phone? Is the battle for mandating a businessonly phone worth fighting? Or is it worth mandating that only emails can be sent because the agency’s hardware and software cannot integrate text messages automatically? All of these solutions are reasonable. The costs will vary, depending on the agency’s hardware and software, and its willingness to accommodate different people’s demands. The key is to get ahead of this now before the volume of lost emails, texts and voicemails grows even more voluminous. There is no telling how much documentation the agency has already lost. How much more can your agency risk losing?
Other Agency Mobile Devices Considerations For more practical information on how agencies can manage the use of personal devices in their agency, check out the following articles on Big “I” risk management website, E&O Happens ( iiaba.net/eohappens ) ~ •
“Bring Your Own Device (BYOD)—Opportunities and Risks” Provides a number of specific steps agencies should take before allowing employees to use personal devices for business purposes.
•
“Reality of Texting for Insurance Agencies” Offers steps agents can take to forward texts to email, so they can be sent to other agency employees and attached to the system. The article also explains how an agency can send texts to consumers from a business email account.
•
“Don’t Let Texting Create an E&O Wreck” Highlights the need for an agency policy handling texts and stresses the need for carrier communications to be documented.
Chris Burand (chris@burand-associates.com) is the founder and owner of Burand & Associates, LLC; In Pueblo, Co. This article was reprinted with permission from IAMagazine.
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INDUSTRY EXPERTISE. PERSONAL SERVICE. “At FCCI, we keep our customers informed. I get to know agents and policyholders and they get to know me, so they know who to call for help. They know I’ll give them great service!” Katrina Turner Senior Underwriting Technician FCCI Southeast Region Duluth, Georgia Now, let’s talk about your business. General liability • Auto • Property • Crime Workers’ compensation • Umbrella Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2015 FCCI
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BIV15_Turner_7.675x4.9.indd THE BIG “I” VIRGINIA 1•
Spring 2015
1/12/15 9:53 AM
Make-A-Wish Greater Richmond
Gives Teen a Boat
By Laura McFarland News Editor Richmond.com
W
hen it’s warm outside, 15-year-old Lee Payne V’s favorite place to be is in a fishing boat on the water. He and his friends like to take a johnboat out on a nearby 40-acre pond in Powhatan and fish for bass, catfish and brim. “I guess you could say it’s peaceful,” said Lee, a sophomore at Powhatan High School. Thanks to a wish granted through Make-A-Wish Greater Virginia, once the weather warms up again, Lee will be heading out into deeper waters on his new Tracker Bass Boat. Lee received the boat in a surprise ceremony on Tuesday, Dec. 9 at Bass Pro Shops in Ashland. Although he suspected he was being given his boat that night, he had no idea how much his wish granters had outdone themselves on his behalf. “I was kind of surprised it was that big,” Lee said. “I was thinking maybe they would get me a johnboat, not an 18-foot bass boat with an outboard motor.” Terry Payne of Powhatan, who had to know the size of the boat to bring it home in a trailer, said she and her husband, Lee Payne IV, were also thrown for a loop by the magnitude of the gift for their son. “Make-A-Wish is a wonderful organization. They help a lot of children fulfilling wishes and giving the children a chance to ponder things and have something to look forward to,” she said.
The family preferred not to discuss Lee’s medical condition, but Terry Payne said her son will start a new therapy in January with possible dangerous side effects. In 2012, the family was referred by Lee’s doctor to Make-A-Wish, which grants wishes for youth ages 2 ½ to 18 with life-threatening medical conditions. When Terry Payne received the Make-a-Wish application in the mail one day when her son was 12, she started to cry. “I interpreted Make-A-Wish as a bucket list,” she said. “My husband said ‘Look it up. It is to give kids something to hope for and look forward to. This is a good thing. This gives him something to look forward to get through this.’ “ Payne said her son has handled his illness and everything that has come with it surprisingly well. “He handles it better than I do. To hear him say it, it is what it is,” she said. Granting a wish Granting Lee’s wish was unique because it was the first boat request for Make-A-Wish Greater Virginia, which is based in Richmond, Sheri Lambert, president and CEO, said. The foundation required he take a boat safety course, which he completed this spring, which also added to the length of fulfilling the request. Spring 2015 • THE BIG “I” VIRGINIA
35
The family was assigned two wish granters, CeCe Grimes and Jessica Gray, who worked on the project throughout. The wish was sponsored by Independent Insurance Agents of Virginia with help by Bass Pro Shops, which also opened its showroom for the reveal ceremony, she said. “I think working in tandem with so many people stood out to me and knowing that this was his true wish – to be able to experience fishing more often,” Lambert said. Independent Insurance Agents of Virginia has a statewide young agents’ group that selected MakeA-Wish as an organization it wanted to work with, according to Robert Bradshaw, president and CEO. The group has helped with other wishes, but this is the first one close to Richmond. The night of the reveal, many of the employees were there to see Lee receive his boat and were carrying signs to encourage him. “Once Make-A-Wish met with Lee and determined what would be the appropriate wish, then we worked with them,” he said. “I think it is important that the MakeA-Wish foundation came up with the vision and we tried to make sure it worked.” Once they realized what was happening, many of
36
THE BIG “I” VIRGINIA • Spring 2015
the customers in Bass Pro Shops also lined up in the show room and started cheering and clapping for Lee, Mike Schum, group sales manager for Tracker Boat Center in the store, said. “It really was a great feeling to watch all these people who didn’t know him be so happy for him,” he said. He worked with Make-A-Wish to provide the boat for the teenager and was impressed with the shy young man, who was “polite and so grateful.” Make-A-Wish creates an unforgettable, life-changing experience for the children it serves in its mission to enrich the human experience with hope, strength and joy, Lambert said. She said she thinks they accomplished that goal with Lee’s wish. “It was incredible to watch his surprise and, I think, complete awe that this was happening. He didn’t show a lot of emotion. He was pretty speechless,” she said. Once he was more comfortable, he opened up more one-on-one and talking about how much he was looking forward to getting the boat out,” she said. Lee said he took the boat out once on Sunday, Dec. 14 on Powhatan Lakes with his dad and a friend just to try it out. Even though they thought it was too cold to catch anything, they still had a great time, he said.
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Spring 2015 • THE BIG “I” VIRGINIA
37
Kids’ Cars:
By Bill Wilson
B M B E M TI
An E&O
An agency insures both parties of a divorced couple with the same insurer, but on two different policies. The couple reside in two separate households and share joint custody of a 16-year-old son who is listed as a driver on the mother’s policy.
Q: “The father recently purchased a vehicle for the use of his son, so we added the son to the father’s policy and attempted to remove him from the mother’s policy. The insurer will not delete him as a driver from the mother’s policy since he also lives part-time with her. Is it correct that both parents should be charged for a youthful driver?”
The following exceptions apply:
A: “Your question begins with a rating issue, but the real issue is coverage. First, let’s address the rating issue. According to ISO’s personal vehicle manual:
Whether the insurer in question follows ISO rules to the letter is unknown. I’d provide this information to the underwriter and ask for the rating rule(s) they are relying on with regard to ‘customary operation’ of an insured auto under the mother’s policy, along with any surcharges. But based on the scenario you describe, rating is the least of your insureds’ worries. Under the ISO PAP, the mother’s policy will not cover the kid while driving the car his father bought. It will only cover him while driving his mom’s car, or possibly a non-owned auto not owned by him or furnished or available for his regular use. This means the son would only have coverage under his dad’s
‘Rule 5 - Safe Driver Insurance Plan B. Procedural Rules 2. Drivers subject to SDIP Classification The driving record of all drivers who customarily operate the autos being insured shall be used for the purpose of determining SDIP rating factors.
38
THE BIG “I” VIRGINIA • Spring 2015
No surcharges are assigned for the convictions, accidents or years licensed of: 1. A driver demonstrated to be a named insured or a principal operator of an auto insured under a separate policy. 2. A driver specifically excluded under a named driver exclusion.’
PAP. The potential big problem for mom is this exclusion in her ISO policy:
a. Owned by a “family member”; or b. Furnished or available for the regular use of a “family member”.’
staying with mom and has an accident that kills two people in another vehicle. Mom is sued based on parental liability, vicarious liability or several other possible grounds. Read the exclusion above—unless mom is maintaining or occupying the son’s car, her own auto policy will not cover her for the lawsuit. She only has coverage under the policy on which the son’s car is added (assuming ISO policy language). So she’d better make sure her son’s (or in this case, ex’s) policy has high limits like (hopefully) her own. The Big “I” national Technical Affairs Committee has asked ISO to revise this exclusion and the exception so that ‘you’ under the policy maintains coverage at least for the vicarious liability of ‘family members.’ For more information on these types of situations, check out ‘Joint Custody Insurance Issues’ and ‘Kids’ Cars and Divorce’ or search the Big “I” Virtual University for ‘kids kars’ and ‘parental liability.’”
If mom is sued when junior kills somebody in the auto insured under his father’s PAP, mom’s own policy would not cover her because of this exclusion. She only has coverage for such claims by her own policy if she is maintaining or using the auto. To further illustrate this issue, let’s say the kid is
Bill Wilson is director of the Big “I” Virtual University. This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email logon@iiaba.net to request login information.
‘B. We do not provide Liability Coverage for the ownership, maintenance or use of: 3. Any vehicle, other than “your covered auto”, which is: a. Owned by any “family member”; or b. Furnished or available for the regular use of any “family member”. However, this Exclusion (B.3.) does not apply to you while you are maintaining or “occupying” any vehicle which is:
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39
E&O Risk Management Considerations of
TRIA’s Expiration
T
he Big “I” Government Affairs staff recently provided a white paper titled Implications of the Expiration of TRIA to provide members with a better understanding of what to expect in the commercial property-casualty market. Dovetailing with the white paper, the Big “I” Professional Liability Program and Swiss Re Corporate Solutions are providing members with E&O risk management considerations relating to handling TRIA’s expiration. The below E&O risk management considerations may assist agencies in reducing E&O exposure while adding value to their customers. Agency E&O Risk Management Considerations: • Stay Informed – Watch for communications from your Big “I” association to keep current on the progress of legislation to reauthorize TRIA, and how it may affect your agency, customers, and carriers. Again, keep watch for updates and further news.
40
•
Carrier Reaction - Contact your carriers to learn how they plan to handle the delay, and to determine what communications they will make directly with policyholders and what information they are relying on your agency to convey. Carriers may choose to do nothing, or may choose to reduce, restrict, or even exclude terrorism exposures. New and renewal policies may not be handled the same and you can expect to see wide variations on policies placed through non-admitted carriers. There may be limited availability of stand-alone coverage to replace any reductions or eliminations of coverage.
•
Communication – Clear, consistent, written communication is key – not only to be sure customers are well informed, but also to provide your agency with strong E&O defenses. Be clear with your staff on any procedures your agency has chosen to implement on this issue, and update your agency’s written procedures to reflect any of these new processes. Remember, consistency is key!
THE BIG “I” VIRGINIA • Spring 2015
•
In-force Business – Follow the instructions provided by the carrier. If the carrier is reducing or eliminating coverage mid-term or at renewal and is required by regulations to notify its policyholders, we recommend you not interfere with that notification. Be aware that regulations requiring notification of changes in terms and conditions vary by state, and that non-admitted carriers are not necessarily subject to regulatory restrictions. If the carrier is not required to provide its policyholder notice of a change in terms or conditions mid-term or at renewal, you may consider whether that is something that you want to undertake. Once again, consistent written communication is key – to provide the best possible E&O risk management, you should follow the same process, in writing, with every customer.
•
New Business – Carriers may take a variety of approaches on TRIA, ranging from offering limited coverage to fully excluding the exposure. Be aware that non-admitted carriers are not restrained by regulations as to the limits, terms, and conditions of coverages
offered, and that carriers providing excess coverage (including umbrella coverages) are not obligated to follow form over primary policies. It is prudent E&O risk management to provide cover letters when delivering policies, advising your customers to read their policies and to contact you with any questions regarding coverage terms and conditions. •
Understand the Marketplace – Stand-alone coverage for terrorism may be limited. Carefully consider the agents’ standard of care in the states in which you are doing business before making a decision to proactively solicit your customers for stand-alone coverage. If you decide to do so, the recommended E&O risk management approach is to be consistent with all customers and to document all coverage offers and rejections in writing. Remember, consistency and written documentation are the key cornerstones of agency E&O risk management. For more information on the subject of agents standard of care or general E&O risk management information, visit www.iiaba.net/eohappens.
Few things in life are certain; change is one of those few. With change comes opportunity - to add value and build deeper relationships with customers. The expiration of TRIA on December 31, 2014, presents such an opportunity. Proactively communicating with your customers on TRIA not only strengthens your client relationships, but may also strengthen your agency’s E&O Risk management procedures. Reprinted with permission of Big “I” Advantage, Inc. and Swiss Re Americas. All rights reserved.
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Explore P&C insurance opportunities at HarfordMutual.com 800.638.3669
www.SIAofVA.com Scott McKee Vice President (540) 280-1119
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By John Chapin
M
What Makes a Successful Sales Meeting?
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THE BIG “I” VIRGINIA • Spring 2015
y friend Steve Lishanski has a saying that 80% of life is common sense but only 20% of people are using it. In my experience, a similar rule applies to sales meetings: 80% are a complete waste of time because simple common sense was never applied. Follow these rules for effective sales meetings and you will no longer find yourself in the 80%. THREE RULES FOR POWERFUL SALES MEETINGS Rule #1: Keep your meetings short, positive, and energized Most of the sales meetings I’ve been to are too long and when people leave them they are tired and deflated. In fact, recently I ran into a company having sales meetings on Friday afternoons because they felt it was a good way to wind down at the end of a long week. Ouch! Sales meetings should last for 60 to 90 minutes max and leave people upbeat and ready to tackle the week. Here are some more important components of this rule: • The meeting starts and stops on time. No waiting for people who are late and punishing those there on time. • Have an agenda and stick to it. People have 30 seconds, 5 minutes, or whatever time is appropriate, and at the end of that time, they are done, whether they are or not. • It’s fine to start by reviewing the numbers and congratulating people for important wins, but this should last no more than a few minutes. No getting bogged down in details aided by boring Power Point slides. • Everyone stays positive and upbeat. While constructive conversation about problems and issues is fine and encouraged, you must focus on solutions. If the room turns “all negative with no solutions”, it’s time to put the brakes on and get the focus back on what you can do about the situation. • No rambling or getting stuck in the weeds with minutiae of detail on items that are best handled off-line after the meeting. • No one highjacking the meeting and taking more than their allotted time. • No random vendors, who are not exclusive to your company, talking about the flavor of the week. • No boring heads from other departments droning on about their problems and what they need from sales. Also keep in mind that in order for the meetings to be positive, everyone must be present for each meeting barring some extenuating circumstance. You must have a team mentality and no individual is an exception.
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Rule #2: The most important part of the meeting is education Focus on the areas that have the most impact: prospecting, presenting, closing, and building relationships with your biggest and most important accounts. Here are some areas you may cover: • Brainstorming strategy to win an account • How to beat the competition • How to ask for referrals • How to cold call or prospect effectively • How to close more deals The objective here is to get the best stuff from your best people. Some people are great at referrals, others are great at cold calling, and others are great at closing. Also, it’s important that the successful people are talking. While we want to be respectful and inclusive, we don’t need to hear tips from someone who’s made one sale in the past nine months. Rule #3: Open and close the meeting the right way Logistically you want to hold meetings early on Monday morning to start the week off right. This best ensures everyone is in early and focused at the beginning of the week. Start the meeting with something short and positive. A positive quote or passage from a book is good. You can also have a weekly focus point. Another idea is to highlight
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something positive that may have happened recently. Next, cover the agenda in 15 seconds or less then bridge into the main part of the meeting. An effective way to close the meeting is to give everyone one or two action items that they can act on immediately. Here are some good examples: • Go call on that account you’ve been afraid to call on. •
Do something you haven’t done before or challenge yourself to break your previous best. For example, if the most prospecting calls you’re ever made in a week is 50, shoot for 75 or 100.
•
Identify and do the one thing that, once done, will ensure the whole week has been a success.
The key to effectively closing the meeting is to harness the energy created to take immediate action and get the momentum rolling toward a successful week. This will also help you develop the habits of stepping out of your comfort zone, facing your fears, and pushing yourself to become better. John Chapin is a sales and motivational speaker and trainer. For his free newsletter, or if you would like him to speak at your next event, go to: www.completeselling.com. John has over 26 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For permission to reprint, e-mail: johnchapin@completeselling. com.
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Independent Insurance Agents of Virginia 8600 Mayland Drive Richmond, Virginia 23294 P: 804-747-9300 / 1-800-288-4428 members@iiav.com www.iiav.com
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Douglas M. Palais, Esq, JD VANDEVENTER BLACK LLP dpalais@vanblk.com www.vanblk.com
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BIOGRAPHY Doug is a founding member of Park Palais. His practice focuses on complex securities matters, defense of insurance agents/brokers, and defense of law firms and lawyers. Doug is a seasoned, effective and influential advocate with more than 30 years experience in state and federal courts and before arbitration panels. He has defended significant, complex securities cases with hundreds of millions of dollars at stake. He has defended hundreds of insurance agent/brokers and legal errors and omissions claims. And he has been lead counsel in arbitrations throughout the country. His expertise includes defense of a broad range of professional liability and directors and officers liability claims. Before starting his own firm, Doug practiced for decades with nationally recognized law firms. He began his career as a judicial law clerk for the Fourth Circuit Court of Appeals. He has been selected
for inclusion in The Best Lawyers in America for Insurance Law and Securities Law and in Virginia SuperLawyers. He has also been named in the list of the Legal Elite by Virginia Business for appellate practice. Doug graduated from Northwestern University School of Law (1978) where he served as Notes and Comments Editor on the journal of Criminal Law and Criminology. Doug was also an instructor in legal writing at Northwestern. He earned his undergraduate degree magna cum laude from Lafayette College (1975). Doug teaches Insurance Law as adjunct faculty at Virginia Commonwealth University School of Business. Doug regularly writes and speaks on issues relating to insurance agents and brokers. He is also a frequent speaker for IIAV on professional liability, and regulatory matters. He also makes himself available to member agents in connection with legal problems.
DISTINCTIONS • • • • •
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Currently listed in The Best Lawyers in America for insurance law and securities litigation Currently listed as a Virginia Super Lawyer for insurance and securities litigation Adjunct Professor, Insurance Law, Virginia Commonwealth University School of Business, 2006 – present Instructor in Legal Writing, Northwestern University School of Law, 1977 - 1978 Notes and Comments Editor, journal of Criminal Law and Criminology, Northwestern University School of Law, 1977 - 1978
THE BIG “I” VIRGINIA • Spring 2015
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