Kentucky IA - May/June 2017

Page 1

May/June 2017

How do you sell an intangible product on social media? Page 15

6 Habits of Tech-Savvy Agencies Page 22

Time for a New AMS? Page 24


Together... We’re making a difference to our members, to our agents, and in our community.

200 Executive Park, Louisville, KY 40207 502.894.8484 | 800.367.5372 | www.kesa.org


By: Sabrena Sally, CPCU

Page 10

Inside

What's

Agency E&O Considerations When Using Social Media

Contents

10 Agency E&O Considerations When Using Social Media 15 How Do You Sell an Intangible Product on Social Media? 18 Is your website doing more harm than good?

Page 15

20 Top Three Reasons a Trusted Choice Profile is Better Than an Agency Website 22 Technology - an investment, not an expense: 6 Habits of Tech-Savvy Agencies 24 Time for a New AMS? 27 Regulating Cyber Security: Cyber Extortion

Page 27 The Kentucky IA is the official magazine of the Independent Insurance Agents of Kentucky, and is published bi-monthly. Editorial offices are located at 13265 O’Bannon Station Way, Louisville, Kentucky 40223. Telephone:(502) 245-5432 Email: iiak@iiak.org Fax: (502) 245-5750 The Kentucky IA welcomes all advertising and editorial submissions. Inquiries for advertising, news releases and editorial contributions can be directed to Nikki Robins at the editorial office address or via email at nrobins@iiak.org

In Every Issue 4 From the Chair

33 Industry Partners

5 DOI News

34 Advertiser Index

6 Education Calendar

34 Classified Ads

33 Upcoming Events

34 Social Media Links

Mission Statement The mission of the Independent Insurance Agents of Kentucky is to be the preeminent advocate for Kentucky Independent Agents and support their business and professional development needs.

www.iiak.org | May/June 2017 | 3


Officers George L. “Chip” Atkins Chair, Louisville 502.585.3600 Michael G. Johnson, CIC Chair-Elect, Lexington 859.233.1461 Aaron LaRue Vice Chair, Bardstown 502.348.0050 James D. England, AAI Treasurer, Pikeville 606.437.7361 Stephen R. Kinkade, CPCU, AAI National Director, Leitchfield 270.259.5465 David M. Houk Immediate Past Chair, Horse Cave 270.786.2724

Directors Allen J. Crawford, CIC, CSRM Somerset, 606.679.6311 Kevin T. Desmond Bellevue, 859.491.5100 Eric S. Harden Young Agent Chair, Louisville 502.459.7500 Sharon B. Hill Jamestown, 270.343.3144 Skip McGaw, CIC Madisonville, 270.821.3122 Crystal Reid, CIC Madisonville, 270.994.3737 Ray A. Robertson, CIC Mt. Sterling, 859.498.3410 Laura Yount, CIC, CISR London, 606.878.0100

Staff Peggy P. Porter President & CEO Katie M. Freshley Education & Events Director Amy Good Administrative Assistant

Chair From the

Happy almost summer everyone!

Your association just finished our 2017 Road Shows with stops in Kentucky Dam Village, Bowling Green, Owensboro, Louisville and Northern Kentucky. Each meeting had a great turnout and we hope that all who attended found them informative and worth the time out of the office. In this issue we will be discussing technology - from social media to Agency Management Systems and several topics in between. Here are a few things your association offers that I hope you’re taking advantage of: Trusted Choice Digital Review of Websites/Social Media: Ever wonder how your website stacks up? Free of charge the Trusted Choice team will perform a thorough review of your agency’s website, looking at key factors that influence visibility and usability. From search engine optimization (SEO) and blogs, to broken links and website analytics tools, the review will surely be eye-opening for your agency. Contact Madeleine.Stern@iiaba.net or Demarcus.Johnson@iiaba.net. TrustedChoice.com: A turn-key solution for members interested in generating more online customers. Having a digital presence can be daunting and TrustedChoice.com has a solution for members to increase search optimization for online personal and commercial referrals for those with the Advantage Subscription. (See page 20 for 3 Reasons Why a TrustedChoice.com Profile is Better than an Agency Website) DocuSign is the leader in eSignature transaction management, allowing for easy, efficient, and secure signing of electronic documents. As the industry leader, DocuSign has over 70% market share. Accessible anytime, anywhere, on any device, businesses of all sizes and industries solve their paper problems by replacing manual, paper-based methods with DocuSign to accelerate transactions to increase speed to results, reduce costs, improve visibility and control and delight customers. Most documents are signed within one hour and you get a discount for being an IIAK member! Our duty as modern insurance agents is to ensure that we are taking every measure to keep our client’s information safe. Don’t think that hackers won’t target you because you’re a small agency in Kentucky. Hackers are not only stealing information, but also using it as a way to extort funds from businesses in order to get it back. See page 27 where IIAK’s General Council Rick Pitts discusses one of the newest culprits - as well as what’s being done by the NAIC. Sincerely,

Tara T. Purvis Marketing Director Nikki S. Robins Communications Director Kristie Weyer, CISR Insurance Services Director

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Chip Atkins


Department of Insurance News: New leadership appointed

The Department of Insurance has new leadership with the appointment of Nancy G. Atkins as commissioner and Patrick O’Connor and Tony Butcher as deputy commissioners.

Nancy Atkins

Atkins, a 33-year veteran of the insurance industry, previously served as deputy commissioner. She replaces Brian Maynard, who left the commissioner’s job at the end of April. She has worked as a licensed agent and an employee benefit manager. Prior to joining DOI, she was director of sales and marketing for Bluegrass Family Health Inc., where she managed a large team of agents and account representatives. Atkins also worked for Blue Cross Blue Shield of Kentucky and Advantage Care Inc., focusing largely on employee benefit plan management for small and large corporations throughout the state. She was a licensed nurse and a former hospital administration professional.

Patrick O’Connor

O’Connor came to DOI in October 2016, serving as executive legal advisor. He will continue in that role, assisting the department with high-priority legal, policy and legislative initiatives. This includes an examination of the state’s insurance code under the Red Tape Reduction initiative. He was an attorney with the insurance regulation service team at Frost Brown Todd LLC, advising national and international insurance companies on regulatory compliance needs. He also assisted with drafting model law recommendations to the National Association of Insurance Commissioners (NAIC) and provided guidance to other organizations regarding state and federal insurance regulatory changes.

Tony Butcher

Butcher’s appointment was effective May 16. Most recently, he was vice president of sales and marketing for Epic Insurance in Louisville, overseeing a sales team of 21 agents. He worked at Humana for approximately 18 years, holding positions in both customer service and sales in the Louisville and Green Bay offices. His most recent role at Humana was director of key accounts, where he was involved in managing Humana’s largest commercial customers, including the wellness program through Humana Vitality as part of the contract with the Kentucky State Employee Health Plan. Butcher also worked as a vice president for Schneider National, a long distance and data communications company, and as general manager for Vascor Inc., a logistics business working closely with Toyota Manufacturing in Georgetown.

Contact Department at: www.iiak.org | May/June 2017 | 5


Continuing Education

IIAK has a range of classroom and webcast continuing education courses as well as valuable designation seminars. See below for our latest offerings.

ON-SITE COURSE:

E&O Risk Management: Meeting the Challenge of Change October 5 • IIAK Education Center

ONLINE COURSES VIA ABEN: Date/Time

Seminar Name

July 19 @ 10 am

Agency Management Based E&O and Ethics

3

July 11 @ 1:30 pm

Annuity Basics and Where They Fit

1

August 24 @ 10 am

Business Auto Claims That Cause Problems

2

July 18 @ 2:30 pm August 16 @ 12 pm

Business Fraud Protection

1

July 13 @ 11 am August 21 @ 11 am

Certificates of Insurance – Emerging Issues and Other Stuff that May Scare You!

3

July 5 @ 2 pm

Commercial Lines Claims That Cause Problems

2

July 14 @ 10 am

Commercial Property Endorsements That Can Make You Money!

2

July 5 @ 10 am

COPE – Property Underwriting and Effective Loss Control

2

July 10 @ 3 pm August 18 @ 11 am

Data Privacy Insurance

2

July 10 @ 10 am August 18 @ 2 pm

Directors and Officers Liability Insurance

2

July 10 @ 1 pm August 14 @ 1 pm

Double Trouble - Certificates of Insurance and Business Auto Endorsements

2

July 20 @ 10 am August 1 @ 9 am

E&O Risk Management – Meeting the Challenge of Change (6 hour course)

6

July 25 @ 10 am

E&O Risk Management – Meeting the Challenge of Change (Part 1)

3

July 25 @ 2 pm

E&O Risk Management – Meeting the Challenge of Change (Part 2)

3

July 18 @ 2 pm August 16 @ 12:30 pm

Estate Planning Basics

2

July 18 @ 9 am

Ethics and Business

3

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CE Credits


Date/Time

Seminar Name

CE Credits

August 23 @ 10 am

Home Based Business Exposures

2

July 24 @ 11:30 am August 4 @ 2:30 pm

Hot Topics in Personal Lines

2

August 2 @ 10 am

Liability Issues to Worry About – Indemnity Agreements and Additional Insureds

2

July 5 @ 9 am

Long Term Care Insurance

2

July 24 @ 2:30 pm August 4 @ 11:30 am

National Flood Insurance Program Basic Course - 2016

3

July 26 @ 3 pm August 29 @ 2 pm

Personal Fraud Protection

1

August 3 @ 11 am

Personal Lines Claims That Cause Problems

2

July 20 @ 3 pm August 7 @ 11 am

Professional Ethics in the Insurance Industry

3

July 5 @ 2 pm August 2 @ 2 pm

Property & Liability Concepts - Comp. Cov. Series

2

July 13 @ 10 am August 10 @ 10 am

Rental Cars: More Than Meets the Eye

2

August 16 @ 12 pm

Those Kids and Their Cars!

2

July 11 @ 1 pm

Top 5 Life Insurance Uses

2

July 7 @ 3 pm August 8 @ 11 am

What you Need to Know about Employment Law & Coverage

2

August 22 @ 1 pm

Workers Compensation Beyond the Basics

3

New Hire eLearning Training Available! Visit iiak.org/education for more information

www.iiak.org | May/June 2017 | 7


You’re an independent agent.

Do you trust your pit crew?

The Big “I” Professional Liability Program Protect. Prosper. Prevent. Our risk management resources keep your agency from making common preventable mistakes.

Our superior coverage and expert claims teams are in your corner in the event of a claim.

When you know you have the best E&O protection, you can focus on growing your most important asset–your business.

The Big “I” and Swiss Re are jointly committed to providing IIABA members with leading edge agency E&O products and services. The IIABA and its federation of 51 state associations endorse Swiss Re’s comprehensive professional liability program.

www.independentagent.com/EO

Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas. Westport is a member of the Swiss Re group of companies and is licensed in all 50 states and the District of Columbia. ©2008 Swiss Re

8 | www.iiak.org | May/June 2017


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Agency E&O Considerations When Using Social Media By: Sabrena Sally, CPCU

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A lot has been written about how agencies can use social networking tools to enhance their online marketing and marketing reach. This article explores how the use of social media can impact the E&O risk agencies face and recommends specific steps agencies can take to mitigate those risks, so that the agency can get the full benefit out of these new tools.

Not a day goes by without my email containing an invitation to join a social networking site. Whether used for business contacts, maintaining contact with friends and family, or to reconnect with acquaintances from years past, the use of social networking sites is rapidly increasing. According to one internet research firm, 2008 saw the use of social networking sites overtake email by Internet users across the world. Much discussion has taken place on how to best harness the power of social networking for the benefit of your insurance agency. ACT and other organizations have written extensively on the power of social media to enhance agency online marketing and to generate “virtual” referrals. The focus of this article, however, is to examine the risks that agencies need to take into account when they take advantage of these opportunities to broaden their reach. I will examine the more common errors and omissions risks that can be associated with the use of social networking, along with steps you can take to mitigate those risks. If you are not familiar with social networking sites, here is a brief discussion of the most common functionalities. This is by no means all-inclusive, as the technology changes daily. Most sites offer the ability to create a homepage following a template provided by the site. Depending on the site being accessed, the profile template may be limited to key information you wish to be known about your agency along with an uploaded photo, or it can be as robust as a site containing multiple photos, videos, and links to other sections of the site (as well as to other sites) containing additional content you have created and posted. Users of the site typically invite other users to join their community, and the invitee is free to accept or decline. Most sites also offer blogs, chat rooms, forums, and search capabilities to help locate other users based on your chosen search filters.

RULES OF THE SITE

Posted privacy statements and user agreements are standard on social networking sites, and most also include a list of “do’s and don’ts” to follow when using the site. Although containing lengthy legal terminology,

it is in your best interest to fully read a site’s user agreements and privacy statements before agreeing to the terms of usage. User agreements tend to be very broad in favor of the site owner, commonly giving the rights to the site to use all content posted by users, and retaining the right to remove, discard or withhold user posted information at any time. User agreements usually state that the site assumes no responsibility to monitor disputes between users, and contain hold harmless/indemnification agreements in favor of the site for damages suffered by the site as a result of content posted by a user or as a result of any actions of the user while using or misusing the site. Now, let’s assume you have read the user agreements, privacy statements, and “do’s and don’ts” of a site you have chosen to use. You are ready to sign up. But wait! Don’t hit that submit button too quickly. Instead, take some time to consider what type of errors and omissions exposures your agency may face by using the site.

OVERVIEW OF E&O EXPOSURES

The exposures can range from advertising, contractual liability, defamation, offering erroneous recommendations, and may even extend to antitrust issues. These are not new exposures to your agency, but the nature of social networking sites does impact errors and omissions exposures in several ways. Information entered on social networking sites is able to achieve instantaneous worldwide distribution in a matter of seconds. An electronic record is also created which can survive indefinitely. In addition, discussions taking place on these sites tend to be more casual and take place more quickly then even email communication, making it easier for a statement to be taken out of context. Let’s drill down to the most common errors and omissions exposures faced by agencies using social media.

CONTRACTUAL LIABILITY

The user agreement on the site most likely contains a requirement that you hold harmless and indemnify the site. The agreement at one popular site is quite broad, stating: “....you shall indemnify and hold us harmless from any damages, losses and costs related to third party claims, charges or investigations, caused by your failure to comply with this agreement, including without limitation your submission of content that violates third party rights or applicable laws, caused by any content you submit to us, www.iiak.org | May/June 2017 | 11


or caused by any activity in which you engage through the site.” That provision in itself is amazingly broad, but it becomes even more so when you look at the definition of the site agreement. The site agreement in this particular case states that you must comply with all applicable laws, the “Do’s and Don’ts” posted on the site, the notice and takedown procedures of the site, the site privacy policy, and any other notices of the site.

Loss Control Tip:

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

ADVERTISING LIABILITY

You most likely will create some type of agency home page, so let’s look next at advertising exposures. The insurance regulations in several states specifically mention Internet advertising. For example, this excerpt from NY L Circular Letter No. 5 (2001) is both specific to Internet advertising and broad in scope: “Advertisements that appear on the Internet are subject to all applicable existing statutory and regulatory guidelines and restrictions applicable to advertisements in any other medium.” It is clear that the same level of care should be given to agency advertising on social networking sites as is given to the agency’s traditional advertising. Where the line can easily be blurred, however, is when an individual agency owner or employee uses the agency name, logo, or other advertising identifier as part of their personal social networking site. Does that then constitute advertising for which the agency can be held liable? That question has yet to be settled. The agency’s exposures from advertising on these sites can be mitigated by following the same legal vetting process as is used for traditional advertising. An agency procedure should also be established that addresses to what extent employees have permission to link to the agency’s sites, or use the agency name, logo, or other advertising material on their personal sites (more on this procedure later).

Loss Control Tips:

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

12 | www.iiak.org | May/June 2017

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

DEFAMATION

Most social networking sites feature blogs, chats or forum discussions. Participating in these discussions can present exposure to defamation, or in this case libel since the discussion is in written form. Your agency has always faced exposure to defamation from verbal discussions and written communications. On social networking sites, however, discussions taking place on blogs and in chat rooms or forums tend to be less formal, may include more opinion than fact, and tend to move quite rapidly between many parties. In fact, the popular site Twitter limits text comments to no more than 140 characters. The end result is that it is much easier to make a statement that is taken out of context. Unlike verbal discussions, comments made on the interactive features of social networking sites or in blogs that accompany online articles are captured electronically and can be stored indefinitely, further exacerbating the issue of less formality. Keeping in mind that commercial speech – speech which proposes an economic transaction – is entitled only to limited First Amendment constitutional protection, there is a real question as to the level of First Amendment protection business representatives will receive when they write or respond to a blog. The answer is not yet clear. As this area continues to develop, you would be well served to consult with legal counsel experienced in First Amendment law for guidance on creating the agency’s policy regarding the content you will permit on blogs on your agency’s behalf.

Loss Control Tip:

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

PRIVACY ISSUES

Closely tied to defamation is public disclosure of private facts, which occurs when someone reveals information that is not of public concern, and the disclosure of the information would be offensive to a reasonable person. The interactive spaces on social networking sites are not secure spaces for discussing personally identifiable information.


AGENCY PROCEDURES FOR SOCIAL WEB USE

documentation also apply to all content and discussions on social networking sites. As mentioned above, the interactive features of social networks do provide unique challenges. The written procedures your agency establishes to address social networking will not only guide agency staff behavior while using these sites, but will also help protect your agency against allegations of errors and omissions.

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

Loss Control Tips:

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

Loss Control Tip:

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

INCORRECT ADVICE

Agencies face exposure every day when rendering or failing to render professional services. Operating in the virtual world of the social web is no exception. Whether it is the advertising of agency services provided as part of the agency home page or comments made in a chat area discussion, the standard of care in providing professional services is no less than what exists in more traditional venues. The standard disclaimers used on your agency’s voice mail, email, and website also should be used on social networking sites. The same agency procedures your staff follows regarding risk analysis, recommendations, and

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

Armed with an awareness of the main errors and omissions exposures that can arise from use of social networking sites, you are almost ready to take advantage of the opportunities presented while still protecting your agency against unexpected exposures. But before getting started, give careful thought to what your goals are in using these tools. Do you plan to use sites such as Facebook or LinkedIn more as another venue in which to advertise your agency? Or, are you considering jumping in with both feet and actively participating in or running an interactive discussion to generate new “fans” who can become prospects? Once you have decided on your goals, consult with qualified legal counsel. By following the advice of qualified counsel that is specific to your planned use of these sites, and applying the loss control tips I just discussed, you will be ready to enjoy all the benefits of social networking with the peace of mind of knowing you have taken steps to mitigate the risks. This article is intended only for educational or illustrative purposes and should not be construed to communicate legal or professional advice. You should consult legal or other professionals with respect to any specific questions you may have. Further, the statements and/or opinions contained are those only of the author and do not constitute and should not be construed to constitute any statement, opinion or position of Swiss Re. Sabrena Sally, CPCU is Senior Vice President of Westport Insurance Corporation, a Swiss Re company, who manages the Big “I” Agency Professional Liability Program. Sabrena can be reached at sabrena_ sally@swissre.com. Sabrena produced this article for the Agents Council for Technology (ACT), a part of the Independent Insurance Agents & Brokers of America. This article reflects the views of the author and should not be construed as an official statement by ACT.

www.iiak.org | May/June 2017 | 13


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How Do You Sell an Intangible Product on Social Media? By: Sydney Roe

People freaking love lists. • The 5 Things That’ll Win You Attention On Social Media • The 7 Reasons You’re Failing On Facebook • 10 Quick Tips To Sell Your Brand on Instagram People love lists because they don’t have to think; they just have to act, they just have to follow directions. Someone else has already done the thinking, the hard part. It reminds me of Blue Apron meals by mail – all of the painful meal planning and grocery shopping is done? And all I have to do is read a 3-step recipe, cut some broccoli and put it in the oven? Sold. Well, unfortunately, this article isn’t a simple, neat list of Things You Should/Shouldn’t Do On Social Media. It’s not a quick fix. But it is a way of thinking about social media that will hopefully lead you to create your own awesome lists.

A Stab at the Super Secret Social Media Formula

A lot of businesses lucked out on social media. Not because they’re particularly good at it, but because they have visual, tangible products. For example: restaurants can showcase mouth-watering culinary masterpieces. Airlines can strap six cameras onto a checked bag or stuff their CEOs into overhead bins. Ikea pictures make you realize that you didn’t know you needed to re-model everything. Coffee shops show you how to make $5 lattes for like….50 cents.

But how the heck do you market insurance on social media? How do you market an intangible service? On top of being intangible, it’s also something that makes people cringe a bit. Nobody likes to just casually chat about insurance (agents don’t count). I’ve never walked into a happy hour setting and nonchalantly said to someone: “So….auto insurance, am I right??” (Now, I have talked about food I’ve tried at restaurants, bags I’ve lost on airlines, 3-hour Ikea trips and my current coffee addiction.) So, how do you market the intangible that no one even wants to talk about?

Here’s the problem: you’re marketing the wrong product.

I remember somewhere between shredding stacks of paper and stamping envelopes, my insurance-agent dad telling my 13-year-old self that insurance is a relationshipdriven industry. My dad never sold insurance. He built friendships, he gained trust and he sold himself. When you shake someone’s hand and close a big account, what are they really buying? They’re not doing business with an insurance agent; they’re doing business with you. So, you want to know what the super secret social media formula is? Sell yourself. That’s it. Sell yourself. Who are you? What makes you tick? What are your quirks? What are your interests? www.iiak.org | May/June 2017 | 15


Share that on social media. No, it’s not as easy as snapping a photo of beef bourguignon, slapping a gorgeous filter on it and posting it to Instagram. Yes, it takes work and consistency and practice and even some vulnerability. But I guarantee that your personality will make more of an impact than a foodie picture any day. Think about how you get referrals. Do clients tell their friends, “Oh yeah, I love the business insurance policy Joe set me up with! It’s the perfect policy for me.” Or do they say, “Joe is awesome. He knows everything about business insurance for restaurants and walked me through exactly what I needed. I can give you his number if you want.” See the difference? Even though people might not talk about insurance, people talk about people. Especially people who do an amazing job helping them in a time of need, people they trust. This is why you hear us (at both Agency Nation and TrustedChoice.com) talk about personal branding so often. Because at the end of the day – you are your product. So, get out there and show the world who you are.

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Sydney Roe is the Digital Content Manager for TrustedChoice.com, a licensed insurance agent, and a millennial. She started working for her father’s insurance agency as a producer who championed social media marketing. She now helps create and implement innovative content marketing strategies responsible for driving millions of consumers through TrustedChoice.com. Sydney has continued to evolve the digital marketing conversation and engage insurance agents through multiple presentations at state associations.


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Agency Risk Management Essentials: Is your website doing more harm than good? Your agency’s website is your “business card” to the world. Well managed, it can be the cornerstone of your operational and marketing strategy. If not, it can and will be used to strengthen a claimant’s E&O case against you. The Swiss Re Corporate Solutions claims team has seen an increasingly emerging issue stemming from this evolving part of your business. Seemingly harmless content on your website, emphasizing competitive advantages or certain expertise, can very quickly and unintentionally increase the agency’s standard of care resulting in a higher duty than normally required. That can be detrimental to your defense in a claim situation. To help mitigate the risk of an increased standard of care, we consulted risk management professionals with expertise in this area. Their suggestions are shown below. We hope you find these useful in creating and reviewing your agency website’s content.

a a

Do clearly specify in which states the agency is licensed.

X

Don’t say the agency does things or provides services it does not do or provide.

Clearly state the lines of coverage the agency writes (or does not write). For example: not all P&C agencies handle benefits lines.

X

Don’t say that you can ensure that any claim will be fully covered.

a

Do clearly state that misstatements or omissions of relevant information by the client can lead to price variation or even declination or rescission of coverage.

X

Don’t use terms such as “expert”, “specialists”, “best price”, “most comprehensive”, “fully covered”, or “partner”.

a

Do clearly state that information requested to provide a quote or work on coverage will not be shared with carriers or with any other entity without the applicant’s permission.

X

Avoid terms promising absolutes such as “immediate response time”, “ALL lines of insurance”, “all risk”, “24/7”, “all carriers”, “addressing ALL of your coverage needs”, “constantly reviewing”.

a

Be clear: requesting coverage does not guarantee coverage can be provided. Coverage can begin only with specific statement by a licensed member of the agency staff.

X

Don’t include client testimonials that show the clients’ names and identifying information without being sure the testimonial is specific to their experience thus avoiding an increase in your standard of care. Be sure to have their express written permission, along with a procedure to remove their testimonial if they are no longer a customer.

a

Do clearly state by including a disclaimer that none of the information provided in the website is a guarantee that insurance will be provided or that the agency is obligated to procure insurance for the website visitor.

X

Don’t launch a website without carefully reviewing the language, with an E&O risk management eye. Template agency websites or advertising firms simply may not have E&O on their radar. Involve your legal counsel in reviewing the language.

a

Do obtain express written consent from your carrier(s) or any other entity(s) if you use their name or logo on your website.

X

Don’t have a quote mechanism (form-fill or Rater) and then fail to respond in a timely manner.

a

Do use a Privacy Statement on your website and be sure to encrypt any pages that collect Personal Identifying Information, such as an online quote form.

X

Don’t use open text boxes for customers to type messages to you unless adequately encrypted. You have no control over the information entered in the text box. If a breach occurs during transmission of that message, your agency may be held liable for the release of Personal Identifying Information.

REMEMBER: Risk Management starts before the sale


When choosing an insurance carrier, make it simple. Go with an established company that is financially solid and trustworthy. United Fire Group (UFG) was named to Forbes’ “America’s 50 Most Trustworthy Financial Companies” list for the third year in a row. The honor is straightforward and simple: trust matters.

Visit ufgSolutions.com or call 800-877-5002. www.iiak.org | May/June 2017 | 19


Top Three Reasons a Trusted Choice Profile is Better Than an Agency Website By: Marty Agather

Thankfully, today most of our members have a website. However, many websites deliver less value than agencies expect. While there are a number of reasons why, there is an easy and inexpensive way to address these issues. If your website isn’t great, the easiest and least expensive way to improve your agency’s presence on the web is to purchase an Advantage Profile on TrustedChoice.com.

Mobile First

Too many agency websites are not mobile enabled. As anyone with a smart phone knows, more and more searches are done on mobile devices. If the search is using a mobile device, Google penalizes websites that aren’t mobile friendly. Why? Have you ever spent too long trying to scroll around a website that has been miniaturized to fit on your phone? How about hitting the wrong hot link a few times because the links are too small and close together to allow your fingers to hit the right one? Advantage profiles are optimized, allowing searchers to interact with your agency in a much more intuitive and attractive manner.

Profile Rank

Most agency websites don’t rank (show up on page one) for any search terms other than the name of the agency. Many times, they don’t even rank for that. TrustedChoice.com is considered to be a very reputable site by Google. That means that Advantage agency profiles rank very well, in some instances more highly than the agency’s own website!

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Power of Content

Agencies inability to rank for insurance search terms is problematic. The number of agencies with unaided recall (the ability to remember that Smith Insurance is an agency in Lakeville, MN without a reminder) is very small. Thus, anyone who is Googling the agency name already is very familiar with the agency, but a minute percentage of searchers. Real world search is more likely to involve keywords related to insurance. And when the consumer searches for volunteer board insurance, the majority of agencies have ZERO chance of being shown in the top 20 pages of the results. That is where TrustedChoice.com’s value proposition comes into it’s own. Today, TrustedChoice.com is one of the top five results on page ONE (one of the five best pages in the internet) for over 11,000 insurance search terms. This is due to the breadth and quality of the content (web pages) that TrustedChoice.com publishes every week. When that consumer educates themselves on their insurance issues and then looks to find a local agency with whom they can work, Advantage agencies are shown at the top of the list.

Call Today!

These three reasons create significant benefit and are a very cost-effective way to leverage an agency’s web presence. For more information, call TrustedChoice.com at 855-372-8755. Marty Agather is the Vice President of Client Experience for TrustedChoice.com. Marty’s position as an insurance technology thought leader has been developed through a career of leading change in industry organizations and processes.


.

There can be no doubt that all our knowledge begins with experience. – Immanuel Kant

www.summitholdings.com

Policies are underwritten by Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, authorized insurers in AL, AR, FL, GA, IN, KY, LA, MS, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. ©2016 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801

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Technology - an investment, not an expense 6 Habits of Tech-Savvy Agencies By: Peter Van Aartrijk How can you distinguish innovative, dynamic independent insurance agencies from those that are stuck in status-quo thinking? There are several indicators, and one is how they approach technology. Namely, it’s an attitude that begins with funding for technology. Innovative firms approach tech spend in a strategic way. They view it as an investment, not an expense. What’s the difference? Vast. Agency principals grumble about the complexity and cost of the necessary, albeit aged, management system to organize client information and handle carrier real-time communications. We’re not talking about a few bucks here. For most firms, the technology budget line is second only to that of compensating employees. Most of the money goes toward the management system. I’ve observed that innovator agency brands have a strategy in these areas:

Proactive:

They maximize their investments in the agency management system—using more features than other firms; calling the help desks instead of flailing about; actively interacting with their technology user groups; challenging their vendors to improve; talking with their carrier partners about business processing improvements; and encouraging employees to come up with easier ways to utilize technology to reduce keystrokes and time.

Recruit:

They proudly feature their technology in conversations with prospective hires. Young people want to work at firms with modern hardware and software. 22 | www.iiak.org | May/June 2017

Promote:

They promote their ease of doing business (such as realtime rating and processing capabilities) with customers and prospects. People want to buy from tech-savvy firms.

Pioneer:

They’re willing to try new things. They experiment with solutions that could be appealing alternatives or addons to their current software. They even experiment with technology from outside the insurance industry that could be applied to their teams.

Perspective:

They make their websites and social media platforms— their most important “offices”—a priority from the perspective of the customer. When you see those sites and outposts, you just know they are innovative firms.

@Agency.com:

Back in 1998, they gave up their @aol or @juno or even @compuserve e-addresses as their official agency e-mail accounts. (OK, sorry, that’s a cheap shot, but I still see them.) Are you differentiating your agency? What is your strategy? Is it time to hit the reboot key on your attitude about technology? Peter van Aartrijk (peter@Aartrijk.com) is CEO of Aartrijk, a specialist in insurance industry brand strategy and content marketing. He provided this article on behalf of the Agents Technology Council for Technology (ACT). This article reflects the views of the author and should not be constructed as an official statement of ACT.


Relax...

You’ve offered each of your clients a personal umbrella policy.

Right? It might not be quite as relaxing as a day at the beach, but knowing you’ve done everything in your power to protect the customers who trust you to help them will go a long way towards easing your mind. Offering each and every client an umbrella not only protects those who choose to purchase the coverage. It protects your agency from liability. And it protects your book of business, since studies show that customers who have multiple policies are less likely to move their business elsewhere. As a Big “I” member, you have access to a stand alone personal umbrella program from A+ rated carrier RLI, featuring: Limits up to $5 million available Excess UM/UIM available in all states You can keep your current homeowner/auto insurer New drivers accepted - no age limit on drivers Up to one DWI/DUI per household allowed Auto limits as low as 100/300/50 in certain cases

Competitive, low premiums for increased limits of liability Simple, self-underwriting application that lets you know immediately if the insured is accepted E-signature and credit card payment options Immediate coverage available in all 50 states plus D.C.

So cover your clients... protect your agency... and profit from umbrella sales!

Contact Jennifer Hopper, your RLI Administrator at: Email: jhopper@arlingtonroe.com Tollf Free: (800) 878-9891, ext. 8639 Local Fax: (317) 554-8551 Toll Free Fax: (888) 552-9891


Time for a New AMS?

Here are 11 Reasons to get started An Agency Management System (AMS) is the largest technology expense for an insurance agency, regardless of the particular vendor or platform. When managed well, these systems help an agency maximize staff productivity, provide a better customer experience, and increase agency profitability. Selecting and implementing a new system is a massive undertaking. However, there does come a time when moving to a new AMS is worth the effort. What are the signs that the agency should start looking at options? The following is a list of some indicators.

You’ve been using your existing system for more than 10 years.

What was state of the art 10 years ago is likely old today. Your existing system may work just fine for your agency, but what opportunities might you be missing? Newer web-architected systems are easier to navigate. Training new—or younger employees—is easier when the system uses standard website navigation features.

You have an in-house system.

Cloud-based systems have improved significantly over the last few years. A cloud-based agency management system is inherently more secure than a system maintained by your agency. Keeping client information secure should be a top agency priority. From a disaster recovery standpoint, it also makes sense to be able to access client information from any location where you can find an Internet connection.

Existing servers need to be replaced.

Needing to replace agency hardware is a great time to evaluate other options. If the agency needs to spend thousands of dollars to upgrade equipment, it’s a good time to evaluate cloudcomputing options.

Desktop computers are three years old.

The type of hardware you need at each desk will be different based on whether your existing system is in-house or cloud-based. The in-house system typically requires more powerful computers. 24 | www.iiak.org | May/June 2017

By: Steve Anderson, CIC The agency doesn’t use or can’t use all industry carrier communication options.

How well does your existing AMS system support industry carrier communication standards and processes? Large productivity gains are available to those organizations that maximize their use of download and real-time communication options. The easier it is for staff to use these, the more likely the agency will see productivity gains.

Paper is everywhere.

The move from paper to electronic document management can help an agency be more efficient. Those agencies that continue to rely on paper copies of policies and other documents may have a people problem (staff likes the paper), or they may have a system problem. How easy is it to capture electronic records into your system? How many steps does it take to “attach” a document to the policy file? Hundreds of electronic documents are attached every day. If the process is not easy and smooth, staff will rely more on paper to get work done.

Agency staff complains about a backlog.

Again, the reason for the backlog may be a platform issue. There are a limited number of processes that agency staff complete. New business, renewals, policy changes, certificate processing, audit processing, and claims reporting and tracking are a few. If your current agency management system requires extra and unnecessary keystrokes to complete each task, backlog will inevitably build. This frustrates staff and lowers morale. One way to measure how well your existing system helps staff complete these transactions is to measure how many steps it takes, thus how much time.

Training takes too long for new staff.

Older, menu-driven systems take longer to learn. Each person has to learn how to navigate the system and learn where functions are located. It takes time—a lot of time. Newer, web-architected systems rely on simple website navigation and user interface techniques. They make extensive use of hyperlinks to access specific information.


Due to their use of sites, newer staff may be much more comfortable with this type of navigation and user interface. Vendors for these systems often have a design philosophy of accessing any piece of information in as few clicks as possible.

You use a third-party system for accounting.

This is a bit of a technical subject, but accounting should be built into the agency management system. Thirdparty, general-ledger-based accounting systems have a difficult time helping an agency keep track of insurance premium trust accounting. At a minimum, your agency management system should allow you to invoice, track receivables, track company payables and maintain a separate premium trust account. The agency general ledger can then be handled by a third-party application.

about 35 different agency management system platforms available. As I wrote in the beginning of this column, selecting and then implementing a new agency management system is a massive undertaking. It should not be taken lightly. At the same time delaying upgrading to a new system could cost the agency dearly. Reprinted with permission of Steve Anderson. For more information visit: www.SteveAnderson.com

You are not able to easily support remote staff and additional locations.

Cloud-based, web-architected platforms make it easier to support remote staff and locations. Because a cloud-based AMS platform is available wherever an Internet connection is available, staff can log in from anywhere. This is becoming an important consideration when recruiting new and retaining existing staff. The same principal applies to setting up additional locations. Either acquiring an existing agency or expanding to a new location becomes much easier when you only add more users to the current platform.

The AMS doesn’t support marketing and sales.

I am receiving more questions and hearing more comments from agency owners regarding this topic. Customer relationship management, sales pipeline management, marketing automation and campaign management are tools agencies need to connect and build relationships with prospects today. The agency of the future requires a platform with a disciplined process to build client and prospect relationships. This list is presented as a way to help you evaluate whether your agency is getting the most out of your existing system. The more items that apply to your organization the more likely you need to take a look at what other options you might have. There are

YOUR BUSINESS. OUR PROMISE. FCCI Insurance Group has been insuring businesses and doing what we say we’ll do for more than 58 years. We partner with our agents to provide expertise in underwriting, risk management and claims handling that help businesses thrive and face the future with confidence. Craig Evans Director, Underwriting Indianapolis, Indiana

General liability • Auto • Property • Crime Workers’ compensation • Umbrella Inland marine • Agribusiness • Surety Coverage available in 18 states and D.C. © 2017 FCCI

www.iiak.org | May/June 2017 | 25


26 | www.iiak.org | May/June 2017


By: Rick Pitts “WannaCry” is the ransomware that, according to a Reuters report on May 15, “locked up more than 200,000 computers in more than 150 countries. The Reuters report is titled, “More disruptions feared from cyber-attack; Microsoft slams government secrecy.” It calmly includes an estimate of the losses from the event: “The non-profit U.S. Cyber Consequences Unit research institute estimated that total losses would range in the hundreds of millions of dollars, but not exceed $1 billion.” Sobering notes abound throughout the news reporting of the “WannaCry” virus, but perhaps the most somber is a CNet report about its impact on small business: If you’re a small business, you’re stuck between a rock and a hard place once ransomware strikes. If you don’t pay, all your records and transactions are lost, giving up crucial information your business needs to function. If you do pay, you’re feeding a growing beast and encouraging more ransomware attacks in the future. That is, if you can even afford to pay. “WannaCry ransomware’s real victim: Your local corner store” CNet.com (May 20, 2017) This sounds like the typical introduction to yet another “scary article” on cyber and why all of our insureds need to buy cyber insurance right away. (It is and they do…) But this isn’t about that. Instead, the stuff about WannaCry is the backdrop to discuss what the insurance industry is contemplating in terms of regulating itself about cyber security.

The National Association of Insurance Commissioner’s Cybersecurity Task Force has developed a few drafts of an “Insurance Data Security Model Law.” The most recent version, a proposed version 4, bears an April 26, 2017 date. The NAIC model is not final. Even once it becomes final (and if it does at all), it still does not have binding effect. The model still must be introduced as a bill and adopted by various states. To date, industry groups such as RIMS, NAIFA, NAMIC, CIAB, PCIAA, RAA and ISO have voiced various concerns in connection with prior versions of the draft model. Joining in on that is our national association, the IIABA. IIABA has, with the leadership of Wes Bissett, assisted in making various observations about coordinating the principles of the draft with existing federal law; problems in connection with the breadth of some of the definitions; and commenting on the significant burdens the laws may place on licensees. To understand the NAIC model, a little bit of background is in order. As a multitude of privacy laws have developed in the past twenty-five years or so, some common themes or concepts have emerged in terms of what people in control of data are supposed to do to safeguard it. Many of these concepts were developed with the passage of HIPAA (on the health side) and Gramm-Leach-Bliley (on the financial side) in the 1990’s. HIPAA, for instance, put in place requirements that holders of protected health information had to (among other things): www.iiak.org | May/June 2017 | 27


• Develop and implement written privacy policies and procedures • Designate a privacy official • Train all workforce members on its privacy policies and procedures • Maintain reasonable and appropriate administrative, technical, and physical safeguards • Prevent intentional or unintentional use or disclosure of protected health information The NAIC Model uses and expands upon these same concepts and makes them applicable to “Licensees” in any given state. Who is a “Licensee,” you might ask? Section 2’s definitions tell us: “A ‘Licensee’ means any person or entity licensed, authorized to operate, or registered, or required to be licensed, authorized, or registered pursuant to the insurance laws of this state but shall not include a purchasing group or a risk retention group chartered and licensed in a state other than this state.”

This may well mean varying standards based upon the type of business and the volume of business conducted in the agency. It may also mean, if the NAIC model moves forward, difficulty in achieving compliance under a “variable” standard. The NAIC model also requires management and employee (or third party vendor) oversight of the program, risk assessment, risk testing, and annual adjustments to the program as need be. Of course, concerns remain about costs, particularly for smaller “licensees.” US News and World Report published an April article titled, “New York Regulator Wants Other States to Model Cyber Laws After Its Rules.” It captured the current status of the NAIC model movement: “The NAIC task force is about to develop its fourth draft of a proposed model cyber security law since forming in 2015. Insurance commissioners have been unable to reach a consensus on several points, including standards for circumstances in which insurers must notify customers of a breach.”

Under the NAIC model, producers are “licensees,” just as companies are “licensees.” But wait a minute, you think. Surely our five-person or ten-person agency can’t be held to the same standards as the big, multi-state (or international) companies, can we?

So, the NAIC model remains contested and a bit contentious, too. It has a long way to go to the finish line within the NAIC. Even once it crosses that line, the model then may face an uncertain future in state legislatures across the country.

One of the most fascinating things about the NAIC model is that the answer is a resounding “no” and “yes” at the same time. The answer is “yes,” that the concepts are the same; the answer is “no,” in that how the concepts are implemented may vary. Section 4(a) of the current Model Act version says that, “…each Licensee shall develop, implement, and maintain a comprehensive risk-focused written Information Security Program that contains administrative, technical, and physical safeguards for the protection of Nonpublic Information…” That’s the concept part we all have to comply with.

This brings us back around to “WannaCry.” If cyber extortion efforts are increasing (and they are) and are focusing more on smaller businesses and successfully extracting ransoms from smaller businesses, then it becomes less and less politically appealing for small businesses to claim “it’s too expensive” or “it’s too burdensome” to try to protect consumer data.

The rest of the section says that the Information Security Program has to be crafted and implemented in a way that is “Commensurate with • the size and complexity of the Licensee, • the nature and scope of the Licensee’s activities and • the sensitivity of the Nonpublic Information used by the Licensee or in the Licensee’s possession, custody or control…” 28 | www.iiak.org | May/June 2017

Richard S. Pitts, IIAK’s General Counsel is also part of our newest member benefit, First Call Free Legal. Members receive up to a 30- minute phone consultation on an insurance or agencyrelated matter once a year at no charge. Contact IIAK for more information.


Take advantage of this members-only resource for: • Best Practices • Live & on-demand webinars • Recommendations for improving: • Agency Workflow • Going Paperless • Internet Marketing • Implementation Strategies • Disaster Planning • Future Trends

FREE Webinar! The Top 10 Reasons Mobile is Vital to Your Agency’s Future: Is Your Agency Mobile Friendly? Tuesday, August 16, 2017 ​2:00 to 2:30 p.m. EST

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www.iiak.org | May/June 2017 | 29


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Cyber: Solved.

“Failure to offer” cyber coverage is an emerging threat in the area of insurance agency E&O claims. Are you offering cyber coverage to all of your small business clients? Big “I” Markets makes it easy. Our partner offers $100,000 cyber liability coverage with a $200 annual premium. Very few classes are excluded. Cyber, solved. Log into www.bigimarkets.com and click on “Cyber-Small Business Solution” to start quoting business today.

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Doing The Right Thing Since 1964

Janet Phillips, CIC

Executive Vice President

Where personal service is never a liability. When you broaden your insurance offerings with Arlington/Roe, you’ll never sacrifice the personal touch. For over 50 years, we’ve treated our customers the way that we’d like to be treated. It’s just the right thing to do. When you want to offer your clients more, count on our expertise, market access and diverse product lines. We’re always here to help.

Let us help you find the right solutions. ®

32 | www.iiak.org | May/June 2017

800.878.9891 ArlingtonRoe.com Aviation | Bonds | Brokerage | Commercial Lines | Farm | Medical Professional Personal Lines | Professional Liability | Transportation | Workers’ Compensation


Save These Dates Check out these great events near you! Make-A-Wish Gala

Thank You 2017 Industry Partners (as of 05/31/17) Diamond

August 4

Seelbach Hilton, Louisville

Joint IN/KY Young Agent Event September 28

Platinum

Louisville Mega Cavern & Evan Williams Distillery, Louisville

121st Annual Convention & Trade Show November 8-10

The Brown Hotel, Louisville

Gold

CRM: Financing of Risk February 20-23, 2018

Hilton Garden Inn Northeast, Louisville

Acuity KEMI Liberty Mutual Risk Placement Services, Inc. Safeco United Home Insurance Co. Silver

Want to be an Industry Partner? Contact Tara Purvis Marketing Director tpurvis@iiak.org

AFCO Amerisafe, Inc. Keystone Insurers Group KY Associated General Contractors Motorists Insurers Group Secura Insurance State Auto Insurance Company

Bronze Alexander J. Wayne & Associates Anthem Blue Cross & Blue Shield Auto-Owners Insurance Company BITCO Insurance Companies Burns & Wilcox LTD Columbia Insurance Group FCCI Insurance Group FFVA Mutual Insurance Company Frankenmuth Mutual Insurance

InsurBanc J.M. Wilson KESA Market Finders Insurance Corp Midwestern Insurance Alliance Prime Insurance Companies SwissRe Corporate Solutions Summit Westfield Insurance

www.iiak.org | May/June 2017 | 33


WE’RE SOCIAL Follow us on your favorite social media sites.

Facebook facebook.com/IIAKentucky facebook.com/YAofIIAK

Instagram instagram.com/iiakentucky

Classifieds Acquisitions

Looking for Producers

Established Louisville agency interested in acquiring insurance agencies in Jefferson and surrounding counties. If you are interested in selling, merging, or need assistance with perpetuation, we would like to talk with you in confidence.

Independent with top best markets looking to expand presence in Jefferson, Oldham or Shelby counties. Wanting Personal lines, Producer or book of business to move or purchase. All arrangements possible, in strict confidence.

Call R. Alex Rankin, CPCU or Philip Anderton, CIC, at Sterling G. Thompson, Co. at 502-5853277

Please send inquiries to Turner Insurance Agency, 2460 Shelbyville Road, Shelbyville, KY 40065 or call Kurt Turner, CPCU at 502-633-6060.

Advertisers We would like to thank our advertisers for their support. This publication would not be possible without you!

LinkedIn linkedin.com/in/iiakentucky

Twitter twitter.com/iiakentucky

34 | www.iiak.org | May/June 2017

Acuity Amerisafe Arlington/Roe Big “I” Markets Bolton & Company EMC Insurance FCCI J.M. Wilson

IBC 16 32 31 OBC 9 25 29

KEMI 30 KESA IFC RLI Personal Umbrella 23 Secura 26 Summit Consulting 21 Swiss Re Professional Liability 18 United Fire Group 19 West Bend Mutual Insurance 14

For classified ads or to advertise in the Kentucky IA, contact: Nikki Robins, Communications Director at nrobins@iiak.org or call 502-245-5432.


www.iiak.org | May/June 2017 | 35


Our new vacant building program covers buildings up to $3.5 million. Vacant buildings pose a special risk. Vandalism, property damage, potential lawsuits, etc. Vacant buiding insurance can be hard to get. Not anymore! We now offer vacant building coverage for buildings valued up to $3.5 million. And at very competitive rates. • Coverage to $3,500,000 • Buildings undergoing improvements also eligible

Don’t put your clients at risk. Call us today and let your clients rest easy. Great products, great rates, great service. That’s our policy. It’s why we’ve been in business over 50 years.

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