Texas Connection - June 2014 by FYI Express

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Texas Connection

And Justice for All Make plans to attend this FREE CE seminar, earn 3 hours CE and experience how a real E&O trial would feel. There are many twists and turns in this classic “He said, She said” story. For example:

“Hollywood Nights” Costume Party Come dressed as your favorite Hollywood Star and maybe win $25 Gift Card sponsored by

Have you ever had a policyholder claim that you did not apply for the coverage requested? If yes, what did you do? What would you do in this scenario … A homeowner filed a claim for the loss of his prized baseball card collection valued at $25,000.00.

Thursday, June 5 at 7:00 p.m.

There was no special endorsement requested for the prized collection so only $500 in coverage is available. Homeowner swears he told you about the baseball collection. You deny the conversation. Policyholder files suit and your E&O carrier steps in to defend you.

What documentation does either side have to prove their story? What is the former agency employee going to say about actually overhearing the conversation between homeowner & agent? How is the fact that the former agency employee was having an affair with the agent who dumped her going to affect her testimony? Spurned lover, $25,000 and agent’s reputation at stake … what more could you ask for in this reallife drama? Oh, yeah … FREE CE, FREE Trade Show and FREE Hospitality Suites! Register for free at www.PIATX.org so we will have enough seats and refreshments on hand.

That’s the setup for “And Justice for All”, a 3 hour CE Mock Trial to be presented on Friday, th June 5 at Texas PIA Convention by Tom O’Connell of Gauntt, Earl & Binney, LLP.

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June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org Every carrier has its own guidelines on what they will inspect and there are very few carriers that inspect every location. In the event of a claim against your agency due to an error in the property limit, a defense used by most E&O carriers would involve bringing the carrier in and stating that they had either inspected the location or had a chance to inspect it, and that they should have advised your agency of a problem. This does have some merit, but a stronger focus on trying to calculate the “right number” upfront is preferred.

What is the right property limit? Not an easy question to answer, is it? by Curtis M. Pearsall, CPCU, CPIA Special Consultant to the Utica National E&O Program As I travel around the country and talk to agents at conferences and seminars, resolving the “right” property limit appears to be one of the top 5 issues agents face today. Whether for the building or contents coverage, it seems to be more challenging than one may think. The focus of this article is the commercial property exposure, and the problem is that the limit on the policy is not an area of concern until there is a claim – but by then, it’s too late to do anything about it.

A “Moving Target” For business new to your agency, take the time to secure the necessary data to perform the calculation. This should involve a visit to the location by the producer/agency loss control specialist to help secure the correct information. Take measurements and ask the necessary questions regarding construction. This will enable you to more accurately determine the Insurance to Value. DO NOT simply pull up the key input information from the current policy as this might not be accurate and will probably result in a questionable output due to less-than-quality inputs.

Many Approaches There are many approaches to securing a property limit. In no particular order: Using the company approximator tool. This could be one they designed themselves or one of the more common industry tools such as MSB. Using one of these is a good starting point and proper use should result in a quality output. However, incorrect inputs will result in questionable outputs. Ensuring that you have full and correct information is key. Without this, errors could occur. Whether it’s inputting an inaccurate square footage, picking potentially incorrect construction components or assessing the “quality” of the construction, this can lead to an output drastically off the “correct mark.” Just because you used a company “approximator” does not guarantee the carrier will honor that number. Will they turn their back on you? It’s happened before!

As you can imagine, there have been a significant number of E&O claims dealing with the policy property limits. For example: The client owned a bowling alley that burned to the ground and claimed the agent procured insufficient limits, resulting in a shortfall of $3 million. The agent stated that the client provided the figures for the building, and further said the client was advised they should consider using an appraisal service. The client said the agent affirmed the coverage amount was the proper coverage. The agent denied this. In that particular state, there is no duty to inform a client how much coverage they should have. The client made the argument that the agent assumed a duty (regarding limits) when he told the client the coverage was sufficient. This was a classic “word vs. word” scenario, with nothing in writing to back-up either side. The damages were also in dispute, as the client was claiming replacement cost value (RCV), even though the vacant lot was for sale. The claim eventually settled for $1 million.

Using the limit on the current policy. The problem with this approach is that it assumes the correct calculation was done by the prior agent. Asking the customer what limit they want. While there are some scenarios where this is not advisable, I believe commercial clients are more sophisticated regarding rebuilding costs than homeowners clients. Thus, this approach has a degree of merit. Assist them in understanding the terms unique to property coverage like co-insurance, Actual Cash Value, Replacement Cost, Agreed Amount, etc. Are there some agents/CSRs on your team that might struggle with explaining what these terms mean and what the impact could be in the event of a claim? It’s not a bad idea to include examples in your proposal on how these terms work. Relying on the customer to provide a limit seems like the agent may be shirking their responsibilities. At the time of the claim, if the customer does not receive full compensation, my guess is that they will not be very happy. Whether this results in a claim against you is difficult to say, but losing the customer is probably a given.

Lesson to be learned: Be careful how you respond if the customer asks you if their property limit is sufficient. In the event of an underlying claim where it is resolved that the limits were inadequate, the client will allege they relied on your advice to their detriment. Calculating the right property amount is somewhat of a “moving target.” Secure as much of the correct information as possible. The time you spend up front may just save you time later if you are hit with an E&O claim.

E&O Solutions Renewing your E&O every year isn’t much fun, is it? Don’t you want to make sure that you’re getting the best price for the best coverage you can get on your renewal?

Requesting that the customer secures a professional appraisal. This is probably the best overall approach. These cost money, but there is no doubt that they are worth it.

Why not compare with another company for your peace of mind?

Pulling the information from various Web sites. I do not suggest this approach as there is no guarantee that these sites reflect current and accurate information.

Using what you think is accurate, with the presumption that the carrier will inspect it and catch your “errors.” This is not a recommended approach.

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June 2014

2014 Convention Agenda All CE is FREE and sponsored by your favorite companies!

E-Z Registration You only pay for luncheons and / or golf. Register Online at www.PIATX.org Or mark on Page 5 the events you wish to attend, include your business card and mail with your check to: Joe Tipton, Texas PIA Membership Director P.O. Box 700877, Dallas, TX 75287

Thursday, June 5th

Attention: Golfers

8:30 a.m. - 11:30 a.m. “The Turning Point” … non-CE Join Merger & Acquisition Services for a preview of our Turning Point seminar. This workshop is for owners of agencies and, MGAs/MGUs who are currently considering buying or selling an agency or MGA/MGU, or would like to learn more about M&A transactions for strategic development, capital financing, and navigating the legal waters in M&A transactions. Industry professionals from the M&A, legal, and banking fields will be on hand to share their experiences and expertise with you. 8:30 a.m. – 11:30 a.m.: 3 hours Association CE Going Viral: Growing Awareness Through Media Get heard in this noisy world. Learn the fundamentals of branding and ways to promote your message online, through social media, and through traditional media channels. Emily Adams: Branding & promoting your business, cause, message, or group online and through social media.www.EmilyAdamsOnFire.com

Wednesday, June 4th 1:00 p.m. Scramble at Brackenridge Park Golf Course $75 per player

http://www.alamocitygolftrail.com/index.php/san-antoniogolf-courses/brackenridge-park

Carol Hargis: Generating publicity through traditional media, including writing and submitting press releases to newspapers and magazines, contacting local TV and radio outlets, etc.www.InsRecord.com

7:00 p.m. – 9:00 p.m. Free admission to everyone except company reps of non-participating vendors. Texas PIA Connections 2014 Invitation

more info at www.PIATX.org

11:30 a.m. - 1:00 p.m. "Agents' Choice for Excellence" (A.C.E.) Awards Luncheon

1:00 p.m. - 3:00 p.m. “Jerry Maguire- Show Me The Money” (1 hour C.E. Credit Available) Berwick Insurance Group presents: “Show Me The Money” in Medicare. Find out why Medicare is a must have addition to your portfolio. With lifetime renewals and 78 million ‘Baby Boomers’ becoming eligible in the next 20 years, you can’t afford to pass up this opportunity. 3:00 p.m. - 4:00 p.m.

Friday, June 6th

“Sneakers” … Everything you need to know on how to protect your agency and commercial clients from cyber hacking

8:30 a.m. - 11:30 a.m.

1:00 p.m. - 4:00 p.m. "Fundamentals of Flood Insurance Level I" (3 hours CE Credit) -NFIP Overview -Key Elements for Writing Flood Insurance -Elevation Certificate -Flood Application -Coverages -Renewals, Endorsements, and Cancellations -Claims Sponsored by: Mendota & American Bankers Insurance

Jon Archer of Great American Insurance Company explains the key differences between workers’ compensation and nonsubscription in a way that makes attendees comfortable communicating the option with their clients. Attendees will learn the primary concerns of employers considering non-subscription and how to respond to those concerns. Attendees will learn how to evaluate different non-subscriber programs and insurance offerings. And who makes a good nonsubscriber candidate, and how to present the option to potential clients. Upon completion of the class every attendee will be able to knowledgably discuss the option with a client.

2:00 p.m. - 3:45 p.m. Exhibitor Move-In

10:30 a.m. - 11:30 a.m. “The Art of Arbitration” … 1 hour CE Class This Arbitration presentation will provide the audience with a detailed synopsis of the current case law affecting various causes of actions and claims of employees, consumer and companies. It will also offer information over how the Arbitration process operates and what it covers. Presented by Jerry Fazio of Owen & Fazio

4:00 p.m. - 7:00 p.m.

8:30 a.m. – 10:30 a.m. “Ethical Insurance Dilemmas” 2 hours Ethics CE "Hollywood Nights" Trade Show

What would YOU do in these situations sponsored & presented by Aggressive Insurance?

Free admission to everyone except company reps of nonparticipating vendors.

10:30 a.m. – 11:30 a.m.

Dress as your favorite Movie Star & be eligible for cash drawing at Trade Show and Hospitality Suite.

Everything you need to know about Web Marketing & Social Media

7:00 p.m. - 9:00 p.m.

Hospitality Suite Hosted By Berwick Insurance Group - Details will be given at the presentation http://marketingmedicare.com/sell-medicareadvantage-plans/

“The Invisible Agency” – 1 hour Association CE

11:30 a.m. - 1:00 p.m. "Officer Installation & Awards" Luncheon

1:00 p.m. - 3:00 p.m. Hartford Flood: New Flood Insurance Changes – What you need to know (non-CE) Biggert – Waters 2012 overview Most Recent updates

4:00 p.m. - 6:00 p.m. "Hollywood Nights" Trade Show Free admission to everyone except company reps of non-participating vendors. 6:00 p.m. Exhibitor Tear-Down

Flood rating changes

7:00 p.m. - 10:00 p.m.

Q&A

Riverwalk Cocktail Cruises.

"What's the harm in a little water?" flyer Sponsored by Hartford Flood and taught by Tom Langmead Regional Sales Director thomas.langmead@thehartford.com

Get your free ticket from Aggressive Insurance 7:00 p.m. - 9:00 p.m. Hospitality Suites open to everyone except company reps of non-participating vendors.

www.hartfordfloodonline.com

3:00 p.m. - 4:00 p.m. “I’ll Make You a Star!” (1 hour Association CE) Want to know how to create a promotional / instructional video for your agency? Eddie K. Emmett shows you how easy it is to do it!

1:00 p.m. - 4:00 p.m. “And Justice for All” … This mock trial has many twists and turns as it reaches for a verdict on how much homeowner’s insurance was requested by the applicant. Presented by Tom O’Connell Gauntt, Earl & Binney, LLP

Saturday, June 7th 8:30 a.m. - 11:30 a.m. “The Hunger Games” … CSRs are welcome to attend for free and learn the latest techniques in finding and capturing clients. Earn Association CE

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org They are very proud of it, and they tell the world about it, thereby educating the consumer on what really good customer service looks like. As a result, customers hope to get this level of service from all of the companies they do business with. That just makes it harder for companies that aren’t quite as customer focused, and that is a good thing. Companies that really want to compete and stand out are being forced to raise the bar and give customers a better experience. It can only be good for customers – and good for business. So, how does a company begin to not just meet, but exceed the customer’s expectations? How do they raise the bar? A good start is to identify the typical customer’s journey. Determine all of the main touch-points or frontline interactions. Think of each of these interactions as a link in a chain. If there is a weak link, figure out a way to strengthen it to eliminate or mitigate problems and customer complaints. Look at the strong links and determine what might be done to make them even stronger. At the same time, take a look at what is happening behind the scenes to support these front-line interactions. The systems and people behind the scenes can make or break the front-line customer experience.

Is Customer Service Getting Worse? “Customer service isn’t getting worse. Customer service is getting harder.” This was the message that Barak Eilam, the CEO of NICE, a technology company focused on customer experience solutions, shared with an audience of customers at the recent NICE Interactions users conference in Las Vegas. How profound. And, he’s right. Surveys in the customer service world are coming back and indicating that customers perceive customer service to be worse than last year. W.P. Carey School of Business at Arizona State University finds that in 2013 customer problems climbed to 50% from 45% in 2011 and 32% in 1976. Yet, at the same time companies are marketing and bragging about how they provide great customer service. Here’s my take. The customer is smarter than ever when it comes to customer service.

There is no doubt that some companies aren’t good at delivering customer service. But what about the ones that try, yet fail? Is it that they are bad or getting worse? Maybe not. Maybe they are failing because the bar has been raised and the customer is expecting more. Maybe it’s just getting harder. Shep Hyken is a customer service expert, professional speaker and New York Times bestselling business author. For information contact (314)692-2200 or www.hyken.com. For information on The Customer Focus™ customer service training programs go to http://www.thecustomerfocus.com. Follow on Twitter: @Hyken (Copyright ©MMXIV, Shep Hyken)

Saturday, June 7th 8:30 a.m. - 11:30 a.m. “The Hunger Games” … CSRs & Agents are welcome to attend for free and learn the latest techniques in finding and capturing clients.

The best companies are becoming benchmarks for others to aspire – not just in their own industry, but across all industries. Companies such as Apple, Earn Association CE Amazon, Zappos, Ace Hardware, Ritz-Carlton, Nordstrom and others are consistently top performers in the world of customer service. Texas Connection Page 6

June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

How Much Should You Pay Summer Interns? Q&A

Conde Nast Publications, Donna Karan, Warner Music, and several other high-profile employers also have been targeted by class action lawsuits alleging they failed to pay hundreds of interns wages owed under the FLSA. Conde Nast (which includes publications such as Vogue, Vanity Fair, and The New Yorker) has responded by eliminating its internship program entirely. (In fact, the same law firm filing claims against Hearst also filed the class action suits against Fox Searchlight and the Charlie Rose show. You can check out the firm’s Web site chronicling the lawsuits, and trolling for new plaintiffs, at http://www.unpaidinternslawsuit.com.)

By Robin Thomas, Managing Editor It’s summer intern season once again, and you may prefer to hire a student who will work for less than the minimum wage or even for “free.” But, the DOL has very specific requirements for unpaid interns and allows only certain employees to be paid a subminimum wage. In addition, plaintiffs’ attorneys are pursuing employers that do not pay interns properly. Make sure your organization does not become a target for an intern lawsuit.

Here is a review of the FLSA’s requirements. Under the FLSA, you generally must pay nonexempt mployees the minimum wage and overtime for all hours worked over 40 in a single workweek. The current minimum wage is $7.25 an hour. However, under special circumstances, employers may pay certain employees less than the minimum wage. For example, the FLSA allows employers to pay subminimum wages to employees under the age of 20 (the “opportunity wage”) and to certain students and disabled employees. In addition, the FLSA does not require any wages paid to individuals who meet the criteria for “trainees” and bona fide “volunteers” since they are not considered your employee.

Q: We are planning to hire several summer interns but are not sure what we should pay them. We have read several articles debating the use of unpaid interns, but feel that our interns would be getting significant experience and a “leg up” in this field so would like to offer them stipends but not minimum wage or overtime. Can we do this? A: Not unless you can meet the Fair Labor Standards Act (FLSA) very specific requirements for unpaid interns or subminimum wage employees. If you do not meet the criteria, you could be facing class action lawsuits, corporate penalties for FLSA violations, and even personal liability for your decisions.

The FLSA permits employers to pay an “opportunity wage” of $4.25 per hour to employees who are less than 20 years old for a limited period of time. This opportunity wage may be paid during the first 90 calendar days after hire. The FLSA also protects current employees by prohibiting employers from taking action to displace employees, including reducing hours, wages, or employment benefits, for the purpose of hiring workers at the opportunity wage. See 29 U.S.C. §206(g); 29 C.F.R. §786.300. (Note that this opportunity wage of $4.25 was created in 1996 and was not raised with the last increases to the minimum wage. It is not indexed to the current minimum wage, and no changes have been proposed to increase the amount.)

(Download free Employee Classifications model policy including HR best practices and legal background.) As it sounds like you are aware, unpaid internships have been under increased scrutiny recently, and this trend will continue. Employers generally do not have to pay certain interns and trainees under the FLSA, but these individuals must meet strict criteria to forgo minimum wage and overtime that would otherwise be due to employees, including that they may not displace any regular employees and that the employer may not derive any immediate advantage from the activities of the interns. (More on these criteria, below.) The Department of Labor (DOL) started stepping up its enforcement efforts to target unpaid interns about four years ago.

The FLSA and its regulations also allow you to obtain a special certificate to hire certain other individuals at wages that are lower than the minimum wage. However, these certificates are available only in limited circumstances, and employers are restricted in the number of employees that may be hired under these provisions.

And it is not just the DOL that you have to worry about. Plaintiffs’ law firms also view these intern misclassification cases as highly profitable and have filed several high profile class action suits. In June 2013, a New York federal court determined that Fox Searchlight misclassified employees working on two movies as unpaid interns, and in December 2012, the Charlie Rose show settled for $250,000 with 189 interns.

Texas Connection

The following types of individuals may be hired for less than the minimum wage: Continued on page 10

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NEW MARKETS... HIGHER LIMITS… MORE CLASSES OF BUSINESS Southeast Surplus has added several new commercial lines markets that have given us additional capabilities. Some of our enhancements are:  Single policy property limits of up to $10,000,000  Excess liability limits up to $10,000,000  Special programs for churches, restaurants & bars, convenience stores, roofers, barber shops, and beauty salons  Liquor liability can be packaged with the appropriate classes Some of the classes of business that have been added or enhanced are:       

Apartments Artisan contractors Barber shops & beauty salons Bars & Taverns Bowling alleys Churches Convenience stores and grocery stores

  

   

Family entertainment centers General contractors Hotels & motels - including business class hotels Restaurants Retail stores Skating rinks Warehouses

Call Diane Dunlap (ext. 714) or Cathy Johnson (ext. 731) at (800) 554-3301 with any questions. Applications can be faxed to (409) 924-8282. Email applications to them at ddunlap@ssuga.com or cjohnson@ssuga.com. P. O. Box 3730 Beaumont, TX 77704-3730  www.ssuga.com  (800) 554-3301  (800) 222-2329 - fax

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

How Much Should You Pay Summer Interns? Q&A Continued from page 8 1. “Full-time students” (discussed below) employed in retail and service establishments and in agriculture may be hired for a wage that is at least 85% of the current minimum wage;

2. Students over the age of 16 who are enrolled in an accredited school, college, or university and who are employed in an approved vocational training program (referred to as “student-learners”), may be employed in an occupation requiring a substantial learning period at a wage that is at least 75% of the minimum wage; and 3. Individuals whose earning or productive capacity

is impaired by age, physical or mental deficiency, or injury, also may be employed at a reduced wage that is related to the individual’s productivity. See 29 U.S.C. §214; 29 C.F.R. §§519, 520, and 525.1 et seq.

A “full-time student” is a student who receives primarily daytime instruction at the physical location of an educational institution and who is considered by the institution to be a full-time student. There is no maximum age restriction on qualification as a full-time or vocational training student. However, child labor laws require that full-time students must be at least 14 years old to be employed in retail and service establishments. Full-time students may be employed only on a part-time basis and not more than twenty hours in any workweek, except during vacation periods. Furthermore, they may be employed only after the employer has certified to the Secretary of Labor that the employment of students will not reduce the full-time employment opportunities of nonstudents. See 29 U.S.C. §214(b)(4); 29 C.F.R. §519.2. An employer that wants to hire a full-time student, student-learner, or a disabled person for less than the current minimum wage must file an application for a special certificate with the DOL. See 29 C.F.R. §§519.3, 520.501, and 525.7.

4. The employer that provides the training does not derive any immediate advantage from the activities of the trainees/interns, and on occasion its operations may be impeded; 5. The trainees/interns are not necessarily entitled to a job at the conclusion of the training period; 6. The employer and the trainees/interns understand that the trainees/interns are not entitled to wages for the time spent in training. See, e.g., Wage Hour Admin. Op. Ltr., FLSA 2004-5NA (5/17/04); Wage Hour Admin. Op. Ltr. (5/8/96), and WH Fact Sheet 71 (“Internship Programs Under the Fair Labor Standards Act,” http://www.dol.gov/whd/regs/compliance/whdfs71.htm). Not all courts agree that trainees/interns must meet all six factors. In Reich v. Parker Fire Protection Dist., 992 F.2d 1023 (10th Cir. 1993), the Tenth Circuit determined that even though an employer’s trainees expected to be hired at the end of the training, because they met the other five factors they were not employees subject to the FLSA. The court said that although the DOL’s six criteria are relevant to determining whether an individual is a trainee or an employee, not all of the criteria must be met. And other courts have applied a “totality of the circumstances” test with no single factor controlling. So, for example, in Glatt v. Fox Searchlight Pictures Inc., 2013 U.S. Dist. LEXIS 82079 (S.D.N.Y. 2013), the court granted summary judgment to two interns and found they should have been classified as paid employees. Using the DOL’s six factors and considering the totality of the circumstances, the court found that the interns did not receive any training or education to help them acquire new skills during their internship. The benefits such as resume listings or job references were simply incidental and the internship primarily benefitted the employer not the interns, and the interns did work such as basic administrative tasks (organizing files, photocopying, and running errands) that otherwise would have been done by regular employees.

It also is possible that if your interns meet the definition of “trainees,” you may not have to pay them. According to the DOL, an individual may be considered a “trainee” or a student and not an employee entitled to minimum wage and overtime under the FLSA if all of the following six criteria are met:

In addition, trainees/interns may be paid a stipend and still not be considered employees as long as the stipend does not exceed “the reasonable approximation of the expenses incurred by the interns involved in the program.” See Wage Hour Admin. Op. Ltr. (5/8/96). However, the DOL’s opinion letter does not explain what expenses a stipend may cover and still be considered reasonable.

1. The training/internship the person receives is similar to that which would be given in an educational environment; 2. The training is for the benefit of the trainees/interns; 3. The trainees/interns do not displace regular employees but work under their close supervision;

So, if the interns are receiving training that benefits them, rather than the employer, and the training furthers their educational goals, the DOL typically will not consider them to be employees. Similarly, if the interns receive academic credit for their work, they likely will not be considered employees. Continued on page 12

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org How Much Should You Pay Summer Interns? Q&A Continued from page 10 In addition, these interns may be paid a stipend and still not be considered employees as long as the stipend does not exceed a reasonable estimate of the students’ expenses.

Aggressive Insurance will be presenting a FREE 2 hour Ethics CE on Friday morning at the Texas PIA Convention. Here’s a sample of your real-life Ethical Dilemmas:

On the other hand, if the interns are doing work normally performed by other employees and receive little supervision or training, and the employer gains an immediate benefit from the students’ work, they probably should be treated as employees under the FLSA. Because these requirements are complex and since unpaid internships are subject to scrutiny, you should err on the side of treating summer interns as employees and pay them accordingly. You should be aware, too, that recent court decisions interpreting the FLSA have found that the individual decision-maker can be personally liable for any violations under the Act. In other words, you could be personally responsible for any back pay and other penalties. So, if you want to treat interns as nonemployees or pay them using the subminimum wage exceptions, you should consult with legal counsel to ensure you are complying with the FLSA’s requirements. Content for your HR Matters E-Tips newsletter is developed from our flagship publication, the HR Matters Tools and Resource Center, featuring the Personnel Policy Manual System (PPMS). See how it works. YOU CAN TRUST PPS Information provided in HR Matters E-Tips is researched and reviewed by the HR experts at Personnel Policy Service as well as employment law attorneys. However, it is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice. Interested in using an article from HR Matters E-Tips on your Web site or in a newsletter? Please contact Robin Thomas, Managing Editor of Personnel Policy Service, Inc., to request permission. You can contact her by email at editor@ppspublishers.com. Please note that the information in every issue of HR Matters E-Tips is the original, copyrighted work of Personnel Policy Service, Inc., and is protected under U.S. copyright laws. As such, you may not reprint or publish in any format any article or portion of article from HR Matters E-Tips without the express permission of Personnel Policy Service, Inc.

You overheard the conversation your co-worker had with one of the agency’s insureds and cannot believe what you heard said. The insured had called up to tell the CSR that they were renting out their home for a year and traveling through Europe. Your co-worker told them he was not going to tell their Homeowners Company because it could raise their rate or worse…the company may cancel the policy if they find out. Better not to say a word! How should you handle this situation? 1. Confront your co-worker and tell him he made a mistake and was wrong in giving this advice 2. Let the agency manager/owner know the types of communications the CSR is having with his clients 3. Make certain that the CSR calls the insured back AND inform them that you must report what is happening 4. All of the above Your insured has been a long time customer and you have always checked the MVR’s on their new drivers and checked their existing driver’s records every year. The agency has adopted a strict policy not to maintain or communicate information to the insureds as relates to the driver’s records. The CSR handling the account wants to maintain her relationship with the customer and provide good service, what should she do. 1. Continue to verbally tell the customer the information about the driving records 2. Send a copy of the MVR on the sly and don’t tell anyone at the office 3. Set up a “code” with the customer so that they will know if the drivers have a clean record or items on their record, such as “it is a go with Robert Brooks”. 4. Follow the rules and do not communicate private information to the insured. Advise them that they should get a signed authorization from all of the drivers to run the records as a condition of employment and continued employment. Advise the client that they should have their drivers provide them with a copy of their records each year. The answers will surprise you!

Remember, too, we encourage you to pass along any issue of the E-Tips by forwarding it to friends and colleagues. Texas Connection

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June 2014

Texas PIA is pleased to announce that we are partnering with Berwick Insurance Group to bring members some new products that should increase your average commission per sale. Berwick is one of the leading Medicare brokers in the United States, and will assist members training and marketing Medicare products. They will also be joining us in June 2014 “Hollywood Nights” Convention and Industry Trade Show. WHY SELL MEDICARE PRODUCTS? Medicare is a “must have” product 3.1 million Texans are Medicare eligible Another 208,000 people turn 65 this year Incredible cross-selling opportunity to your current book of business Medicare is a door-opener product & can bring in new clients for your other business lines High Commissions with lifetime renewals on many plans

MEDICARE MISPERCEPTIONS FALLACY

FACT

“Hard to Certify”

Requires less than 8 hours per year!

“Lots of Maintenance”

Requires VERY LITTLE customer service once plan is in place! NOT the ACA!

“Hard to Market”

Marketing to your current book of business gives you an advantage & alleviates initial marketing costs!

“Too Many Agents Already Selling Medicare”

Not enough contracted agents to help the millions of Americans who need/want Medicare plans.

“Can Only Sell One Time Per Year”

Medicare is a year-round product

GET MORE INFO TODAY: Call: Michael Lang at Berwick Insurance Group: 888-745-2320 x 7138 Email: Michael@berwickinsurance.com and say “I am with Texas PIA” Contact: Joe Tipton at TPIA: 972-862-3333 or joe@piatx.org

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Cyber Liability, Your Agency & Your Clients It seems every day some business gets hacked and their data exposed to the world. It’s no secret that identity fraud and data breaches of the personal information held in trust by you or your customers are becoming a huge exposure. In fact, most of the associations tracking these crimes have stated that small businesses have become the target of choice for hackers and fraudsters. And, “Nearly six out of ten (59%) of SMBs do not have a contingency plan outlining procedures for responding and reporting data breach losses” — National Cyber Security Alliance and Symantec Small Business Survey How it happens…

Our new Cyber Program will provide you with a strong response. It offers a streamlined underwriting approach without a long detailed application. We can link your agency to an automated platform that describes the coverage and processes quotes, binders and policy issuance. Our carrier is a market leader in this class and offers a competitive product, with limits, SIR’s and underwriting guidelines specifically tailored to the SMB market segment. We’re offering this program to our members to be used in two ways… First, protect your own agency. You have data and data risks and need comprehensive and affordable protection. Think of all the personal information you have on clients and prospects. What would you do if you suffered a data breach? Simply go online and purchase. Limits are up to $1 million. All documents are issued instantly. Take advantage of these risk management tools right away.

Lost or stolen laptop, unsecure smart phones, or hacked systems Fraudulent purchase orders used to buy goods in the company name ID Thieves who impersonate the company to collect account receivables A disgruntled former employee selling the personal information of your customers. Why are small businesses targets? Credit limits are higher than most individual victims Lack of formal internal data security used by larger companies Businesses control large amounts of Personal Identifying Information of others (credit card transactions, file records, customer and employee data) Delayed reaction times to discover a problem The consequences of fraud or a breach... Financial loss and damage to credit ratings Negative impact on future revenues Damage to the company brand and reputation. Loss of customer confidence and loyalty Disruptions with vendors and suppliers We are pleased to announce a new strategic alliance to provide all of our members with a Cyber Liability program specifically designed for your small to medium sized customers. Texas Connection

Visit www.goagents.com/PIA. Next, protect your clients All of your SMB customers are at risk, and the exposure to a small business can be devastating. Not only will you add value and help protect your clients, you will strengthen your relationships, deliver the optimal or “best deal” available and reduce your own E&O risk along the way. Leave the administration and fulfillment our new program partner while you build a new source of incremental, recurring revenues. SMBs having less than $10MM in revenue and 50 or less full time equivalent employees automatically qualify for our pre-pricing – the quotes are already live. Simply bind and print. (For data risk liability, select the Core Cyber™ program. To add business identity protection/business identity insurance, monitoring and alerts, choose SB Core Protector which is the flagship program providing the most comprehensive protection, i.e. cyber liability, business identity, employee identity coverage and more…) Many experts agree that when it comes to SMB ID Theft and Data Breach exposures it’s not a case of ‘if’, but ‘when’. Don’t run the risk of becoming victimized without the proper coverage, and take steps to point out these exposures to all of your SMB customers. We encourage you to check the link to the program to learn more and make this coverage part of your new and renewal placements. In today’s market these data risks are simply too serious to ignore. Free Cyber Liability CE seminar on Thursday afternoon at Texas PIA Convention. Page 14

June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org “Asking Customers the Right Questions” is built on a proven strategy successful agencies are already using to enhance both growth and profitability. “Claim Alert Lead Program” focuses on both retention and lead generation. It is directed toward an agency’s current homeowners clients. “Conducting a Young Driver Seminar” is designed to help enhance an agency’s overall image not only with their current customers, but potentially with everyone in their community. Each of these approaches is comprehensive and includes a series of guides and step-by-step instructions for implementation by an agency.

The PIA Partnership Unveils New Tool for PIA Members “Closing the Gap – Growth & Profit” Now Available Online WASHINGTON – A new tool designed to help independent insurance agencies achieve growth and profitability has been unveiled by the National Association of Professional Insurance Agents (PIA) and its agency-company council, The PIA Partnership. “Closing the Gap – Growth & Profit” provides agents with calculators to help agencies project and plan for new business growth and profitability on a 5 year basis. Current PIA members are able to access the tool on a newly redesigned website at http://agency-growthprofit.com. “This latest tool is of great value to PIA members as they seek new ways to ensure their success,” said PIA National President John G. Lee. “The cutting-edge projects of The PIA Partnership are critical to the success of both the companies that market their products through the American Agency System and the PIA agents who represent those companies.” Agencies using this new tool begin with calculators created for use with Microsoft Excel to help insure ease of access and adaptability for agents. Agencies can also project auto and homeowner premium and commission by customer type – comparing various ways in which their own retention rates, premium rates and commissions factor into agency profitability. Since results from these calculator tools are not static, agencies can create “what if” scenarios and improve their bottom-line results by adjusting factors including improved retention, increased sales goals and ramping up account-rounding activities. Agencies are then offered three turn-key approaches for use in their own agencies which have been developed by The PIA Partnership based on survey input received from PIA leaders earlier this year: Texas Connection

Closing the Gap for Growth and Profitability is adaptable and customizable from start to finish. By first using an agency’s own current results and projections, agency principals identify areas of opportunity. They’re then able to use the tools and approaches that are right for them and their agency. These new Partnership tools are designed to help agencies close the gap – to maximize growth and profit. Meanwhile, The PIA Partnership has announced its annual project for 2014. Agency Touch Points – The Voice of the Customer: Commercial Lines will conduct a nationwide survey of commercial lines customers to determine their buying preferences. It will be the followup to The PIA Partnership’s groundbreaking 2012 study, The Voice of the Customer: Personal Lines. “The enthusiasm of our carrier partners for the important work of The PIA Partnership has produced groundbreaking research and the development of tools that provide at-the-desktop value to PIA agency principals and the carriers they represent,” said PIA National Vice President/Treasurer Rob Hansen, representative of the PIA National Executive Committee to The PIA Partnership. “PIA greatly appreciates the commitment of our carrier partners and we look forward to many more years of close collaboration.” The PIA Partnership, originally established as the Company Council of Executive Officers (CCEO) in 1996, is a group of insurance companies that share resources and work closely with PIA National to conduct research and develop tools and resources designed to benefit professional independent insurance agents. Current PIA Partnership companies include: Encompass Insurance; Erie Insurance; Harleysville Insurance; Liberty Mutual Insurance; MetLife Auto & Home; Progressive Insurance; Selective Insurance Group; State Auto Group; The Central Insurance Companies; The Hanover Insurance Group; The Hartford; The Motorists Insurance Group; and Travelers. Register for free Association CE at www.PIATX.org

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June 2014

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

THEFT OF ACCOUNTS By Al Diamond www.AgencyConsulting.com What to Do When A Producer Departs - With Your Accounts A wise person once said that the real crises in life are not those about which we worry, the real crises tend to arise out of the blue on a Tuesday afternoon when you are generally feeling pretty good about life. That is when the call came in from the agency – referred by his association.

Have you been thinking about buying or selling an insurance agency and don’t know what is a fair price?

“Mr. Diamond, we have just lost our key producer and do not know what to do!”

Simply put, Fair Price is when both parties agree and not under undue stress.

My first question in this case was exactly the same as it has been in the last 20 such calls.

But nothing is ever that simple.

“Did you have an employment contract?”

Texas PIA has a checklist of 99 items you should consider in evaluating the value of an agency.

When an employment contract has not been executed with valid non-competition clauses, I tend to get a sinking feeling. Perhaps we can still work with the client to save his business. After all, the producer sold the business as an employee of the agency and the agency has serviced, marketed and administered the account, not the producer; but we have lost the contractual “high ground” that makes retention or pursuit of damages much easier.

Members may download it for free but I’ll give the secret link to all attendees to “The Turning Point” seminar on Thursday morning at Texas PIA Convention. Thursday, June 5th 8:30 a.m. - 11:30 a.m. “The Turning Point” …

Understand here that all non-competes must be “reasonable” in all respects in order to be enforceable. They are to be no longer, broader or tighter than minimally necessary to protect the value of the agency.

Join Merger & Acquisition Services for a preview of our Turning Point seminar. This workshop is for owners of agencies and, MGAs/MGUs who are currently considering buying or selling an agency or MGA/MGU, or would like to learn more about M&A transactions for strategic development, capital financing, and navigating the legal waters in M&A transactions. Industry professionals from the M&A, legal, and banking fields will be on hand to share their experiences and expertise with you. Related Articles Why Value Your Agency Debunking Agency Multiples Calculations

In this case, the agency had executed an employment agreement with the producer when he was first hired over ten years ago. That led to the important second question, “Was the Non-Compete and/or NonPiracy Clause territorial, or pertaining to a stated book of business?” So many agencies still have contracts that are territorial as well as time sensitive. They state that an employee cannot compete within a specified area (25 miles, a city, county or stated territory). Unfortunately, the courts have generally not agreed to the validity of territorial non-compete clauses. The general principal accepted by the courts is that you cannot totally prevent a person from continuing his career in his chosen field (his “trade skills”) in the area in which he resides or with which he is familiar – unless you pay them a lot of money for it, such as to the seller of an agency.

Continued on page 20

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June 2014

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Free Micro-Mobile Site & QR Code Marketing Strategy. Scan this QR Code for a current example. This could be your agency! $349.00 Value! Free 30 second Agency Promotional Video. Click here to enjoy the one I created for Texas PIA Connections 2013. This could be your agency! Free Customizable Business Forms: These documents are free to download and customize for your own professional use. Free Mentoring: Whether you are a start-up or an existing business, our mentors will help you reach customers and achieve your goals with confidential, valuable advice. Free Small Business Handbook: Everything you need to know to run your business, from equity to employees. Free Marketing Templates: Sets of templates with a coordinated design including letterhead, envelopes, business cards, brochures, etc. Free Office Poster Software: Templates to create your own custom office posters, all without any knowledge of design or graphical skills needed.

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Theft of Accounts

It appears (whether right or wrong) that the producer would have jeopardized his job if he did not sign away his competition rights.

Continued from page 18 The best non-compete terms involve a prohibition from “directly or indirectly soliciting, accepting, servicing or otherwise diverting” those active accounts that the producer produced during his employment at the agency. Furthermore, that type of “non-piracy” clause prohibits the producer from soliciting any other policies or clients that are active in the agency, were active in the last year, or were solicited in documentable fashion by him or anyone else in the agency during the last year.

It’s also advisable to keep a time line and give them at least a week minimum to review and contract and have it gone over by their own attorney if they wish; you do not want to be accused of coercing them into signing without the benefit of counsel. The producer in this case signed the contract as a condition of employment, so we were safe so far. “What’s the problem?” I asked. It seems that the employee joined another local agency and suddenly our client was facing a flood of BOR (Broker of Record) letters, surprise non-renewals and clients who would no longer return our agent’s phone calls.

Of course, the clause extends to any type of involvement or association by him with an agency soliciting these accounts and puts a reasonable time element on those restrictive covenants. Most states will accept 2 or perhaps 3 years for a producer; perhaps 1 or 2 years for a CSR who is licensed. This permits the producer to continue his career (selling insurance), but not to his former employer’s clients and prospects.

Obviously, the producer was soliciting. The agent could prove this because some of his clients who were also his friends tipped him off to their solicitation by the producer with exceptional knowledge of their accounts. Obviously, the producer had stolen agency confidential information to prepare him for the theft of agency clients.

Happily, our new client had such a contract with account-sensitive, not territorial-sensitive, non-piracy clauses. The third question is just as important to the validity of the contract as the first two: Was signing the contract a condition of employment – or – was there “timely and legally sufficient” consideration given for signing the contract if the employee was already employed by the agency?

(Editor’s note: This could be considered a data breach forcing your agency to use it Cyber Liability coverage … if you have any!) The agent said he did not want to make a big deal of the solicitation, if we could only make him stop! He would even SELL the producer some accounts that he seemingly controlled. I told the agent that if that was the attitude that he wanted to take, I would give him my advice FREE, but would not represent him. This surprised the agency and he asked my why I would take that position in such a clear-cut situation.

By the way, their customary Christmas bonus cannot suffice; it must be new and “fresh” consideration and ordinarily a minimum of several thousand dollars depending on the anticipated danger of that particular producer to the agency following their departure; perhaps much, much more or a new Lexus would suffice if he has a substantial book. If the contract was signed as a condition of initial employment, you are safe. If you had employees sign a contract after they were employed (or revised the contract to take any benefit away or reduce its liberalism), the only way to assure validity is by rendering consideration (usually money, but perhaps a non-cut employment provision for a couple years or some such) and having the employee sign the contract (or revisions thereof) with a specific notation therein that such consideration was expressly given and accepted by the employee in exchange for the non-piracy. By the way, that consideration should not be nominal. $100 to have a producer sign a non-compete and nonpiracy for the first time may not be considered valid by a court, especially if there are remedies spelled out in the contract, because it constricts his rights without reasonable consideration or remuneration.

Texas Connection

If an agency has valid contracts with non-competition and/or non-piracy clauses and does not enforce them one time, it likely invalidates the restrictive covenants of his other producers in the future since a court or arbitrator may determine that the supposedly protected information is now of public knowledge, and therefore no longer protectable. After all, how does he pursue the next departure when the second lost producer simply states in court that since the agency did not pursue the first lost producer, he felt that pursuing those clauses in this case is discriminatory (and it is) and an unknown amount of otherwise confidential agency information appears to be public knowledge? We always seek what is RIGHT and pursue it with dogged determination until the situation is resolved. Luckily, RIGHT has prevailed in most instances. Continued on page 22

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June 2014

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Theft of Accounts Continued from page 20 In this scenario we advised the agent to take the following steps: 1. Write a personal letter to all of the clients generated or serviced by the producer advising them of his departure and that the agent (or a representative) will visit them soon to assure continuity of coverage and service. Note that persistency with a carrier will assure the best treatment on renewal or in the event of a loss. 2. Send a Newsletter or Bulletin to all other clients with a few articles of general interest and a notice that the producer has left, wishing him well, and naming the successor producer and/or servicers that are available to meet any insurance needs. 3. Working with his attorney, get temporary injunctions against both the producer and the agency specifying the offenses that have been committed, and offering to avoid further legal action if they a) return the accounts that have been lost, and b) avoid any further solicitation of any accounts covered by the contract. 4. If you had our recommended expanded restrictive covenants in there, you’ve also provide that cannot even “accept” a protected client – and just because the state insurance code says the client can take his business to anyone she chooses, that has no effect on your contract that says the producer is prohibited from accepting such business even if the client searches him out totally on her own volition. 5. If the solicitation continues, SUE THE BASTARDS! In the old West, when someone took your cattle, you first asked for them back (in case the herds just got mixed up). If they proved their criminal intent by denying or continuing the wrongdoing, they were prosecuted and hung! Note that the agency can also invoke the Uniform Trade Secrets Act, which precludes the theft of trade secrets such as a customer list and/or expiration dates or contact points, etc., regardless of whether or not there is a contract between the agency and the producer. Such a list is called a protect “compilation”, since it is a unique list valuable only to an insurance agent; it is compiled in a special way for a special target group, and we not be valuable to say a plumber – but is extremely valuable intellectual to any insurance agency.

One can also throw in the federal Uniform Trade Secrets Act; which then forces the producer to defend himself in both state court and federal court at the same time in the event there is a substantial amount of money at stake and you can persuade a federal prosecutor to go after him criminally for theft of such trade secrets. NOTE: Do not threaten the producer with being prosecuted for a crime; just go to the prosecutor first, and they’ll let the producer know they are being investigated for theft – otherwise, you can be convicted of extortion yourself. WHAT ARE THE DAMAGES? Too many contracts do not specify the damages done or the values of those damages. Those contracts that do specify the levels of damages are rarely broken. There are various types of damages, including amongst others: Level One Damages – The revenue value of the lost accounts. The lost accounts will accumulate lost commissions for every year they would have stayed in the agency. Each agency has two types of business; that of average duration, and that of extended life. If you randomly sample your dead files you will identify the average life of accounts that have died (initial inception date to termination date) and, with enough in the sample, could determine the average life of accounts by type. Measure the life to termination of the accounts lost to the departed producer to determine if they fall into the average category and calculate the remaining revenue value to each policy/account. If an account has been with the agency more than double the average life, it is an extended life account and should be valued as if its life to the point of theft was its “half-life”. Level Two Damages – Asset value decline to the agency. If your agency is worth $X intact including the book of business and growth generated from that book in the future, how much less is it worth without that book of business? Agency Consulting Group, Inc. or other agency valuors can determine the value of your agency with and without the stolen business to add that measure of damages. Level Three Damages – If a stolen book of business has proven to be a generator of referrals, the value of the expected referral accounts over their lifetime is another measure of damages. Continued on page 24

By the way, it’s useful to restrict the theft of both “confidential information” and “trade secrets” – the former being defined under case law (common law) decided in your state, and the latter being a creature of statute defined by the legislature; so by specifying both, you’ve much more effectively covered all the ground you wish to protect.

www.MAServices.com Texas Connection

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June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

”How to Evaluate, Buy & Sell a ‘Mom & Pop’ Agency” … Thursday morning at Convention

Theft of Accounts Continued from page 22 You can make a business decision as to whether to provide that the substantially prevailing party shall be entitled to collect their attorney’s fees from the other side. If that’s not in there, the agency may gain some advantage by the mere threat of out-spending the renegade producer and causing no end of time spent answering interrogatories and sitting through depositions and the like with no chance of him collecting his [substantial] attorney’s fees from you even if he should win. On the other hand, the threat of having to reimburse you for your attorney fees could double his risk of losing, and scare him into honoring his non-piracy just on that basis alone. Make no mistake; these actions can be extremely expensive on both sides. The producer could be forced to spend more than $10,000 defending himself in a couple of weeks just for openers if the agency pursues an immediate temporary restraining order and escalates things from there rapidly.

Video at https://www.youtube.com/watch?v=FBLd5ZzwyCs

The best contracts will spell out the damage calculations (often referred to as “liquidated damages”) in the event of a theft of accounts. Once this form of contract is accepted and signed, there is little chance of a producer breaking the non-compete or non-piracy clauses upon his termination. By the way, another major avenue of attack here is to go after the departed producer’s new agency for “tortious interference” with business contracts in the event the successor agency is aware of the non-piracy and proactively encourages or assists the producer in the piracy of accounts. In most states that can result in multiple damages plus attorney fees against the successor agency; potentially a great deal of money. Often a carefully worded threat letter from your attorney to that agency can in and of itself stop the piracy in its tracks when the other agency owner figures out how much its actions could cost him – he’s the deep pockets. Please make no bones about it. The primary value of an insurance agency is in its book of business. The greater the retention and growth of the accounts, the more the agency is worth. The solicitation of an agency’s accounts represents THEFT, pure and simple. This theft is worse than the burglary of jewelry from your home. In the case of jewelry, you have lost the value of the pieces once (and any emotional attachment you may have had to them). In the theft of accounts, you lose the revenue value of the accounts EVERY YEAR. Offering to “sell” the stolen accounts to the thief makes as much sense as telling the burglar that you’ll forget about the theft if he will compensate you for the lost jewelry.

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June 2014

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org Some customers aren’t worth doing business with! When I use that line in at some of my speaking engagements, it’s almost always is met with applause. In other words, it’s okay to fire a customer – certain customers! Abusive and disrespectful customers can bring down the morale of the company. They can take the fulfillment out of the employees’ jobs. They can suck the positive energy out of the culture. They put employees into a bad mood. And, they can make it bad for the next customer. A company’s culture that evokes the customer is always right rule is just fine until the customer is wrong to the point of being abusive. Then it creates a dilemma for the employee. It gives a customer the advantage in that they can bully an employee, pushing them to a point of being very uncomfortable. It makes an employee apprehensive about what is the right or wrong thing to do. It can take away an employee’s dignity and selfrespect. It can also cause an employee to lose respect and resent his or her manager and even the company.

One of my favorite topics to write and speak about is about what happens when the customer is not right. I love to say it… The customer is NOT always right! But, they are always the customer. So if they are wrong, let them be wrong with dignity and respect. It’s okay for customers to be misinformed or make a mistake. However, sometimes the customer is not only “not right,” they are abusive and disrespectful toward the people who are trying to do their best to help them, our employees. I decided it was time to resurrect this concept after hearing the same story three times in a week. It’s an old Southwest Airlines Herb Kelleher story that I first heard years ago. The short version is that a passenger kept writing the airline about how unhappy she was. She didn’t like the boarding process, not having an assigned seat, a small bag of peanuts versus a meal and more. After a number of letters, one of them finally made its way to Herb Kelleher, the CEO of the airline. He took the time to respond. He wrote:

The customer is not always right. And some customers aren’t worth doing business with. It’s okay. Toxic customers may be bad for you and your company’s health. Shep Hyken is a customer service expert, professional speaker and New York Times bestselling business author. For information contact (314)692-2200 or www.hyken.com. For information on The Customer Focus™ customer service training programs go to http://www.thecustomerfocus.com. Follow on Twitter: @Hyken (Copyright ©MMXIV, Shep Hyken)

Saturday, June 7th 8:30 a.m. - 11:30 a.m. “The Hunger Games” … CSRs & Agents are welcome to attend for free and learn the latest techniques in finding and capturing clients. Earn FREE Association CE

We’re going to miss you. Love Herb This simple response sent a clear message to the customer: We appreciate you, but it’s not working out. It also sent a message to the employees. We appreciate you, and we value you to the point that we’re willing to put you ahead of the customer.

Texas Connection

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More Information about Texas Professional Insurance Agents Membership at www.PIATX.org New Media: Reaching out to bloggers, podcasters, and other social media influencers is a costeffective way to increase brand awareness and get more sales. Figure out which outlets cover your topic of interest, get to know the bloggers and their audience, and have a clear, strong story that catches their attention. Consumers: You can create your own online newsroom with the latest news that appeals to your customers, which should show up in search engine results. In addition, you can include your latest news in email newsletters you send customers and leads. Write press releases that focus on your buyers' problems and common pain points. 8:30 a.m. â&#x20AC;&#x201C; 11:30 a.m. Going Viral: Growing Awareness through Media Get heard in this noisy world. Learn the fundamentals of branding and ways to promote your message online, through social media, and through traditional media channels.

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Investors: Press releases can be used as a tool to attract new investors and to inform current investors of the success and growth of your company. Keeping investors happy is always important, so make sure you highlight the topics your investors care about most. Affiliates: Do affiliates help sell your products? Whenever there are changes to your products or you release new products, you can write press releases aimed at these affiliates. Each tweak or change in your offerings could be more marketing ammunition for powerful this sales force. Search Engines: One thing I don't like about the new era of press release distribution is that too many companies write off the power of traditional media. Now that Google has weighed in on the issue, it's time to put the "press" back into press releases. 11:30 a.m. - 1:00 p.m.

Carol Hargis: Generating publicity through traditional media, including writing and submitting press releases to newspapers and magazines, contacting local TV and radio outlets, etc. www.InsRecord.com Before you start typing up your next press release, you need to figure out who your audience is. Who do you want to read this press release, and what do you want them to do once they've read it? Where are you going to publish it so it gets found by the audience you're targeting? Today's press release has a much wider audience, as you can see here below: Traditional Media: This is the original press release audience and remains the audience with the biggest upside potential. This includes newspapers, trade publications, magazines, news/industry websites, TV, and radio.

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Texas Connection

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June 2014

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Friday, June 6 at San Antonio Convention Elevation Certificates – Know The Facts provides attendees with a more in depth understanding of Elevation Certificates and how they relate to the National Flood Insurance Program. The course opens with a review of the Elevation Certificate, breaking the document down section by section. Discussion then moves on to interpret the information provided on an Elevation Certificate. By the course end participants will be able to answer:

Advertise in the Texas Connection Attention: Insurance Companies, MGA’s, Premium Finance Companies & Insurance Industry Vendors: Check out the rates for the most cost effective method of keeping your message in front of your customers …

1. When Elevation Certificates are required 2. Why Elevation Certificates are required

The Independent Insurance Agent.

3. Where Elevation Certificates are obtained The course is designed for those individuals who have a working knowledge of the National Flood Insurance Program. The objectives of this seminar are to provide participants with the knowledge, skills, and understanding to: Read Elevation Certificates Understand why Elevation Certificates are required by the NFIP Be able to interpret information provided on Elevation Certificates and how this information relates to rating of flood insurance policies

Ad Size

Monthly

Pre-Pay 6 Issues

Full Page (7.5” x 10”)

$175.00

$900.00

Half - Page (7.5” x 5”)

$100.00

$500.00

Quarter-Page (3.75” x 5”)

$75.00

$375.00

1/8 - Page (3.75” x 2.5”)

$50.00

$250.00

Questions? Contact Eddie K. Emmett at eddie@piatx.org or (770) 312-2342.

Tom Langmead Hartford Flood Regional Sales Director thomas.langmead@thehartford.com www.hartfordfloodonline.com

The PIA National Agency Marketing Guide is just one tool available through PIA’s award-winning PIA Branding SM Program, Local Agents Serving Main Street America (www.piabrandingpr ogram.com). Through the PIA Branding Program, PIA provides its members with marketing tools and services, including internet marketing services as well as print and radio advertisements, in both English and Spanish.

Texas Connection

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June 2014

At Dovetail, we understand small business. Through our online program, we have written Workers' Compensation insurance for a variety of small business risks with the simple click of the mouse through our NetComp program. Now we are offering the same quick quoting and binding features for BOP with the addition of a new online program, www.NetBOPins.com. You can quote, bind, and issue a policy on your desktop in mere minutes. Our BOP program is designed for small businesses with sales up to $15 million ($5M per location) and less than 50 employees. The BOP provides coverage up to $5M per location for property and liability up to $2M occurrence/ $4M in the aggregate per insured. The policy is enhanced with many added coverages, at no extra charge to the client. Risks one mile or more away from the coast are also eligible! This program carries an AM Best rating of "A" for excellent financial strength.

To get more details about becoming eligible to write BOP or workers comp with us, please contact our Marketing department at marketing@dovetailinsurance.com.

Dovetail Insurance Corp - 1333 Main St, Ste. 600 - Columbia, SC 29201

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org name column, address column, or phone column. To remedy inconsistencies, simply go to that particular directory or site and edit your data. If we do not find your listing in a business directory, it may be that we could not find your NAP data or that we could not identify NAP data as belonging to you because of NAP inaccuracies. There are circumstances where a site might only post your name and URL, without your address or phone number. This is not considered a true citation. In this case, the report indicates a red X for "not present" even though a partial NAP exists. Competition Walkthrough The Competition Report looks at how visible your company is, compared to your most optimized competition online. The competitors shown here are based on a Google query using the primary keyword used in Google+Local (Google Places). This keyword is typically the most competitive for ranking. By understanding what your competition is doing, you can better determine what needs to be done to catch and outrank them. We analyze the presence of each competitor on the Big 3 search engines and identify which citations are highly related to your area and industry. We identify the most important local directories for your business. We will show you exactly how well each business is optimized, as well as provide additional citation sources where it would benefit you to add your NAP data (Name, Address and Phone #). This report provides a nice snapshot of everything you need to do to start to build an online marketing campaign designed to outrank your competitors.

Run Your Agencyâ&#x20AC;&#x2122;s Free Visibility Report at www.FYIExpress.VisibilityScore.com Local Walkthrough The Local Report analyzes your local listings on Google, Yahoo and Bing. Based on the phone number, we are able to scan and identify listings in Google+Local (Google Places), Yahoo LocaI and Bing Local. Any duplicate listing can affect this score. In addition, we have identified factors that seem to influence rankings. These influences are based on analysis of over 4,000 Local Business Listings in order to understand how to achieve higher rankings for them in the Search Engine Report Pages (SERPS). Using these key factors, we assign a score to each individual section of your report. For example: Is your listing claimed? Do you have 5 categories? Do you have an adequate number of positive reviews to determine whether your listing meets the criteria proven to be important by our expert analysis?

Reputation Walkthrough

***PLUS: we are able to monitor your Google+Local. This is a big plus, because Google+Local is recognized in the industry as being notoriously buggy. Directories Walkthrough

The Reputation Report scans several review sites and reports back on those reviews. We look for your business on various search engines, local directories, and review sites; analyze your 5-star reviews on each; display the 10 most recent reviews; report on the overall sentiment from each review site; and then display the average. You can quickly glean important data from this report, which allows you to discover possible reputation management issues and take immediate action to correct them. In addition, this report finds and displays online mentions of your business. These mentions are assigned a "sentiment score." The overall sentiment is displayed in the top section as a summary of all sentiment scores combined.

The Directories Report shows where your business is listed, how it is listed, and also where you are not listed. The purpose of this report is to identify citation acquisition problems, allowing them to be fixed successfully. Google looks at the consistency of your NAP (Name, Address and Phone #). The more consistent it is, the more trust Google has in your business, and this will typically result in a higher ranking. Creating consistencies across all directories has proven to be difficult, given all the different data aggregators and data entry points in use these days.

The Keyword Ranking tool shows you where your keywords rank on Google, Google+ Local, Yahoo, Yahoo Local, Bing, and Bing Local.

It is important that your NAP matches exactly across all directories. We have identified any inconsistencies in your NAP by highlighting them in the

Run Your Agencyâ&#x20AC;&#x2122;s Free Visibility Report at www.FYIExpress.VisibilityScore.com

Texas Connection

Keyword Ranking Walkthrough

Page 32

June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

AND JUSTICE FOR ALL ...................................................... 1

In This Issue

2014 CONVENTION AGENDA ............................................. 3

The editorial content in Texas Connection is valuable information but as always you should do your own due diligence and evaluation. The content is meant to be for informational purposes only and does NOT warrant an endorsement by the Texas Professional Insurance Agents in any form or fashion

EARN ASSOCIATION CE .................................................... 6

Texas Connection

GOAGENTS

..................................................................... 15

PERSONABLE .................................................................. 17

THEFT OF ACCOUNTS ............................................... 18

Page 33

June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Membership & General Information Joe Tipton Membership Director

8:30 a.m. - 11:30 a.m. “The Hunger Games” … CSRs are welcome to attend for free and learn the latest techniques in finding and capturing clients. View the Introductory Video

PO Box 700877, Dallas, TX 75370 TEL: 972-862-3333

FAX: 972-307-7888

Cell: 972-965-2025

Joe@PIATX.org

PIA National

www.pianet.com

E&O Solutions Renewing your E&O every year isn’t much fun, is it? Don’t you want to make sure that you’re getting the best price for the best coverage you can get on your renewal? Why not compare with another company for your peace of mind?

http://agency-growth-profit.com/

Take a balanced approach with personal lines

RETENTION Retention and renewal commission revenue is the life blood of an agency. But retention can vary dramatically by line of business, customer type and the number of policies a customer has with your agency. Using our growth and profit calculators can help you identify where to put your focus on improving your agency's overall retention ratio.

COMMISSION

It costs you nothing and you don’t have to be a member of PIA of Texas to move your coverage. Go to the E&O Program link at www.PIATX.org and print the applicable application and e-mail or fax it to us. Do you want higher E&O limits but your carrier won’t quote what you want? That’s not a problem. Go to the E&O Program at www.PIATX.org and print the umbrella application from the link shown. Fill out the application and send it to us.

Being able to count on stable commission revenue is a key component for agency success and consistent profitability. Since commission rates vary by the line and type of business being written, agencies need to make deliberate decisions about their current books and how they approach the acquisition of new business for the agency.

E&O Contacts

PREMIUM

Houston area

Dallas area

No one wants to pay more than they need to for anything - including their insurance. But helping customers understand their true need for coverage is why they need and trust their agent. Too often the easiest thing for a PL CSR to do is to compare for a lower price when that's not the best solution. Not best for the customer and not best for the agency.

Bob Dixon

Ray Reyes

bdixon@piatx.org

ray@piatx.org

866-577-7428

214-618-2365

Texas Connection

Page 34

832-375-0787

June 2014

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“ What’s the harm in a little water?” Real facts about flood protection

You’ve worked hard to live the dream of owning a home or business. Most of the time, hard work, property insurance and a little luck are enough to keep both safe from harm. Then along comes a flood through a hurricane, rapid snow melt, new development in your area, or rain that just won’t go away. It happens more often than you might think: If your property is in what is called a “100-year floodplain”, for instance, you have a one in four chance of a flood during the life of a 30-year mortgage.1 Greater odds than many other risks, including fire.

Let the facts be your guide A flair for flood protection: The Hartford has been a leading carrier for federal flood insurance for nearly three decades. All policies are written subject to the National Flood Insurance Program, administered by FEMA.

Some common misconceptions about floods and flood insurance: “I’m protected. I have property insurance.” Normally, homeowners insurance or your commercial/Business Owner’s Policy exclude flooding. “Fire is my number one fear.” Understandable. But in reality, flood is the number one natural disaster in the U.S.2 “A little water couldn’t result in that much damage.” Think again. And see the chart on the next page.

continued

One inch of water can add up to thousands3

Put a wall of protection around what’s yours

It doesn’t take a foot of water to ruin property and goods. Consider a 1,000-square-foot home and the damage that can result from just one inch of water:

With federal flood insurance, you can protect your buildings and contents from damage caused by rising water from a flood. You can purchase a policy to protect the following:

Personal items (clothing, television, stereo)

$250

Accent furniture (floor lamps)

$70

Washer/dryer

$70

Computer accessories

$40

Living room furniture

$250

Kitchenware & food

$100

Bedroom furniture

$150

Appliances

$70

Kitchen & bathroom cabinets

$50

Finished floor/wood/carpet Electrical & plumbing

$7,900 $150

Doors & base trim & windows

$450

Cleaning

$850

Grand Total

$10,400

Without flood protection, you could bear responsibility for all of the above. Why leave yourself vulnerable, when policies start as low as $129 a year for a preferred risk policy?

The standard policy provides separate coverage options to protect against damage to: • The building itself

• Its contents

• Or both

Depending on your need, you may decide to purchase both to protect against damage to: •S tructural elements, such as walls, floors, equipment and fixtures •T he property’s contents, such as furniture, appliances, wall and floor coverings •P ersonal items, such as clothing, audio equipment and televisions

Don’t wait until water is at your door Consider purchasing flood insurance sooner rather than later. Keep in mind that there’s often a 30-day wait after purchase for the policy to take effect. So call your independent agent today about flood insurance through The Hartford. It’s rainy day protection that could help save your most valuable investment: your home or business. www.thehartford.com/flood

Map your risk. The Federal Emergency Management Agency (FEMA), which administers flood insurance, works with local communities and experts to revise aging flood maps in communities across the country. You can get a detailed, digital flood hazard map of your area by visiting: www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/understanding_ flood_maps.jsp. Let your Hartford agent help you interpret it. 1,2,3

Source: floodsmart.gov

All policies are written subject to the National Flood Insurance Program. Please note that this product is available in most states. Features and credits may vary by state. For simplicity, this brochure does not include all the features, exclusions and limitations of the policy. For full information, The Hartford suggests that you read your policy or consult with your independent agent. On all losses and claims, policy terms apply. All information and representations herein are as of October 2013. 13-0287 Printed in U.S.A. © October 2013 The Hartford Financial Services Group, Inc. All rights reserved.

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Create a QR Code for clients to scan while sittng at your desk. Iâ&#x20AC;&#x2122;ll show you how to do it for free at the Texas PIA Convention.

Texas Connection

Page 38

Cast your vote at https://www.surveymonkey.com/s/B8SSH6W

June 2014

More Information about Texas Professional Insurance Agents Membership at www.PIATX.org

Our Newest Member Benefit Do you write Commercial Lines Insurance? How would you like to have an Excel spreadsheet of Company Names, Addresses, websites, Social Media, and e-mail addresses (if available) for any specific type of risk you can name? Current members can get the information on up to 200 of these risks within a 30 mile radius. Want to try? Send your type of commercial risk and zip code to eddie@PIATX.org. I’ll create and send the Excel spreadsheet ASAP. BTW … I’ll show you how to do it at the convention.

Texas Connection

Page 39

June 2014

www.insuranceclassroom.com

Insurance Classroom will email all Texas PIA Convention attendees a $10 gift certificate to www.insuranceclassroom.com

Insurance Classroom provides a quick, easy and affordable way to complete your insurance continuing education online! ü Self-‐paced courses ü No Timer ü Online examination and instant grading ü Printable completion certificates available immediately upon course completion ü Credits reported every business day ü Superior customer service