A MONTHLY PUBLICATION OF THE INDEPENDENT INSURANCE AGENTS & BROKERS OF LOUISIANA
LOUISIANAAGENT JULY 2022
LOUISIANA CITIZENS UPDATE
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LOUISIANAAGENT
IIABL STAFF JEFF ALBRIGHT Chief Executive Officer jalbright@iiabl.com (225) 236-1366
BENJAMIN ALBRIGHT Vice-President of Strategic Initiatives balbright@iiabl.com (225) 236-1357
KATHLEEN O'REGAN Director of Communications & Events koregan@iiabl.com (225) 236-1360
KAREN KUYLEN Director of Accounting & Finance kkuylen@iiabl.com (225) 236-1353
RHONDA MARTINEZ Director of Insurance Programs rmartinez@iiabl.com (225) 236-1352
JAMIE NEWCHURCH Director of Insurance Programs jnewchurch@iiabl.com (225) 236-1350
LISA YOUNG-CROOKS Director of Member Relations lyoung@iiabl.com (225) 236-1351
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CONTENTS TABLE OF CONTENTS & FEATURED STORIES
02 IIABL STAFF At your service!
14 5 KEY BEHAVIORS OF GREAT AGENCY OWNERS By Carey Wallace, Agency Focus LLC
17 CONTRACTORS PROFESSIONAL &
POLLUTION LIABILITY COVERAGE A Gap-Filling Necessity
27 HOW TO REDUCE CELL PHONE SPAM Catalyit Corner
28 DIGITIZE PAYMENTS TO INCREASE CUSTOMER SATISFACTION ... and more
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LOUISIANA CITIZENS UPDATE
32 SET YOUR CLIENTS ON A SECURE PATH WITH A COALITION CYBER LIABILITY Big "I" Markets
34 YOUR STATES CONNECTION TO IMS Independent Market Solutions
35 UM SELECTION FORM DECISION LA Supreme Court
37 WORKING WITH ADJUSTERS TO GET CLAIMS SETTLED By Nancy Germond
44 TOP 10 REASONS TO BUY FLOOD
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EQUIPPING YOUR YOUNG AGENTS WITH RESOUCES TO SUCCEED
18153 E. Petroleum Drive Baton Rouge, LA 70809 Ph: (225) 819-8007
www.iiabl.com
INSURANCE NOW
SCRIBER 12 MIKE TO LEAD IIABL
Big "I" Flood Program
45 WHAT IS THE BEST INSURANCE SALES CHANNEL?
Direct of Agent-Assisted
48 50 51 52
IIABL EDUCATION UPDATE ADVERTISER INDEX INDUSTRY PARTNERS IIABL BOARD OF DIRECTORS
LOUISIANA CITIZENS UPDATE
The Louisiana Citizens Property Insurance Corporation Board of Directors met on Thursday, July 14, 2022, at the Louisiana Department of Insurance. Following are important highlights of the meeting. Reinsurance CEO Richard Newberry reviewed the LA Citizens reinsurance program. The 2021 reinsurance program had total coverage of $545 Million which cost LA Citizens $30 Million. The 2022 reinsurance program has been increased to $1.2 Billion to cover the increased exposures caused by dramatic growth in policy count and total insurance values. The cost of the 2022 reinsurance program was $103 Million. The total retention for LA Citizens within the reinsurance tower is $51.6 Million.
BY JEFF ALBRIGHT IIABL CEO
Commercial Lines LA Citizens currently writes 4,685 commercial policies with a total insured value of $5 Billion. Those policies are concentrated in southeast Louisiana. LA Citizens commercial insurance rates are based primarily on the cost of reinsurance. As a result, the new reinsurance program results in a 71.1% rate increase in the FAIR Plan, which will affect 4,420
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LOUISIANACITIZENS policies with an average premium increase from $5,360 to $9,170. The Coastal Plan rates will increase 79.3%, which will affect 265 policies with an average premium increase from $7,260 to $13,020. These rate increases were approved by the board on July 14th and will be filed with LDI with a requested implementation date of November 1, 2022. Personal Lines In January 2021, LA Citizens had a residential policy count of approximately 35,000 policies with total insured values of approximately $8 Billion. By the July 14th board meeting the policy count had grown to over 82,000 with total insured values over $23 Billion. Operations Agents processed 52,368 quotes in June and 56,031 quotes in the first 10 days of July as they rushed to replace cancellations from Maison, Lighthouse, and Southern Fidelity, resulting in the
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Continued from page 6 placement of over 30,000 policies. The LA Citizens underwriting staff handled an average of 878 phone calls daily in July. In the second week of July, LA Citizens added a second web portal server to double the capacity of the “pipeline” into the EPIC system which improved access for agents and reduced system problems. Financials As of the end of May, LA Citizens had cash and investments totaling $184 Million. The board approved an increase in the amount of the standing line of credit which LA Citizens maintains as a possible “bridge loan” if ever needed after a worst case scenario catastrophe to pay claims until assessments could be made. The board also approved a 2.10% assessment to continue payment of the Katrina/Rita bonds which will be paid off in 2026.
Young Agents Conference August 18-20, 2022 Sheraton New Orleans Hotel
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EQUIPPING YOUR YOUNG AGENTS WITH RESOURCES TO SUCCEED By Kathleen O'Regan IIABL Director of Communications & Events
The IIABL & IIAM Joint Young Agents Conference is designed with the young agent in mind. Emerging leaders of our industry from Louisiana and Mississippi meet up once a year to engage with each other and further their insurance knowledge. We invite all young agents (and those young at heart) to participate in a weekend of professional development and networking at the Sheraton New Orleans this August. You have young agents that are dealing with the current struggles of reinsurance, finding reliable markets for your customers, and need to improve their efficiency and be more organized than ever before. We know now is a critical time to have boots on the ground and we know how busy you are. We also know that investing in your employees is important and giving them the
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YACONFERENCE
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resources to be able to tackle these hard times is a priority. That’s why we have the Young Agents Conference. We carefully craft our agenda to help young agents, YOUR employees, with the issues they are facing now. So here is the big ask… can you spare some time so they can attend the Young Agents Conference and come back better equipped to help your agency during these tough times? If the answer is YES, have them to sign up now!”
Networking in the Exhibit Hall During the Opening Reception
Here is what you can expect at our event this year…
Golf at English Turn
Enjoy food & drinks while visiting with our exhibitors at the Opening Reception. A wide variety of companies will be set up showing off their products and services tailored to meet the needs of your agency. It is a great opportunity to network and connect with attendees in a casual setting.
Our annual golf tournament will be held on Thursday, August 18 at English Turn Golf & Country Club. It is a Ryder Cup format, with twoman Louisiana and Mississippi teams playing Matthew Cohen & Megan Smith with Guy against each other. English Turn is an unmatched Carpenter will discuss the hot topic of example of luxurious environment to enjoy a round Reinsurance: What Does It Mean for Retail Agents of golf and a piece of New Orleans history. The Like Me? Reinsurance plays an important role in winner will be announced at the Big I Brunch on insurance markets, particularly in Gulf Coast Saturday. states. Learn how reinsurance markets work, current challenges reinsurers face, and what the future may hold for reinsurance markets. Timely Speakers & Topics Geared Toward the Young Agent
Insurance company & broker representatives will participate in a Markets Panel Discussion that will discuss current market conditions in Louisiana and Mississippi and how we compare to other areas of the country. Panelist will also discuss future trends and challenges for insurance markets. Kym Martell with K.M. Associates, will wrap up our conference with her popular presentation Best Practices: Agency Operations & Workflows. This presentation will review best practices for agency policies, procedures, workflows and operations… how you can improve the way your agency operates… and include interactive roundtable discussions so you can see how other agencies operate. This session is approved for 3 hours of Ethics and qualifies for the 10% risk management credit for Westport & Allianz E&O Products.
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YACONFERENCE Stay in New Orleans! The Sheraton New Orleans Hotel is brimming with style and grounded in the New Orleans community, perfect home base for our Young Agents to escape. Located on Canal Street, the hotel is steps away from the buzz of the French Quarter. Book your stay ASAP! The Sheraton is offering a rate of $149 per night.Reservations can be made by calling 504-525-2500 and requesting the Independent Insurance Agents & Brokers of LA rate or online HERE. The reservation deadline is July 29th! As you can see, IIABL & IIAM have been hard at work to plan another unforgettable event. We can’t wait to see you in New Orleans this August! Don’t delay, REGISTER TODAY!
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Mike Scriber Elected to Lead IIABL FOR IMMEDIATE RELEASE
July 15, 2022 Media Contact: Kathleen O'Regan The Independent Insurance Agents and Brokers of Louisiana (IIABL) installed the new 2022-2023 officers and board of director members at the 2022 Annual Convention on Monday, June 20, 2022, at the Hilton Sandestin in Miramar Beach, FL. The officers include President, Michael “Mike” Scriber; President-Elect, Armond K. Schwing; Secretary/Treasurer, Bret Hughes; National Director, Johnny Beckmann, III; and Immediate Past President, Donelson “Don” Stiel.Newly elected board members include Christy Desoto, Craig Martel, and Randy Perise. President, Michael “Mike” Scriber, is Managing Partner of Scriber Insurance Services in Ruston and Bryan Agency in Arcadia. Scriber joined the IIABL Board of Directors in 2011 and has served as IIABL’s Legislative Chairman. He and his wife, Laura, reside in Ruston. President Elect, Armond Schwing, is Chairman and CEO of Schwing Insurance Agency, Inc. in New Iberia. He and his brother, Chet, are 3rd generation owners of the agency started by their grandfather in 1935. Schwing joined the IIABL Board of Directors in 2012. He and his wife, Jennifer, reside in New Iberia.
Secretary-Treasurer, Bret Hughes, is the President of Hughes Insurance Services in Gonzales. In addition to serving on the IIABL Board of Directors, he serves on the Agent Advisory Board for the Commissioner of Insurance, the Louisiana Auto Insurance Plan Governing Committee and he is President of the Ascension Fund Board of directors. He and his wife Stacey reside in Gonzales. National Director, Johnny Beckmann, is Senior Vice President at AssuredPartners in the Greater New Orleans Area. Beckmann was elected as the IIABL National Director in 2019 for a four year term. He and his wife, Lana, reside in Metairie. Immediate Past President, Donelson “Don” Stiel, is an Officer of the Stiel Insurance Group that has offices in Metairie, Lafayette, Hammond, Franklin, Houma, and Morgan City. Stiel joined the IIABL Board of Directors in 2011. He and his wife, Tracey, reside in Franklin. Christy Desoto is an Agent and Office Manager for 1st Insurance of Marksville. She has 36 years of insurance experience including owning her own agency for 28 years. She enjoys spending time with family and friends, traveling, hunting and fishing.
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BOARDDIRECTORS
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Craig Martel is the Chief Operating Officer of Insurance Unlimited of LA in Lake Charles where he was born and raised. He and his wife Ellen reside in Lake Charles with their three daughters. Randy Perise is a Vice President with Blumberg and Associates, Inc. and Managing Partner in their Ponchatoula office. In addition to serving on the IIABL Board, he is a current board member with the Southeaster Louisiana University Lion Athlete Association. He and his wife Julie reside in Ponchatoula.
Members of the IIABL Board of Directors that were elected for an additional two-year term include: Ann Bodkin-Smith, Thomson Smith & Leach Insurance Group (Lafayette); Matthew deBlanc, Continental Insurance Services (Marrero); Rob Eppers, Risk Services of Louisiana (Shreveport); Eugene Montgomery, Community Financial Insurance Center (Monroe); Joe King Montgomery, Thomas and Farr Agency (Monroe); and Robert Stone, Stone Insurance Inc. (Metairie) Members of the
IIABL Board of Directors that continue to serve Krystal Gathe is an Auto Dealership Specialist with the second year of their two-year term include: HUB International Golf South Ltd. in Baton Rouge Matt Graham, Lincoln Agency (Ruston); Chris Haik, and was appointed by IIABL President Scriber to Haik Insurance Holdings (Lafayette); Stuart Harris, serve as the Chair of the Young Agents Committee. McClure, Bomar & Harris (Shreveport); Ross In her spare time, she enjoys family vacations, Henry, Henry Insurance Service (Baton Rouge); outdoor festivals and attending New Orleans Charles “Chuck” LeBlanc, Bourg Insurance Agency Saints football games with her husband and two (Donaldsonville); Lydia McMorris, Alliant sons. Insurance Services (Baton Rouge); Hartwig “Robby” Moss, Hartwig Moss Insurance Agency (New Orleans); Robert Palmer, Jr., Insurance Underwriters, Ltd. (Metairie); and Robert Riviere, Riviere Insurance Agency (Thibodaux).
IIABL Officers & New Board Members
BRET HUGHES
ARMOND SCHWING
IIABL Secretary-Treasurer
IIABL President-Elect
MICHAEL "MIKE" SCRIBER IIABL President
JOHNNY BECKMANN IIABL National Director
CHRISTY DESOTO
CRAIG MARTEL
DONELSON "DON" Stiel IIABL Past President
RANDY PERISE
KRYSTAL GATHE
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Carey Wallace Agency Focus LLC There is an incredible opportunity in the insurance industry for someone who wishes to own their own business. With over half of the agency owners facing retirement in the next 5-10 years, a strong desire by many agency owners to remain independent, and the goal to offer the same opportunity to the next generation that their agency provided to them - there is no better time for future owners. There is no question the opportunity exists – for the right person. What will it take to be a strong and successful agency owner? I asked this question to many successful agency owners and here are the most common themes in their answers.
yourself with people that can challenge the way you think.” – Matt Simon, Coverlink Insurance Above all else, take great care of the people – the humans that are the heart and soul of your organization. There is nothing that matters more than them. You are not going to have all the answers all the time, so stay open, stay humble and listen.
Have a Clear Purpose Leading with your purpose as your guide is key to your success. This will keep both you and your team focused on what matters most: Trust & Relationships. “Insurance is not a transaction, it’s a promise and a trusted relationship.” - Perk Transition your Thinking Reichley, Reichley Insurance While you’re honing When you are an owner of a business your job has your sales and leadership skills, stay committed to a completely different focus. You can no longer be becoming a person that CAN be trusted and CAN singularly focused on ways you can be successful, forge healthy relationships. This is hard work and instead it is transformed to a much broader requires showing up even when it is inconvenient, perspective. You are now responsible for building making and keeping promises of personal service the partnerships, structure, team, technology and and dedication, listening to other needs more than environment that puts you and your team in the talking about your own, hanging in there for the best position to serve your clients. This transition long haul with others, and always seeing the takes time, requires different perspectives and the potential around you when you are struggling ability to listen and stay humble. “Surround yourself. It requires strong character and a
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GREATOWNERS personal inner strength to do these things, making this role not a fit for everyone. Know yourself and only step into this role if you are confident that these are the types of things that energize you and bring you a great sense of accomplishment. “Serve others and you will succeed.” – Adam Augspurger, Steadfast Insurance When you lead with your purpose as the guide, the sales, premium and number goals will fall into place. Know your numbers Be an expert in your business by having a great handle on your numbers. While your numbers should not be the only measure of your success, they are an important part of running the agency. You should know exactly what’s is driving your business, what your areas of weakness are and be the one focused on minimizing those obstacles and challenges. As the leader, you will set the example what being a good steward of the agency’s resources means. “Build a war chest of savings that you can deploy when the time is right.” Seth Zaremba, Zinc Insurance You never know what challenges you will face, so being thoughtful in how you prepare will put you in the best position to face the unexpected. How you deploy both time and money is important to your success. Take that role seriously and always put the agency’s interests first. The most successful agencies have leaders that run their businesses like they are selling it tomorrow. Don’t go it alone Leading an organization can be lonely, but it doesn’t need to be. This industry is filled with incredibly giving people that want to share their experiences and knowledge with others. There is a servant leadership quality and camaraderie that exists in our industry that is both impressive and unique. Where else will you find your competitors willing to spend both their time and energy helping each other and the industry as a whole? Get involved, give back and get connected. The most consistent piece of advice from agency owners was to put yourself in a position to learn from others. Surrounding yourself with other agents is one of the best ways to learn and grow. Don’t ever underestimate tapping into the knowledge of those that led before you – their
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Continued from page 14 insights are invaluable. Be a student of the industry and be willing to share your knowledge. I guarantee that if you make the time to volunteer and get involved with other agents, you will receive more than you can ever possibly give. Have a Plan As the leader of an agency, it is your responsibility to ensure that the agency’s future is secure. The best way to do this is to have a plan. Every business that has employees, recurring income, and complex processes should have a documented succession plan. Independent agencies meet all three of these requirements. Planning for the ongoing success of your agency may feel overwhelming, but it is an important part of your role as the leader of that organization. The agency’s future should not be left up to chance, so take the time to document your plan and revisit the plan on an annual basis to ensure that it is kept up to date and your agency’s future is well protected.
CONTRACTORS PROFESSIONAL & POLLUTION LIABILITY COVERAGE: A GAP-FILLING NECESSITY! By Chris Boggs Last Updated Nov 10, 2017
Coverage Part A of the Commercial General Liability (CGL) policy is limited in scope, extending coverage to claims arising out of only bodily injury (BI) and/or property damage (PD). Couple Part A's limited scope with the CGL form's absolute pollution exclusion ("f.") and expensive coverage gaps are created for most contractor risks. Contractors' Professional and Pollution Liability is the contractor's coverage solution. Often referred to as either the Contractors Pollution and Professional Insurance, the Contractor's Protective Professional Indemnity coverage, or simply "CPPI," this multi-peril form specifically addresses and closes the majority of pollution and professional liability coverage gaps resulting from the limited breadth of protection provided by Coverage Part A (these policies even address some coverage gaps in the business auto policy). Coverage Part A's Bodily Injury and Property Damage Coverage Gap Commercial general liability policies extend protection when the insured contractor's actions result in bodily injury or property damage to a third party. Obviously, NOMADIC
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GAPFILLING this protection is subject to specific exclusions. Agents often stop with the CGL, believing the insured is adequately protected simply because the entity is not a "professional" (such as an architect or engineer). However, financial losses can be and often are caused by the actions (or inactions) of a "non-professional" contractor that do NOT result from either bodily injury or property damage. Consider the example of an HVAC contractor hired to design and install a system for a specialty manufacturing operation. Because the manufacturing process produces dangerous fumes or generates especially high temperatures or some other unusual effect, a specialized ventilating system is required. During testing, it is discovered that the newly-installed system is not adequate and must be removed and replaced, delaying the opening and use of the facility. There is NO bodily injury or property damage, therefore the cost to remove and replace the system is not covered by the CGL. Likewise, the loss of income resulting from the delay is not covered by the CGL. This loss is solely the result of an error in either the design or installation. All costs associated with this incident are paid from the HVAC contractor's resources (out of their own pocket). Construction projects are not "neat and tidy" operations with clear delineations of duty between professional services and construction duties ("non-professional" duties). As the project progresses and evolves, subcontractors may advise upper tier contractors regarding unexpected changes or how to solve unexpected problems. Such "advising" may cause financial loss that is NOT the result of bodily injury or property damage, but the result of an error in judgement. Financial losses arising out of a contractor's errors or omissions are not within the CGL's coverage grant. When there is no bodily injury or property damage, separate coverage is required.
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Continued from page 17 The Pollution Exclusion Gap Exclusion "f.," referred to as the "absolute pollution exclusion," removes coverage for most pollution losses. However, the exclusion contains exceptions that make it far less than absolute (unless the Total Pollution Exclusion (CG 21 49) is attached). The VU recently produced a webinar detailing the lack of absoluteness of the "absolute" pollution exclusion. (A transcript of the webinar is also available.) Several contractor-specific exceptions are found in the "absolute pollution exclusion," but the protection is limited. Contractor-specific pollution exceptions (giving back coverage) include: Coverage for BI or PD caused by the unintentional escape of fuels or lubricants from mobile equipment (the same exception exists in the business auto policy);
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GAPFILLING Coverage for BI or PD sustained WITHIN a building caused by the release of gases, fumes or vapors from materials brought into the building by the contractor if IN CONNECTION with the operations being performed; Coverage for BI or PD arising out of a hostile fire; BI and PD protection is extended to the contractor if the owner or lessee of the premises is an additional insured on the contractor's policy and is sued for the actions of the contractor (a contractual risk transfer protection); BI and PD coverage is provided if the pollutant was NOT brought to the site by the contractor; and Coverage is provided for some completed operations claims.
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Continued from page 18 2) the Total Pollution Exclusion endorsement his not attached. If proprietary wording is used, these coverage exceptions cannot be assumed; and if the CG 21 49 is attached, there is NO pollution coverage.
Even if the insured has this limited pollution coverage, important losses and costs are still excluded. No coverage is extended for pollution released outside of a building owned or occupied by the insured; No coverage exists to cover most clean-up costs; No coverage is available for pollution that escapes from the insured's place of business; The CGL does not cover the pollution transportation risk; The business auto policy (BAP) excludes Remember, these pollution-related coverage transportation of pollutants; and grants apply only if: 1) the exclusionary wording The CGL does not cover the storage or disposal of mimics Insurance Services Office (ISO) wording; or any pollutants.
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Too many gaps exist for the contractor to depend on the CGL (or even the BAP) for protection.
Most commonly the carrier pays on behalf of the insured (rather than indemnify); Coverage is generally subject to a self-insured retention (SIR); Protection is generally extended on a "claims made and reported" basis meaning the incident must be reported prior to the end of the policy period or during the automatic extended reporting period; Coverage applies only if error or omission occurs after the retroactive date and before the end of the policy period; Coverage exists only if no "responsible party" (i.e. officer, director, owner, manager, insurance manager) had knowledge of the incident prior to the policy period; and The insured is protected for its own actions and for its vicarious liability (see "Protective Liability") for the actions of a contracted professional.
The ONE Policy That Fills Both Gaps Contractors' Professional and Pollution Liability ("CPPI") coverage fills most of the gaps created by the limited breadth of Coverage Part A and the application of the pollution exclusion (even with the "give-back" exceptions). Four key coverages are combined into most versions of the CPPI: 1. Professional liability; 2. Protective liability; 3. Mitigation expense; and 4. Pollution liability. Professional Liability Coverage Financial harm arising out of professional services conducted by or on behalf of the insured is covered by this coverage part. Activities that may be considered "professional services" extends far beyond what is traditionally considered. "Professional service" can include design work, engineering work, construction management operations, or even services performed as part of the construction process such as shoring or dewatering. Some policies specifically define "professional service" and some refer back to the activity listed in the policy's declarations page. If the "professional services" definition points back to or references the activities listed in the declarations page, care must be taken to assure the description of operations is correct. If all activities are not considered and listed, there may be coverage gaps ("intent" doesn't hold up well in court). To apply the professional liability coverage part to the HVAC contractor introduced earlier, the contractor's improper design or improper installation of the ventilation system examples an error or omission in a professional service. The cost to remove and replace the system plus the loss of income suffered by the building owner are covered by the professional liability coverage part. Key provisions related to professional liability coverage include:
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GAPFILLING Protective Liability Coverage Protective liability is found in one of two places depending on the carrier; within the professional liability coverage language or, less commonly, extended in a separate coverage grant. Protective liability extends vicarious liability protection that: 1. Provides excess coverage over the contracted design professional's policy if its policy limits are insufficient; 2. Coverage "drops down" to protect the insured if the design professional's coverage is no longer available for any reason; and 3. Acts as a difference-in-condition (DIC) coverage if the CPPI is broader than the underlying professional's policy. Returning to the exampled HVAC contractor: If the design work had been done by an engineer, the engineer's professional liability should respond first. However, if the engineer's coverage had lapsed, was not sufficient, or contained an exclusion applicable to the loss – the insured's protective liability coverage would pay the amount owed to the injured party (up to policy limits). Key features of protective liability essentially mirror those applicable to professional liability with two exceptions: 1. If protective liability is extended via a separate coverage part, the insured is indemnified by the insurance carrier rather than the carrier paying on behalf of the insured; and 2. Coverage is for only the insured's vicarious liability for the actions of an outside professional. No coverage is provided to the outside professional. Mitigation Expense Mitigation expense, or "mistake coverage," is just what it sounds like – coverage for the cost of fixing a problem before it becomes a claim. The impetus for the inclusion of mitigation expense coverage is cost. It is much cheaper to fix the problem during the construction period upon discovery of the "mistake" than when the construction is complete. Some policies use the term "Rectification," but the concept is the same.
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Continued from page 20 Key components of this coverage include: The mitigation expense must arise out of professional services; The services must have occurred after the retroactive date and during the policy period; The insured must notify the carrier immediately; and All expenses must be approved by the carrier prior to being incurred. Pollution Liability The CPPI extends contractors' pollution liability coverage for two types of pollution claims: 1) job site or operations pollution coverage; and 2) pollution damage emanating from the insured's location. Job Site/Operations Pollution Coverage. Unlike the limited pollution protection extended within the unendorsed CGL, the job site pollution coverage is rather comprehensive. Claims covered by most forms include:
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GAPFILLING BI or PD resulting from the release of a pollutant; Damage to soil, water, air, animal life, and plant life caused by a pollutant release; Release from a "non-owned" site used by the insured to treat, store, dispose of, recycle or process waste (pollutant) provided the site is licensed or approved for such use; Transportation coverage protecting the insured from pollution losses related to the transportation of a pollutant; and The cost to clean up, treat, and restore damaged resources as a result of the release. Emergency clean-up costs are included. Protection for clean-up costs are limited and are covered only if: The pollution incident occurs on or after the effective date of the policy; The pollution incident is discovered during the policy period; and The pollution incident is reported to the carrier in writing during the policy period or extended reporting period. This section extends coverage to a pollution released within a building (like the CGL), outside the building, or during transportation. Further, this policy section covers a release that occurs after the work is complete – completed operations pollution coverage.
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Continued from page 21 Both job site and the insured's location coverages are subject to the same specific provisions which include: The BI, PD, or environmental damage must occur during the policy period; and The claim must be made during the policy period. Some carriers extend pollution coverage on an occurrence basis; but a few provide coverage on a claims-made and reported basis. A review of the form is necessary. When the form extends coverage on an occurrence basis, wording in the policy limits coverage to just one policy period to avoid the possibility of multiple policies being called upon to respond (avoiding the stacking of limits). The onepolicy-period limitation is accomplished using specific terminology, such as: If the incident occurs over a long period of time, the incident is considered to have occurred on the first date of exposure; and If the first date of exposure is before the policy period or cannot be determined, the incident is considered to have occurred on the first day of the policy (provided the incident was not known to any "responsible party" prior to the effective date).
Coverage forms extending pollution coverage on Insured's Location Pollution Coverage. Pollution a claims made basis follow the "normal" claims claims emanating from the insured's location are made protocol: almost totally excluded by the CGL – other than an The claim must be made against the insured exception for the release of a pollutant from an during the policy period or any extended HVAC system or smoke or fumes from a hostile reporting period; fire. However, claims for the release of a pollutant The release must occur on or after the from an insured's location are covered by the CPPI. retroactive date; and Claims covered by this section essentially mirror Prior to the effective date of the policy, the the types of releases extended protection under incident could not have been known to have the job site pollution coverage with a few key occurred. differences: The release must originate at the insured's Policy Conditions to Review business location; and CPPI forms are proprietary, there is no "standard" The release must cease within a certain CPPI coverage form. When reviewing coverage number of days (varies by carrier – 7 or 10 forms, consider the following: days is most common). But, some carriers don't The importance of the application; have this limitation/requirement. How defense costs are paid;
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GAPFILLING The breadth of "bodily injury;" The application of the "Consent to Settle" clause; and The Application Most if not all carriers offering CPPI place great importance on the application completed by the insured. Standard property and casualty (P&C) applications are considered "representations," meaning that the information provided in the application is deemed to be accurate "to the best of the insured's knowledge." This allows room for unintended, non-material misinformation without the loss of coverage. However, CPPI applications are held to a higher standard. CPPI applications are considered "representations with dependence." This means that the insurance carrier depends on the accuracy of the information in agreeing to issue the policy. The application may even become part of the policy, especially when there is a question regarding the professional service being insured.
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Continued from page 22 What is the difference between an application that is a "representation" and one that is "representation with dependence?" When the application is a "representation," only "material" concealment, misrepresentation, or fraud can result in the denial of a claim. When the application is a "representation with dependence," any misinformation is or can be grounds for a claim denial. Because of the possibility for a claim denial, especially in light of the known injury exclusion, polling letters are recommended. All managers, directors, officers, and/or insurance managers should be polled, in writing, to confirm that no known incidents that could lead to a claim have occurred. Defense Costs Defense costs are within the limits of coverage and reduce the amount available to pay the loss. Some carriers MAY allow a separate defense limit to be purchased by endorsement for an additional premium.
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GAPFILLING Defining "Bodily Injury" Commonality exists among the various policy forms regarding the definition of "bodily injury." Most if not all CPPI coverage forms define "bodily injury" to include: physical injury, sickness or disease, death, mental anguish, emotional distress, or shock. However, there are two additional results found in some CPPI forms but missing from others: Building-related illnesses; and Associated medical and environmental monitoring. Building-related illness is not synonymous with "sick building syndrome." The term buildingrelated illness applies when symptoms of a diagnosable illness or condition are identified and can be attributed directly to airborne building contaminants. This can include illness such as Legionnaire's disease or conditions such as allergic reactions. The addition of this term may expand the coverage grant. At least, if not more than, half of the policy forms include "building-related illness" within the definition of bodily injury. Associated medical and environmental monitoring appears to greatly expand the breadth of coverage under the definition of "bodily injury." Because the phrase is not a defined term, it must be defined and interpreted as would a reasonably intelligent person not within the insurance, legal, or environmental profession. Based upon such a reading, the policy pays to: 1) medically monitor (over time) the person or persons suffering bodily injury; and 2) monitor the environment in which the injury or condition occurred to assure the toxins, chemicals, or other pollutants are not present in sufficient levels to cause harm.
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Continued from page 23 Only certain carriers appear to include "associated medical and environmental monitoring" with the definition of bodily injury. Consent to Settle (The "Hammer" Clause) CPPI forms, like most professional lines coverage forms, contain a "consent to settle" clause – often referred to as the "hammer" clause. The consent to settle clause allows the insured to forbid the insurance carrier from settling a claim without the insured's permission. However, if such permission is withheld, the insured can be "hammered" by the decision. One of two types of "hammer" clauses are found in most CPPI forms: the "full hammer" (for lack of a better term); or the "modified hammer." The Full Hammer. Essentially, the full hammer states that if the insured refuses to consent to settlement, the most the insurance carrier will pay is the amount for which the claim could have been settled plus the defense cost incurred at the point of the settlement acceptance. All costs in addition to this are borne solely by the insured. For example, the carrier could have settled the claim for $100,000, but the insured refuses to settle, choosing rather to fight the charges in
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court. In court the jury awards $200,000. If the "full hammer" is in effect, the insurance carrier would pay the $100,000. The additional $100,000 would be paid by the insured (ignoring all other claims expenses).
hammer" applies a 50 percent coinsurance provision, the insurance carrier would pay the $100,000 initial offer plus 50 percent of the amount over $100,000, or $50,000 in this case (ignoring all other claims expenses). The insured would have to pay $50,000 out of pocket – not The Modified Hammer. The modified hammer does including the additional defense costs. not punish the insured as extensively as the "full hammer" wording. Modified hammer consent to Some carriers put a little velvet on the hammer and settle clauses are often referred to as a try to incentivize the insured into settling by "coinsurance clause" (not to be confused with offering a reduction in the self-insured retention property coinsurance) because the insurance (SIR) if the insured consent to settle. At least one carrier agrees to split with the insured the amount CPPI carrier offers a 10 percent SIR reduction if that exceeds the accepted settlement plus defense the insured consents to settle. costs to that point; essentially making the insured a "coinsurer" on all amounts over the settlement The "full hammer" is by far the most common amount. consent to settle provision used in CPPI forms. However, a few CPPI providers do offer a Using the above example again, the carrier could "modified hammer." Knowing which hammer will have settled the claim for $100,000, but the hit the insured is important to know before insured refuses to settle, choosing to fight in court. deciding which carrier to use. In court the jury awards $200,000. If the "modified Who Needs CPPI and Who Are the Markets? Coverage gaps and a much broader application and understanding of "professional services" means every contractor needs CPPI coverage. Industry literature states that CPPI coverage is designed or tailored to meet the needs of: General contractors; Construction managers; Design-build firms; Heavy and highway contractors; Specialty, trade and artisan contractors; Environmental contractors; and Remediation contractors. As you can tell, this list leaves out very few contracting risks. Most contractor risks need CPPI protection.
CORNER
HOW TO REDUCE CELL PHONE SPAM TEXTS
According to the Federal Trade Commission, “It’s illegal to send unsolicited commercial messages to wireless devices, including cell phones and pagers, unless the sender gets your permission first.” The same goes for text messages sent from an auto-dialer. This applies to your organization also, so be sure you comply with FTC guidelines. What Not to Do with Spam Texts Here are two words you should never use for text spam. Have you ever replied to a text message with STOP or UNSUBSCRIBE? For a legitimate business, those words will tell them you want to stop receiving the texts. If it is an unmistakable spam message, never respond with those words. Spammers are hitting up thousands of people in search of
working contact information. When you interact, you’re saying, “Yes, this phone number belongs to someone!” That’s great news for them. It lets them know you’re a real person they should target more often. You think you’re putting an end to the noise, but you’ll just make it worse. Report the Spam Message Whether you use Verizon, Sprint, TMobile, or AT&T, you can easily report the message as spam. All of the major carriers use a central database to identify spam senders. You forward your spam message to 7726, and it will be added. Here’s how: iPhone Find the spam message. Press down on it until a new menu pops up.
Tip #8 By Steve Anderson Press More in the lower right. Then, tap on the arrow icon. 'Now you’ll see a forwarded message. Tap on the “to” field. Then, enter 7726 and send the message.
Android Hold down on the spam message. Hit the forward arrow. Send the message to 7726. By forwarding these messages, you’re helping carriers recognize that number as malicious. And, eventually, they might be able to block that number from sending further messages. If you want to go above and beyond the call of duty, you could contact the FTC and file a formal complaint. While this requires more time and effort, it’s an excellent way to fight against spammers.
DIGITIZE PAYMENTS TO INCREASE CUSTOMER SATISFACTION... AND MORE ePayPolicy
The trend is clear. People today prefer to pay digitally. That includes everything from Amazon purchases to their monthly utility bill – and yes, their insurance premiums! While there are still a few diehard check writers out there, digital transformation is here to stay. The Many Benefits of Digital Payments Customer convenience is often cited as the main reason businesses offer digital payments. And statistics bear that out. In a survey of billing executives, 97 percent reported higher customer satisfaction as a benefit of digitizing payments. The report, called “The Digital Edge”, also found other key business benefits, such as: reduced collection times (86.5%), increased operational efficiency (90.8%), cost reductions (81.6%) and gaining a competitive edge (92.3%).
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Who wouldn’t want to collect payments faster and Where to look and what to look for more efficiently, at less cost, and gain a Which payment system is right for your competitive edge? organization? Read reviews, ask your state association rep (or look on their website for Do Your Research preferred partners), talk to your IMS provider. As you know, the insurance industry has Which payment processor do they recommend? historically not been an early adopter of You want a system that streamlines internal technology and innovation. However, that is processes, expedites receivables and integrates changing. ePayPolicy has customers that have well with other systems already in place (or been using our digital payment solution for five or planned). more years. Because of the fiduciary nature of collecting The pandemic also created a spike in insurtech insurance payments, a generic payment system adoption, as the industry turned to technology for built for retail transactions is likely not the best remote team communication, customer choice. You will want to focus your search on relationship management and more. Customers solutions designed specifically for the insurance and accounting teams needed no-touch payment industry. This will give way to insurance-specific options not only because of the risk of Covid, but features like management system integrations, and also because checks being delivered to an empty you can also rest assured that customer support office was of no use. Many of the habits left by the will understand your specific problems when Covid pandemic are here to stay. needed.
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CUSTOMERSATISFACTION Try Before You Buy Compare apples to apples. Understand what your payment processing vendor charges for setup, as well as their monthly subscription fee. Do they offer a free trial? Do you have to sign a multi-year contract? What kind of training/support do they provide? At ePayPolicy, we offer 60 days free to new users, no contract or set-up fees. Customer Adoption is Key According to The Digital Edge survey, one of the biggest hurdles to digitization is employees with insufficient technical skills (59.6%). Be sure to choose a digital payment system that’s easy for your employees to use. After all, they will be the ones behind customer adoption. Encourage everyone to advocate for digital payments. Announce proudly to customers (and prospects) that you now take payments online.
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Continued from page 29 Promote it across your website, newsletters, press releases, ads and social media. This will be welcome news! But don’t count on customers to remember from one payment to the next. Put a “Pay Now” link on your invoices, in your emails, and a big, can’t-miss button on your website. Show customers how simple it is to pay their premiums through your digital payment portal. Increased loyalty is definitely part of customer satisfaction! With so many business benefits and literally no downside, isn’t it time to prioritize digital payments?
Big I Markets
SET YOUR CLIENTS ON A SECURE PATH WITH COALITION CYBER LIABILITY QUOTE
How do you address cybersecurity with your Coalition's free Learning Center is specifically clients? Where do you start? With a quote from Big designed to help businesses tackle the most “I” Markets’ cyber carrier partner, Coalition. common security tasks they face: In a matter of minutes you can provide your clients with a cyber liability quote and Free Cyber Risk Assessment. The free assessment includes: Critical alerts and remediation advice Customized security recommendations Analysis of all discovered servers and assets for known security vulnerabilities Analysis of all suspicious and vulnerable ports Dark web scan to find stolen data and credentials Technology vulnerability detection and patch manager
Basic cybersecurity knowledge Tools and techniques for keeping business emails safe Protecting off-the-shelf and custom web applications Protecting the integrity and security of a domain name Types of malware and how to protect your business Security compliance, where to get started, and how Coalition can help Security best practices from industry professionals and guidelines
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CYBERLIABILITY Coalition's security engineers are ready to point you and your clients in the right direction. Log into www.bigimarkets.com to request a quote today! Reach out to Big “I" Markets' Cyber Program Manager, Carla McGee, at carla.mcgee@iiaba.net if you have any questions or would like to walk through a quote. Not yet registered for Big “I” Markets, the online market access program available exclusively to Big “I” members featuring no fees, no minimums and ownership of expirations? Complete a simple and free registration online at www.bigimarkets.com.
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Continued from page 32 This article is intended for general informational purposes only. IIABA and its subsidiaries and affiliates shall not be held responsible in any way for, and specifically disclaim, any liability in any way relating or connected to any reliance on or use of this article. The information contained or referenced herein is not intended to constitute and should not be considered legal, accounting or other professional advice, nor shall it serve as a substitute for obtaining such advice. If specific legal or other expert advice is required or desired, the services of an appropriate, competent professional, such as an attorney or accountant, should be sought. Copyright © 2020, Big I Advantage, Inc. All rights reserved. No part of this material may be used or reproduced in any manner without the prior written permission from Big I Advantage. For permission or further information, contact Big “I” Markets, 127 South Peyton Street, Alexandria, VA 22314 or email at bigimarkets@iiaba.net.
Your State's Connection to IMS Independent Market Solutions
Independent Market Solutions (IMS) was established in 2007 with the goal of creating greater market access for member agents. IIABL made the investment to be a part of IMS and, since that time, we have grown market availability in Louisiana to include several participating carriers. The purpose of IMS is to provide member agents access to quality insurance markets and alternatives that may be otherwise unavailable. IMS creates marketplace leverage through its negotiated contracts, which can be particularly helpful for smaller or rural agents.
IIABL membership allows your agency to sign-up for the program and gain carrier appointments as an IMS sub-producer at no additional cost. Agencies are paid competitive commissions, enjoy 100 percent ownership of expirations, and can participate in earned contingencies. Additionally, several IMS markets feature the opportunity to “graduate” to a direct appointment once certain production goals are met – again, at no additional cost to your agency. Ultimately, our mission is to add to the success and prosperity of independent agencies by providing viable market access through IMS. IIABL is a proud owner of IMS, along with our association colleagues in other states. To learn more about the carriers IMS could help connect you with, click here.
Our Insurance Company Partners Include:
LA SUPREME COURT UM SELECTION FORM DECISION The Louisiana Supreme Court granted review in the case of Johnny Carval Havard vs. Ricky Jeanlouis to determine whether a stamped signature on an uninsured/underinsured motorist (“UM”) coverage rejection form, affixed by the administrative assistant of the corporate insured’s owner and president, complied with the statutory requirement that the UM form be signed by the named insured or his legal representative. Because the stamped signature was affixed on behalf of the legal representative and not by the legal representative himself, the Supreme Court agreed with the court of appeal that the lack of prior written authorization to the administrative assistant rendered the UM form invalid.
2021-C-00810 JOHNNY CARVAL HAVARD VS. RICKY JEANLOUIS, ET AL. (Parish of Lafayette) AFFIRMED. SEE OPINION. Weimer, C.J., dissents and assigns reasons. Crain, J., dissents in part and assigns reasons. McCallum, J., dissents and assigns reasons.
WORKING WITH ADJUSTERS TO GET CLAIMS SETTLED The core of claims management is communication and building solid relationships. If you work with a carrier frequently, or handle large accounts with dedicated adjusting teams, you'll work with the same adjusters over time. Whether you're inquiring on a property damage claim or a workers' compensation injury, building a solid relationship with claims adjusters can help you move difficult claims toward settlement. Become a supportive agent, but don't go overboard As you compete against larger brokers, you'll find they have dedicated claims teams that help to manage stalled or difficult claims. If you don't help your clients through stalled claims, your competitors may outpace you at renewal. While many agents say, “I don't have a claims background," there are other agents with solid coverage skills who are willing to wade in when coverage issues arise or when claims are at a standstill. When you can offer insight on claims management, it moves the client from a low-bid mindset to a mentality that says, “I don't just hear from my agent at renewal, I value the services I receive from this agency." On commercial accounts, consider setting Google alerts so that you receive an update if something newsworthy happens to that client. For example, during the pandemic, many service contractors found new revenue streams by pursuing other trades. You don't want to be the last to know what your clients are doing.
By Nancy Germond
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CLAIMSSETTLED Everyone loves to talk about themselves and their business, according to one errors & omissions (E&O) expert. “Be nosey. Ask what all they do, what machinery and locations they have and how many people work for them. The more you can get a customer to talk, the more you will learn about their insurance needs. The more insurance you sell them, your chances of suffering an E&O claim diminish while your commissions increase. Never assume you know all there is to know about any of your customers." Never fall for the “I want the same coverage I had from the other agent" trap. Do not just duplicate the coverage procured by your predecessor. Ask questions and make your own coverage suggestions. The building blocks of solid relationships with adjusters Our adjusters and claims managers are integral to keeping our clients happy. First, understand that most adjusters are highly trained college graduates, earn professional designations and are proud of their careers. If they received proper training, they will look for a way to provide coverage, not deny coverage. Giving them proper respect by addressing them by name, being cordial and promptly returning their phone calls or emails are building blocks in developing trust – the most important component in any relationship. Trust is only built over time with consistent behavior and an ability to admit when we may be wrong. Make some small talk before you jump into the problem. Perhaps ask a few questions. Why did you get into claims? Do you enjoy your work? What are your hobbies? Kids, animals? Most of us love to talk about our kids and pets.
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Continued from page 37 On larger claims, set a diary to check with the adjuster or your insured to determine if the claim is moving forward. Use caution when advocating, however. Our E&O expert says this: “If you insert yourself into the claims process, you are guaranteeing you will be sued along with the carrier for an adverse claim decision." Adjusters rarely feel the love When it comes to building relationships with adjusters, stand out among your agent peers. When possible, visit your adjusters with a box of candy or donuts for the entire claim unit. Depending on the carrier's rules, a discussion over lunch may be more fruitful than a phone call or email. In fact, it's safer to involve yourself in claims management with phone conversations rather than email to avoid a paper trail, according to one E&O expert. Some appropriate humor can lighten the mood. Praise jobs well done. Adjusters spend hours and hours on complex claims, and rarely hear an “attaboy" or “attagirl." A letter to the branch manager praising an adjuster is indeed a rare thing. Stand out from the crowd by sending praises in writing, even if it's only an email. This is the best thing you can do for an adjuster and his or her career.
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CLAIMSSETTLED Be “that agent" who consistently treats adjusters with respect, even If you don't necessarily agree with a coverage decision. (More on how to argue a coverage denial later.) Don't be the agent who makes an adjuster's hair stand up on the back of his or her neck when they recognize your phone number. Pareto's Rule in claims handling Just like in life, 20% of your claims will cause 80% of your problems. Take a strategic role in claims management, picking your battles. By ensuring service standards on larger accounts before claims roll in, you'll have a gauge by which you can measure the insurer's performance. Service expectations for workers' compensation claims Here are some best practices for workers' compensation claims handling. wenty-four-hour contact by T the adjuster to the insured, the injured worker, and the medical facility on all claims. Insurers generally consider a written medical report sufficient. Ensure your client has a solid return-to-work (RTW) program and that your adjuster makes RTW a priority. If your insured does not have a RTW program, can your carrier assist? On larger accounts or those with a self-insured retention or a high deductible, are the same group of adjusters handling your client's claims? This is exceptionally important in RTW because the adjuster knows whom to call to get the injured employee back to work.
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Continued from page 38 Has the employer provided the adjuster with a current, complete job description? If not, encourage your clients to update the description and furnish the carrier with up-todate job descriptions. Are undisputed medical bills paid promptly?
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CLAIMSSETTLED Every file should have a clear plan of action – the next steps the adjuster takes to move the claim toward closure. Anyone should be able to pick up the file and determine the next steps needed to move the claim forward. Asking the adjuster “What is your plan of action on this file" can ensure the adjuster has a strategy and isn't simply putting out fires as they occur. The goal of all workers' compensation claims: maximum medical improvement (MMI). The industry defines MMI as the best the injured worker will get, either with or without further treatment. The treating physician considers their injury stabilized. What is the adjuster doing to move the injured worker toward MMI? Assisting in payroll reporting One of the biggest stumbling blocks with your insureds is managing their payroll exposures and their experience modification factors on their workers' compensation program. There are some tools available like ModMaster® that can help pinpoint emod problems, but one of the simplest things you can do is set a quarterly diary to contact your insureds about their payroll exposures. It's also an opportunity to find out what's going on in their business and to cross-sell. If you do this simple step, be consistent across insureds and be timely. Of you approach it sporadically or pick and choose which clients to remind, or miss a time, it can set you up for a professional liability claim. Especially since COVID, many service companies received a flood of new business and had higher payrolls. Others, such as retail establishments, lost employees and payrolls declined sharply. If you're reminding your clients to update payroll figures, as well as annual revenue estimates, they're much less likely to receive an expensive additional premium surprise at audit. Reviewing loss runs at least 90 days prior to renewal to look for missed subrogation opportunities, claims where adjusters can reduce or close reserves, and other issues can help you improve your clients' e-mods and differentiate you from the pack.
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Continued from page 39 Service expectations on other types of property and liability claims Here are some best practices for other types of claims handling. Twenty-four-hour contact, returning calls to you and the insured. The carrier does not push your insureds to use only their approved vendors. Full investigations on claims that appear comparative or doubtful liability. Explanations of denials with appropriate declination letters that include pertinent policy language. Explanations and contact when alleging fraud or arson. On all claims, you should have a voice in the carrier's payment of frivolous/no liability claims, or when the carrier elects not to pursue subrogation. However, as frustrating as it is when a carrier takes the easy way out and decides not to pursue
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CLAIMSSETTLED subrogation or pays a contested claim, that's generally the right of the carrier. Read the insured's policy form carefully to see if it contains a provision allowing the insured the right to appoint counsel, because that makes things a bit trickier. When you disagree with a claim denial During COVID-19, some carriers asked agents to deny claims. Never deny a claim on behalf of the carrier, even if they tell you to. We have several good articles on claim denials and a follow-up article on Insurance Illustrated.
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Continued from page 40 Claims supervision is paramount Today, meetings and project management bury most claim supervisors and managers. They rarely physically pull a file. Instead, they rely on the adjusters' notes and overview of documents in the file, which can be wildly scant or downright inaccurate. In fact, the file may have fallen off diary and be sitting, wondering when the adjuster is going to pay any attention to it.
If you encounter a problem claim after talking to the adjuster, ask a supervisor to review the claim, or talk to the claim manager. If your agency When you believe the insurer may not pay the doesn't have a full-time claims advocate and your claim, you may want to forewarn your insureds, book is big enough, consider hiring a retired but let the insurer be the “bad guy." Don't deny the adjuster to review your claims. Today's adjusters claim yourself. miss many, many subrogation opportunities. Add in the incorrect coverage decisions that occur due If you disagree with a coverage decision, talk to the to understaffing and a herd of newly hired adjuster to see why he or she is denying coverage adjusters who didn't get proper training before or issuing a reservation of rights letter. Make sure management places them on a high-volume desk, you understand the carrier's position. If you think and the service you should receive on claims may they're wrong, review the coverage provision they not be where you expect it. rely on, and offer your input. If you can't convince the adjuster that you're right, you can always turn to the Big I's Ask an Expert service. Many, many claim denials have changed due to input from our great team of coverage experts. Avoiding E&O claims arising from claims matters Document every conversation. Don't rely on sticky notes, get those notes into your agency system at the time you talk to your insured. As insurance adjusters constantly hear from their supervisors, “If it's not in the file notes, it didn't happen." When bad faith allegations arise, the claim may come after the carrier resolves or denies the claim. If you're concerned that your insured may draw you in, put your E&O carrier on notice. Early involvement by the E&O carrier can help protect your interests. Finally, never apologize to your customer for a claim denial or an uncovered loss. It's fine to say you're sorry for their loss, but never make it sound like you're apologizing for you or your agency's handling of their account.
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CLAIMSSETTLED A few final tips Almost every agency has vendors who arrive bearing gifts. These include restoration vendors, glass companies and more. While we want to trust people and marketing people often have great teeth and are very nice, it's best to rely on vendors your carriers recommend. If you recommend a board-up company after a burglary, for example, and the insurer denies that portion of the claim because it's a tenant-occupied building and the carrier asserts it's the building owner's responsibility to pay for emergency repairs, you're in the middle of a mess. Talk to your claims department for a list of approved vendors. When in doubt, call the claim department and allow them to walk your insureds through their immediate post-loss needs. Don't provide documents on claims without a discussion with your E&O carrier or incur any costs to help settle a claim. Don't agree to a deposition with the carrier without your E&O carrier's involvement. You can always reach out to your state association, as well. Successful advocacy depends on the timing. In the beginning to assist in reporting a claim, or perhaps when the carrier denies a claim, advocacy is usually in order. If the denial is proper, it's inappropriate to advocate for coverage. If your client believes you've made a mistake, stop advocating and turn to your E&O carrier for support and input. Certainly, once the insured has filed suit against the carrier, stay out of the process lest you end up as a defendant.
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Continued from page 41 Final thoughts Poor claims service and claim denials are probably the biggest reasons insureds change agents. Your claims efforts and honing your consultative skills used cautiously can help you retain new clients and receive strong referrals from existing clients. To learn more about claims advocacy, visit this link on the Big I Guardian page. Find the webinar entitled, Avoiding E&O Exposure When Advocating for Customer Claims. A balanced, collegial approach to claims management will work in your favor every time. First published: June 17, 2022
Spring flooding is almost here and there is a 30-day waiting period before coverage begins.
Flood insurance benefits do not have to be paid back (as you do with disaster-related assistance loans).
Coverage is relatively inexpensive with an annual average premium of about $500.
Renters can purchase flood insurance contents coverage for personal belongings or business inventory.
If the community participates in the NFIP, property owners are eligible to get flood insurance vent if located outside of the 100-year flood plain.
Basement coverage includes cleanup expense and repair or replacement of items such as furnaces, water heaters, washers, dryers, air conditioners, freezers, utility connections, and pumps.
Payments can be received for floodrelated losses for over-land flooding even if no disaster was declared.
A partial payments can be requested immediately after the flood, which can help with an even faster recovery.
Property owners can depend on being reimbursed for flood damages because NFIP flood insurance is backed by the federal government.
buying flood insurance is the best thing a property owner can do to protect their home and business, and family's financial security from a flood.
To find out if your community participates in the National Flood Insurance Program, go to http://www.fema.gov/fema/csb.shtm. For assistance in placing the policy, you can depend on Big "I" Flood. Learn more about the Big "I" Flood program at www.iiaba.net/Flood
What is the Best Insurance Sales Channel, Direct or Agent-Assisted Bill Wilson April 25, 2022
I was reading this article in the latest edition of the Coverager email newsletter: “The Big Bet” This was excerpted from a 2004 Berkshire Hathaway annual report: “But a man named Leo Goodwin had an idea for an even more efficient auto insurer and, with a skimpy $200,000, started GEICO in 1936. Goodwin’s plan was to eliminate the agent entirely and to deal instead directly with the auto owner. Why, he asked himself, should there be any unnecessary and expensive links in the distribution mechanism when the product, auto insurance, was both mandatory and costly. Purchasers of business insurance, he reasoned, might well require professional advice, but most consumers knew what they needed in an auto policy. That was a powerful insight.” Effectively, this expressed GEICO’s philosophy that: (1) most consumers know what they need in an auto policy and (2) agents are “unnecessary and expensive” links in the distribution mechanism.
The first premise is easy to dispel. The typical auto insurance consumer has absolutely no idea what they need when it comes to limits and coverages. The typical auto insurance consumer has no idea about the potentially catastrophic coverage differences between auto policies. I have written and spoken about this extensively. To illustrate, just search my web site for “commodity” and/or “commoditization.” The perception of auto insurance can be attributed largely to the almost exclusively price-focuses advertising of some members of the insurance industry and it’s reinforced by the hundreds or thousands of consumer media articles about “how to save money” on car insurance.
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The premise that most consumers are capable of shopping for auto insurance on their own is ludicrous. Warren Buffet doesn’t even understand this based on his 2004 comment [emphasis added]:
insurers. But that’s not how it’s sold by good, competent agents who provide a service that is far from “unnecessary and expensive.” I debated this in this article:
“Insurers have generally earned poor returns for a single reason: They sell a commodity-like product. Policy forms are standard, and the product is available from many suppliers, some of whom are mutual companies (‘owned’ by their policyholders rather than stockholders) with profit goals that are limited. Moreover, most insureds don’t care from whom they buy. Customers by the millions say ‘I need some Gillette blades’ or ‘I’ll have a Coke’ but we wait in vain for ‘I’d like a National Indemnity policy, please.’ Consequently, price competition in insurance is usually fierce.”
“Can Consumers Act As Their Own Insurance Agent?”
Given that insurance is NOT a commodity, the term “commodity-like” might be better expressed as “similar.” Price competition is fierce because that’s how insurance is largely sold…by too many
First of all, ALL insurers sell through agents. You can’t sell insurance without being a licensed agent. I believe, if you compare the relatively meager commissions paid to agents to the salary and benefits paid for direct-sales insurer employee agents, there probably is not a great deal of difference. If you factor in the BILLIONS in advertising costs these insurers assume, especially if coupled with the loss ratios produced by good agents, insurers whose primary sales channels are agents might even be able to sell a superior AND less costly insurance product than direct-sales channels.
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SALESCHANNEL When you read articles about insurance sales success, they almost always focus on what’s best for the insurer, not the insured. GEICO may be viewed as a highly successful insurer from a market share and profitability standpoint, but are their POLICYHOLDERS better served by not having good agents assist in exposure analysis and advocacy at claim time? Bill Wilson Founder at InsuranceCommentary.com One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information
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Continued from page 46
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IIABL EDUCATION AUGUST 2022 CALENDAR OF EVENTS SUNDAY
MONDAY
TUESDAY
July 31
1
2
7
8
9
WEDNESDAY
3
LIVE WEBINARS! 8-11a That's Personal: Home & Auto Exposures Your Insured Doesn't Share (& Why That's Bad)
10
LIVE WEBINARS! 8-11a Why Business Income is the MOST Important Property Coverage
12-3p Flood Insurance, FEMA & the NFIP
14
15
16
LIVE WEBINARS! 8-11a Cyber-Evolution, Exposures, Incidents & Ins
8-10a Properly Calculating & Insuring the Bus Inc Exp
17 LIVE WEBINARS! 1-2p Homeowners Loss Settlement Issues
1-3p Why COI... Just Why?
21
22
23
24
LIVE WEBINARS! 2-4p ISO's 2022 Homeowners' Changes
28
29
30
31 LIVE WEBINARS! 1-2p Insurance Issues for the Commercial Tenant
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& EVENTS THURSDAY
4
LIVE WEBINARS! 8-10a How to Understand Commercial Property Underwriting & COPE
11
FRIDAY
5
12
SATURDAY
6
13
18-20 Young Agents Conference August 18-20, 2022 Sheraton New Orleans Hotel
25
26
LIVE WEBINARS! 12-3p Agent's E&O: Duties, Best Practices, Operations, Workflows, & Certificates
Sept 1
27 Kathleen O'Regan's Birthday!
2
29 3
IIABL CE ON DEMAND E&O Risk Management Ethics Flood Commercial Lines Courses Personal Lines Courses Professional Development
OTHER EDUCATIONAL RESOURCES
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ADVERTISER INDEX COMPANY
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COMPANY
PAGE
Accident Fund Insurance Company Agile Premium Finance Allied Trust Insurance Company Amerisafe AmTrust North America AmWINS Access Home Insurance Berkshire Hathaway GUARD Insurance Burns & Wilcox Ltd. Commercial Sector Insurance Brokers EMC Insurance FCCI Insurance Group Foremost Insurance Group Forest Insurance Facilities The Gray Insurance Company Homebuilders Self Insurers Fund Imperial PFS
9 47 42 50 19 31 18 7 40 36 24 13 38 23 41 5
Iroquois Lane & Associates, Inc. LCI Workers' Comp LUBA LWCC National General, an Allstate company Progressive RISCOM RLI RPS/Risk Placement Services SafePoint Insurance Stonetrust Summit United Fire Group UPC Insurance Wright Flood
30 15 29 33 11 20 3 10 46 25 26 39 16 27 43 21
PAGE 52
LOUISIANAAGENT
IIABL 2022-2023
BOARD OF DIRECTORS & OFFICERS PRESIDENT, MICHAEL SCRIBER Scriber Insurance - Ruston PRESIDENT-ELECT, ARMOND K. SCHWING Schwing Insurance Agency, Inc. - New Iberia SECRETARY-TREASURER, BRET HUGHES Hughes Insurance Services, Inc - Gonzales NATIONAL DIRECTOR, JOHNNY BECKMANN, III Assured Partners - Metairie PAST PRESIDENT, DONELSON P. STIEL David H. Stiel, Jr. Agency - Franklin YOUNG AGENT REPRESENTATIVE, KRYSTAL GATHE HUB International Gulf South, Ltd. - Baton Rouge ANN BODKIN-SMITH Thomson Smith & Leach Insurance Group - Lafayette MATTHEW DEBLANC Continental Insurance Services - Marrero CHRISTY DESOTO 1st Insurance of Marksville - Marksville ROB W. EPPERS Risk Services of Louisiana - Shreveport MATT GRAHAM Lincoln Agency - Ruston CHRISTOPHER S. HAIK Haik Insurance Holdings, LLC - Lafayette STUART HARRIS McClure, Bomar & Harris, LLC - Shreveport ROSS HENRY Henry Insurance Service, Inc. - Baton Rouge CHARLES H. LEBLANC Bourg Insurance Agency, Inc. - Donaldsonville CRAIG MARTEL Insurance Unlimited of LA, LLC - Lake Charles LYDIA MCMORRIS Alliant Insurance Services - Baton Rouge A. EUGENE MONTGOMERY, III Community Financial Insurance Center, LLC - Monroe JOE KING MONTGOMERY Thomas & Farr Agency, Inc. - Monroe HARTWIG "ROBBY" MOSS, IV Hartwig Moss Insurance - New Orleans ROBERT LOUIS PALMER, JR. Insurance Underwriters, Ltd. - Metairie RANDY PERISE Blumberg and Associates - Ponchatoula ROBERT G. RIVIERE Riviere Insurance Agency - Thibodaux ROBERT STONE Stone Insurance, Inc. - Metairie
