wisconsin INDEPENDENT AGENT JULY 2022
EXPERIENCE THE DIFFERENCE OF AN IIAW MEMBERSHIP PAGES 6-15
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CONTENTS
wisconsin INDEPENDENT AGENT
COVER STORY: Experience the Difference
At the IIAW we believe that every agency deserves whiteglove service. Our dedicated team appreciates, understands and recognizes the hard work of our agents and company members and drives programs that support these efforts.
PAGES:
6-15
ERRORS & OMISSIONS................................................................16-17 To ERP or Not ERP, That is the Question
INDEPENDENT INSURANCE AGENTS OF WISCONSIN 725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 Fax: (608) 256-0170 www.iiaw.com
2021-2022 EXECUTIVE COMMITTEE President:
Marc Petersen | American Advantage - Petersen Group, New Berlin
President-Elect:
Nick Arnoldy | Marshfield Insurance Agency, Inc., Marshfield
Secretary-Treasurer:
Michael Ansay | Ansay & Associates, Port Washington
Chairman of the Board:
Darrel Zaleski | Spectrum Insurance Group, Eau Claire
State National Director:
Steve Leitch | Leitch Insurance, River Falls
PERSONAL LINES............................................................................20-21
2021-2022 BOARD OF DIRECTORS
Flood Risks are Rising - Are Your Clients Prepared?
Matt Frank | Robertson Ryan & Associates, Milwaukee
AGENCY OPERATIONS................................................................22 Want to Compete? Offer Remote Work
COMMERCIAL LINES....................................................................24 How the Insurance Industry Can Keep Up With the Energy Sector
MEMBERS IN THE NEWS..............................................................26-27 HUMAN RESOURCES...................................................................29-30 Overcoming Workplace Politics
AGENCY MANAGEMENT...........................................................32 Planning for the Unexpected
GOVERNMENT AFFAIRS..............................................................34-35 New Poll Highlights Tight Races for Governor and U.S. Senate
COMMENTARY FROM COUNSEL...........................................38
Wisconsin Supreme Court Rules No Coverage for Business Losses Due to COVID
FOOD FOR THOUGHT..................................................................39
Mike Harrison | R&R Insurance Services, Inc., Waukesha Aaron Marsh | Marsh Insurance Services, Inc., Rice Lake Dan Lau | Robertson Ryan & Associates, Milwaukee Andrea Nelson | Unisource Insurance Associates, LLC, Wauwatosa Brad Reitzner | M3 Insurance Solutions, Madison Joanne Lukas Szymaszek | Johnson Insurance Services, LLC, Racine
IIAW Staff Matt Banaszynski | Chief Executive Officer 608.256.4429 • matt@iiaw.com Mallory Cornell | Vice President and Director of Risk Management 608.210.2975 • mallory@iiaw.com Kim Kramp | Accounting Supervisor 608.210.2976 • kim@iiaw.com Trisha Ours | Director of Insurance Services 608.210.2973 • trisha@iiaw.com Evan Leitch | Agency Solutions Advisor 608.210.2971 • evan@iiaw.com Kaylyn Staudt | Marketing and Communications Coordinator 608.210.2977 • kaylyn@iiaw.com
ADVERTISERS INDEX Acuity..................................................................23 Berkshire Hathaway GUARD...................19 IMT.......................................................................40 JM Wilson.........................................................39 Penn National..................................................31 Robertson Ryan & Associates.................21 SECURA.............................................................37 UFG......................................................................2 Vizance...............................................................28 West Bend.........................................................33 Western National...........................................25
Jeff Thiel | Director of Agency Success 608.256.4429 • jeff@iiaw.com Andrea Michelz | Education & Membership Engagement Coordinator 608.210.2972 • andrea@iiaw.com Diana Banaszynski | Events Coordinator and HR Advisor 608.256.4429 • diana@iiaw.com Tyler Wheeler | Agency Accounting Specialist 608.256.4429 • tyler@iiaw.com Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2022 For information on advertising, contact Kaylyn Staudt, 608.210.2977 or kaylyn@iiaw.com. wisconsin INDEPENDENT AGENT
| JULY 2022 | 3
4 | JULY 2022 |
wisconsin INDEPENDENT AGENT
You’ve made the choice to build your agency on independence, but that doesn’t mean you’re alone. Membership in the Independent Insurance Agents of Wisconsin and the Independent Insurance Agents & Brokers of America allows you access to an exclusive network of more than a quarter million independent insurance professionals nationwide that receives advocacy, business solutions and technical expertise from the industry’s thought leader. As your agency seeks solutions to challenges and opportunities, turn to the IIAW. Our experience combined with our vast network of insurance professionals seeks to provide you with the optimal solutions. We do the work so you don’t have to!
ADVOCATE The IIAW Government Affairs team is supported by Lee Government Relations; a Wisconsin-based, multi-client lobbying firm specializing in influencing public policy to directly meet the needs of independent insurance agents. We are the eyes, ears and voice for our members at the State Capitol. On the national level, the Big ‘I’ Government Affairs team helps the independent insurance industry with its political efforts at the capitol in Washington D.C.
BUILD Our Agency Solutions offers trusted consulting built for the independent agent. Because we know how important it is for you to succeed in business, the IIAW has created a portfolio of solutions built just for you, including free agency assessments that provide a customized action plan with resources.
TECHNOLOGY
STRATEGIC
OPERATIONAL
FINANCIAL
MARKETING
We help you navigate and choose the best solutions to fit your needs
Protect your investment by reviewing business goals and strategies
Update and improve agency workflows and operating procedures
Review financial processes for accuracy and efficiency
Review your agency marketing efforts and discover helpful tools and resources
INSPIRE The IIAW is inspiring new and existing insurance professionals to become the Agency of the Future. Our Professional Development Program, educational course offerings, and industryleading events are inspiring, educating and positioning our members to re-train their brains, re-tool their employees and re-shape their business to be responsive to today’s consumer. Harness your ability, unleash your potential and deliver solutions.
TRANSFORM Traditional insurance agencies need to harness technology in order to compete and win in a bricks-and-clicks marketplace. The IIAW is assisting agents in their digital transformation by helping them rethink their business plan by connecting them with technology platforms and products that integrates with their agency and compliments their commitment to customer service.
MEMBERSHIP BENEFITS Are you a member of one of the most comprehensive associations in the state? Get access to all of the member benefits the IIAW has to offer by joining the IIAW or by renewing your membership today at iiaw.com.
IIAW RESOURCES Agency Solutions - Free Evaluations Operational Reviews Workflow Mapping Technology Evaluation Financial Evaluation Strategic Evaluation
Education
Prelicensing Online & Classroom CE Employee Training with MyAgencyCampus
Emerging Leaders
Professional Development (Sales & Leadership Summit) WI Independent Agent Magazine Networking Events (Monthly Publication) Big I Buzz (Weekly E-Newsletter) Events Interest Area Newsletters (Monthly) Annual Convention (InsurCon) - Personal Lines, Commercial Networking Events Lines, Employee Benefits and Industry Relations & Government Affairs Operations Political Advocacy at the State IIAW Publications (Industry & National Level Research, Marketing Guides, News & Updates quarterly & annual Marketshare Reports, Etc.)
Communications
Legal Briefs and Guidance
Free Quarterly Consultation
Services
Agency Accounting Services Agency Operational Consulting Agency Technology Consulting HR Consulting Risk Management Consulting Virtual Operational Improvement Reviews
Task Forces & Councils
3 Virtual Meetings Per Year Free CE Credits Networking Opportunities
Technology
Cybersecurity Compliance Bundle Catalyit (Free Basic Subscription) WAHVE - Talent Solution
IIABA RESOURCES ACORD Forms Agency Universe Study ACT - Agents Council for Technology Ask an Expert Best Practices Study Big “I” Business Resources Big “I” Hires Big “I” Markets (Market Access)
Diversity Task Force E&O Risk Management Website Government Affairs Guaranteed Income Program Independent Agent Magazine IndependentAgent.com InsurPac Large Agents & Brokers Council Legal Advocacy & Services
Marketing & Branding Media Relations Trusted Choice Disaster Relief Fund Trusted Choice® Virtual University Young Agents
Employee Benefits Insurance ePayPolicy Flood Insurance Program Guide to Agency Perpetuation Home Business Insurance Independent Market Solutions (IMS) InsurBanc
InVEST Retirement Plans Rough Notes Advantage Plus (VRC) TrustedChoice.com Umbrella Insurance
PRODUCTS Agents E&O Insurance Association Health Plan Carrier Contact Reviews DAIS - Internet of Insurance Data Breach Insurance Eagle Agency Employment Practices Liability Insurance
Join the IIAW or Renew Your IIAW Membership Today! www.iiaw.com wisconsin INDEPENDENT AGENT
| JULY 2022 | 7
The IIAW team was built with your agency in mind. Membership in the IIAW gives you access to our team and our professional expertise, ready to assist where you need it most.
8 | JULY 2022 |
wisconsin INDEPENDENT AGENT
Join the IIAW or Renew Your IIAW Membership Today! www.iiaw.com
wisconsin INDEPENDENT AGENT
| JULY 2022 | 9
MAPPING OUT YOUR AGENCY SUCCESS
Agency Operational Evaluation Our evaluation leads you to the exact resources you’ll need to achieve your business goals. Scan the QR code in the bottom corner of this page to take the evaluation.
Insurance for Your Agency An IIAW membership entitles you to exclusive products and consultative services. We offer E&O, Data breach, EPLI and Association Health Plan for Wisconsin independent insurance agents.
A Voice in the Capitol
Agency Consulting
The IIAW and InsurPac, our state and national Political Action Committees, ensure our industry is present and heard in Wisconsin and Washington D.C.
We offer technology and operational consulting that meets the needs of your agency.
Education & Events
That’s Not All!
The IIAW is your leader in insurance CE, prelicensing and employee training. Join us and other agents at our annual convention and other events throughout the year.
An IIAW membership maps out benefits to navigate your agency toward success. Members receive access to Trusted Choice for a full suite of tools and resources for your agency to use in its own marketing. Plus, members receive our publications and marketing guides through our knowledge center. iiaw.com/memberbenefits
SIGN UP TODAY AT IMSACCESS.COM/STATES/WISCONSIN
IIAW Members Get Exclusive Access The IIAW is a proud co-founder and investor of Catalyit.
All the agency tech guidance you need...in one place. The number of ways you can leverage tech to increase profits and serve customers is nearly unlimited. But time, know-how, and fear of risk are getting in the way.
Catalyit solves it for you.
IIAW members receive a FREE Basic Subscription to
Catalyit.com A free Basic Subscription gives you access to the solution provider index, weekly TechTips email, a tech assessment, the demo lounge and partial previews of site content & product guides. 12 | JULY 2022 |
wisconsin INDEPENDENT AGENT
IIAW CONTINUING EDUCATION
2022 ONLINE EDUCATION & CE CLASSES
J U LY & AUGUST SCH EDULE DATE
JULY
TIME
COURSE
7/11
12PM-1PM
Claims-Made Policies - The Most Dangerous Insurance Policies
7/12
12PM-3PM
Understanding the Largest Government Benefits: Social Security
7/13
12PM-2PM
Business Auto Claims That Cause Problems
7/15
9AM-12PM
E&O - Commercial Property Coverage Gaps & How to Fill Them
7/18
9AM-12PM
E&O - Roadmap to Homeowners Insurance
7/19
8AM-10AM
Builders Risk and Contractors Equipment
7/19
12PM-3PM
Agency Management Based E&O and Ethics
7/20
8AM-10AM
Personal Lines Issues That Keep You Up at Night
7/21
8AM-10AM
Insight on Modern Day Cyber Exposures & Risk Mitigation
7/22
8AM-10AM
Contracts Agents Should Read
7/28
8AM-9AM
Claims-Made Policies - The Most Dangerous Insurance Policies
7/28
12PM-3PM
Ethics in the Insurance Industry
7/29
10AM-11AM
7/29
12PM-2PM
Setting Business Income Limits: It’s Easier Than You Think! Those Kids and Their Cars
AUGUST 8/2
8AM-11AM
Commercial Lines Claims That Cause Problems
8/2
12PM-2PM
Contracts Agents Should Read
8/4
9AM-12PM
E&O - Commercial Property Coverage Gaps & How to Fill Them
8/4
12PM-2PM
The Guy in the Bar Returns
8/5
12PM-1PM
Setting Business Income Limits: It’s Easier Than You Think!
SEE OUR FULL COURSE SCHEDULE AND REGISTER FOR THESE CLASSES AT IIAW.COM/EDUCATION wisconsin INDEPENDENT AGENT
| JULY 2022 | 13
HOORAY FOR HOORAY FOR HABITATIONAL HABITATIONAL MARKETS! MARKETS!
“I” Markets partnered withMiddleOak MiddleOak to members secure coverage for for Big “I”Big Markets hashas partnered with tohelp helpBig Big“I”“I” members secure coverage habitational risks. MiddleOak offers two programs: habitational risks. MiddleOak offers two programs:
Worlds Apart® is a property and liability program for apartment classes where the insured ® Worlds is aa property and program for apartment where the insured ownsApart and insures minimum of 11liability rental units on the policy. Occupancy classes types include: ownsapartments, and insuresstudent, a minimum of and 11 rental unitshousing, on the policy. Occupancy types include: senior affordable well-maintained dwelling schedules, and high-value buildings. apartments, student, senior and affordable housing, well-maintained dwelling schedules, This program is currently available to Big “I” member agents in CT, GA, IA, ID, IN, KY, MA, MD, ME, MI, MO, NH, NJ, NY, NV, OH, OR, PA, SC, TN, UT, VA, and high-value buildings. VT, WA, and WI.
This program is currently available to Big “I” member agents in CT, GA, IA, ID, IN, KY, MA, MD, ME, MI, MO, NH, NJ, NY, NV, OH, OR, PA, SC, TN, UT, VA, VT, WA, and WI. ®
Capsure is a property and liability program for condominium and homeowner associations with a minimum of 11 units. Occupancies include primary, secondary and ® Capsure is a property non-owner occupied. and liability program for condominium and homeowner
associations with a minimum of 11 units. Occupancies include primary, secondary and This program is currently available to Big “I” member agents in AR, AZ, CT, IA, ID, IN, KY, MA, MD, ME, MI, MO, NH, NJ, NY, NV, OH, OR, PA, SC, TN, UT, non-owner VT, WA, andoccupied. WI.
This program is currently available to Big “I” member agents in AR, AZ, CT, IA, ID, IN, KY, MA, MD, ME, MI, MO, NH, NJ, NY, NV, OH, OR, PA, SC, TN, UT, With Big “I” Markets, there are no fees, no minimums and you own your expirations. VT, WA, and WI. Within each eligible state, these products are limited to
zipMarkets, codes. Pleasethere contact Claire McCormack at minimums and you own your expirations. With certain Big “I” are no fees, no Claire.mccormack@iiaba.net to see if the zip code for your risk is eligible.
Within each eligible state, these products are limited to certain zip codes. Please contact Claire McCormack at VISIT WWW.BIGIMARKETS.COM. Claire.mccormack@iiaba.net to see if the zip code for your risk is eligible. June 2020
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wisconsin INDEPENDENT AGENT
ultimate MEMBERSHIP THE
The IIAW excels beyond other insurance associations by providing one-on-one consultative services with our experienced team in these areas:
AGENCY TECHNOLOGY
LEGAL SERVICES
HUMAN RESOURCES
PROCEDURES & WORKFLOWS
PERPETUATION PLANNING
STRATEGIC INDUSTRY INSIGHTS
CALL US & SEE WHY AGENCIES CHOOSE THE IIAW: 608-256-4429 wisconsin INDEPENDENT AGENT
| JULY 2022 | 15
ERRORS & OMISSIONS
TO ERP OR NOT ERP, THAT IS THE QUESTION With yet more apologies to William Shakespeare. As time changes, you may find yourself in the position where either you decide it is time to sell your agency, or you are on the other side and considering the purchase of an agency. In either case, something that must be considered by both the seller and the buyer is whether an ERP (extended reporting period), sometimes called “tail coverage,” should be purchased. Regardless of what you call it, the purpose is to provide coverage for errors and omissions that happen before, but the claim is made during a specified period of time period after, the date of sale/ purchase. Most, if not all, insurance agents errors and omissions professional liability policies are either “claims made” or “claims made and reported,” meaning that the claim must be made and/or reported WHILE the policy is in place. This is different than most liability policies that you are probably more familiar with, where claims are covered on an “occurrence” basis, in which case the insurance policy in place on the date of the underlying occurrence provides coverage. The purpose of the ERP is to provide more time to report claims that could be made after the policy has expired, but still provide coverage for claims for wrongful acts that occurred during the original policy period. Let’s provide a few examples to illustrate different situations that could happen. 1. An insurance agent sells her agency effective on January 1. Their E&O policy expired on December 31 in the previous year. The agent purchased an ERP that will allow her to report claims for a three-year period after December 31. The agreement provides that all policies will transfer to the buyer on January 1. On January 20, the seller receives a demand letter (or a lawsuit) from a former customer’s attorney for alleged wrongful acts that occurred in November of the prior year. Because the seller had the three-year ERP, she can report the claim/demand/lawsuit to her E&O carrier, and it would be covered subject to the terms 16 | JULY 2022 |
wisconsin INDEPENDENT AGENT
of the policy. She would be able to report the claim and any other claim during the three-year ERP period, but only if the error or omission occurred during the policy period before the effective date of the ERP. 2. An insurance agent sells his agency effective on January 1. His E&O policy expired on December 31 in the previous year. The agency did not purchase an ERP on his E&O policy. On January 20, the seller receives a demand letter (or a lawsuit) from a former customer’s attorney for alleged wrongful acts that occurred in November of the prior year. Since their policy expired on December 31 and no ERP was purchased, there would be no coverage for the claim. Note: If the claim was actually made during the original policy period, e.g., on December 31, it typically can be reported during a brief period specified in the policy – typically two to three months. 3. An insurance agent sells her agency effective on January 1. Their E&O policy expired on December 31 in the previous year. The purchase agreement provides that the book of business will roll to the purchaser at renewal. There is the potential for the book to have policies that will roll over for 12 months after the purchase. During this period, the seller may still be servicing the policies that have not renewed. In this case, the selling agency needs to maintain their E&O policy until such time as all policies have rolled to the purchaser and no further servicing will be done by the seller. Once all business has moved and all of the seller’s servicing responsibilities have rolled to the buyer, the seller should purchase an ERP that becomes effective concurrent with termination of the policy. If any claims occur after the date of sale, but before all policies roll over and their E&O policy remains in place, the claims would be covered under the terms of the policy as usual. Subsequent claims for errors/omissions that occurred during the policy period would be covered pursuant to the terms of the ERP. 4. Here’s the tricky one. The facts are just as in No. 1 above, but for some unknown reason, the selling
agent is contacted by a former customer on February 20 (after the sale and transfer to the buyer) to take some action on behalf of the customer, which may be as simple as answering a question about coverages/ limits. The selling agent takes the action requested by the customer, e.g., answers the question, but commits an error. At some later date, the customer makes a claim against the seller for the error. Because the policy expired on December 31, there would be no coverage for the claim. Why? The E&O policy itself expired on December 31. But what about the ERP? Why won’t that cover the claim? Because the policy only provides coverage for claims for wrongful acts while the policy was in place and active, and the acts occurred after the policy expired, there is no coverage for activities after that time, even though an ERP has been purchased. The ERP only provides the ability to report claims for wrongful acts while the policy was in place and active, NOT for acts after the policy has expired. Every inquiry, no matter how small or seemingly innocuous, needs to be referred to the buying agency that is now responsible for servicing that account. Those are just a few of the potential ERP examples. Another frequent scenario is when the buyer and seller put their heads together and decide, “Hey, we can save a bunch of money if we skip the ERP and have [the buying agency] cover any claims!” Have you ever heard the phrase “penny wise and pound foolish”? That’s exactly what this is. Unless the buying agency’s E&O policy expressly accepts coverage for the selling agency’s errors and omissions, they probably will not be covered, regardless of any agreements made by them. E&O insurance carriers are not necessarily going to agree to accept those conditions. More importantly for both the seller and the buyer, that ERP cost represents the risk presented by years of possible errors & omissions that won’t come to light until after the sale. The selling agency doesn’t want to be “naked” with respect to coverage for E&O claims made after the sale, and the buying agency doesn’t want to bear the reputational and financial cost of its predecessor’s mistakes. The best bet for both parties is for the seller to purchase an ERP, the cost of which is considered in negotiations between buyer and seller.
policy in place. 2. When you are no longer actively in the insurance business, you should terminate your E&O policy and purchase an extended reporting period. 3. What time period should the ERP cover? Ask your attorney what the applicable statute of limitations is in the state(s) where you do business, and go with the longest applicable time period. 4. And after the effective date of the ERP, you should no longer provide any services to your former customers. Instead, refer them to the firm that purchased their business. That agency has E&O coverage in place for current errors and omissions. You do not. If you do these things, then you can take time to enjoy fond memories of your former profession. For more information about buying, selling and merging agencies, there is a great webinar on the E&O Happens website called ” Agency Risk Management Essentials: Navigating the Hazards of Buying, Selling and Merging an Agency” available to IIABA members who are also Swiss Re Corporate Solutions insureds. It provides a more in-depth discussion, more examples and additional information from industry professionals who have helped agency owners navigate these waters. This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/or management and/or shareholders. *Richard F. Lund, JD, is a Vice President and Senior Underwriter of Swiss Re Corporate Solutions, underwriting insurance agents errors and omissions coverage. He has also been an insurance agents E&O claims counsel and has written and presented numerous E&O risk management/ loss control seminars, mock trials and articles nationwide since 1992. This article was originally published on eoguardian.com.
So, back to the title: “To ERP or Not ERP, That is the Question”. The answer is: 1. As long as you are actively in the insurance business, even if it is only to provide servicing of a sold book of business, you need to keep your E&O
> Richard F. Lund, JD, Vice President & Senior Underwriter, Swiss Re Corporate Solutions wisconsin INDEPENDENT AGENT
| JULY 2022 | 17
2022
SALES & LEADERSHIP
SUMMIT
ABOUT MARSHBERRY
IIAW & MarshBerry Partnership
MarshBerry is a nationally recognized advisory firm and top growth consultant for insurance agents, brokers & carriers.
EVENING FUN 1.5-DAY SUMMIT Our 2022 Sales & Leadership Summit will be led by Don Folio, MarshBerry Sales Performance Consultant, and Eric Kuhen, MarshBerry Senior Strategy Consultant. A strong sales culture not only enables your firm to consistently win new business, but it also has the right people, processes, trainings and technology in place to sustain double-digit organic growth for multiple years. To know where your agency stands, you need to benchmark your sales culture in four key areas: Sales Leadership, Performance Management, People Development & Technology.
Summit Topics include: • State of the Insurance Industry • Foundational Selling Techniques • Effective Sales Huddles • Goal Setting & Accountability • Personality Types • Building Trust • Handling Conflict • Culture Creation
On Tuesday night, join the IIAW at the Timber Rattlers’ Home Run Porch. Tickets & food included in Summit registration.
LIMITED SPACE AVAILABLE Registration is $249 per person and registration includes your ticket & dinner for the Timber Rattlers game. We have limited space available for the event and encourage everyone to sign up early to secure your spot.
AUGUST 23-24 NEENAH, WI bit.ly/SalesLeadershipSummit
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APPLY TO BE AN AGENT: WWW.GUARD.COM/APPLY/ Our Workers’ Compensation policy is available nationwide except in monopolistic states: ND, OH, WA, and WY.
PERSONAL LINES
FLOOD RISKS ARE RISING ARE YOUR CLIENTS PREPARED? Are your clients, both commercial and personal, at a greater flood risk than they know? If your clients rely solely on the Federal Emergency Management Agency (FEMA) flood maps, your clients' property may be at much higher risk than predicted by FEMA maps. According to the New York Times, FEMA maps do not account for intense rainfall-created flooding. Climate challenges change flood risks throughout the US and abroad Until recently, reinsurers considered flood risks “secondary perils." Primary perils are events that generate large losses and are routinely “modeled," such as earthquakes and tropical cyclones. Many carriers had considered flooding a “secondary peril," a smaller or mid-sized event. However, those days are gone, according to one expert in a recent Burns & Wilcox online seminar on flooding risks. Flood risk is a major concern to today's insurers and reinsurers. In the U.S. according to CBS news, over 700,000 commercial real estate buildings, apartments, malls and office complexes face flooding risk in 2022 that could reduce business access and incur economic losses approaching $50 billion yearly. Homeowners, too, face significant flooding risks from rising inland waters, coastal storms, increased rainfall, and other water-related deluges. Add increased urban infill and greater population growth along coastlines to the mix and your insureds may not recognize the risks facing them.
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wisconsin INDEPENDENT AGENT
A New Tool to Measure Flood and Wildfire Risks A non-profit, First Street Foundation, formed by academics and climate experts, offers a free, online tool that analyzes current flood data to predict a property's flood risk. The tool categorizes flood risk from minor to extreme. After entering an address, you will receive a “Risk Factor™" analysis, with floodrisk categories ranging from minor to extreme. The analysis includes flooding that can occur from swollen rivers, rainfall, tidal flooding, and storm surge. Enter the property location to determine its risk of flooding and wildfire. An article in the New York Times stated that Risk Factor showed a “vast increase in [flood] risk compared with official estimates." Even updated flood maps are “decades old," according to the Times article, and Risk Factor includes areas not yet mapped in some instances. The article went on to say that even though Risk Factor may “overestimate some risks," FEMA welcomed the additional input provided by Risk Factor. Relying Solely on FEMA Flood Maps Can Be Problematic First Street Foundation evaluated the City of Chicago's flood risks. While FEMA maps showed that 0.3% of properties in Chicago were within the 100year flood zone, First Street found about 13% of the Chicago properties were in danger of flooding. This was more than 75,000 properties than FEMA maps predicted.
Put your own property address in at this link to see both flood risk and wildfire risk. For example, I put in our vacation property address located in Skull Valley, Arizona (it's prettier than it sounds), population 350. While our property address did not appear, the 86338-zip code did, and I received this result.
agency in the event of a claim involving surface water.
As you can see, we're more at risk from wildfire, but flood risks could also be problematic. But wait, there's more. The model also predicts the impact of flooding on roads, commercial buildings, and critical infrastructure in that zip code.
Risks of flooding and wildfire are two great reasons to reach out to your insureds
Risk Factor is a new tool you can use to help your insureds decide on their need for flood insurance, and to evaluate their wildfire risk. Reminding your insureds about their flood risks and coverage options It is always prudent to remind your insureds that their property coverages do not include the risk of flooding (where applicable). Simply because their lenders do not require flood insurance does not mean their property is not at significant risk of flooding. With the summer monsoon season and hurricane season ahead, reminding your insureds of flood coverage limitations can help protect your
Additionally, National Flood Insurance policies may not provide adequate coverage for your clients' property values, especially considering recent greatly increased construction costs.
With the increase in flooding risks, you can protect yourself and your agency by recommending flood insurance with every property policy you place, even if the lender does not require flood insurance. Reminding your clients at policy inception and at policy renewal that no flood coverage applies under the homeowners policy, or the commercial property policy, can help guard you against a professional liability claim. This article was originally published on independentagent. com in May.
> Nancy Germond, Executive Director of Risk Management & Education, Big "I"
Are you our next Agent Owner or AFFILIATE AGENCY? more markets. bigger return. proven success.
learn more: Chris Illman | cillman@robertsonryan.com | 800-258-0277 | www.robertsonryan.com/agentowner
AGENCY OPERATIONS
WANT TO COMPETE? OFFER REMOTE WORK It’s no secret that today’s job candidate is looking for a different work-life balance. The pandemic and the subsequent onset of the Great Resignation has pushed employees to re-evaluate everything. Amid the pandemic fatigue and feelings of being overwhelmed and stuck, one thing emerged: employees want more.
a seven-month period of remote work, employees work behaviors matched the pre-hurricane production levels, even though they were not logged on to their computers as often. The study also revealed that both company and employee resiliency improved as a result of remote work.
And organizations should be paying attention. As about 4 million workers quit their jobs monthly (US Bureau of Labor Statistics), employers need to find ways to not only attract new hires but also keep the employees they have.
As many of us discovered when forced to scale back (or close) operations amid the worst of the pandemic lockdowns, remote management can work. Our own company, WAHVE, has been fully remote since its inception. It takes reimagining your operations – and your approach – for remote operations to be successful.
That’s created a virtual feeding frenzy among companies across the country. In many cases, it’s an unfair fight – smaller organizations are left with finding ways to compete with big-city salaries and perks while still trying to operate on very local budgets. Yet while salary is the main reason employees are leaving for greener pastures, employees want more. According to Jobvite data, remote work flexibility ranks right up there with flexible work days and company culture as the things most important to job seekers. That means your company, no matter what size, can easily compete for the best candidates. By offering remote work and a flexible workday (allowing employees to work during the hours when they’re most productive), your organization can keep the valued talent you have and attract talent from anywhere in the country to your operations. But there are other reasons for wanting to offer remote work. Researchers in Houston analyzed the data from 264 employees to understand the impact of remote work on the business. The company was closed due to hurricane flooding. Researchers found that during 22 | JULY 2022 |
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We suggest restructuring the workday to fit the employee’s best hours, not the standard eight-hour, nine-to-five drill. Measure by outcomes achieved, not hours put in. Set goals and expectations with employees, and trust them to deliver. Above all, provide open channels of communication. Your employee should be able to reach you and feel able to discuss issues, struggles, and receive performance feedback as well as any training or mentoring support. As your organization looks to compete in a tight labor market, you can attract candidates and even retain key employees by offering remote work and flexible work arrangements. Organizations everywhere have discovered that remote work is possible. Giving job candidates and your talent the option to work remotely gives them an important component of a healthy worklife balance, and allows you to find top talent no matter where they are located.
TOP FIVE REASONS AGENTS LOVE
WORKING WITH US! 1 2 Acuity has a 20year track record of beating the industry by more than double the growth and a full eight points on the combined ratio.
Unparalleled Financial Strength RATED #1 COMPANY FOR
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SELL ACUITY!
wisconsin INDEPENDENT AGENT
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COMMERCIAL LINES
HOW THE INSURANCE INDUSTRY CAN KEEP UP WITH THE ENERGY SECTOR Since the end of 2021, the geopolitical landscape in the energy market has dramatically changed and continues to do so. The current conflict in Ukraine; China's continued implementation of its zero-COVID-19 policy; coordinated releases from the U.S. Strategic Petroleum Reserve; and oil producers' decisions to limit any increases in production are all having an impact. Meanwhile, oil prices remain volatile and oil executives have argued against ratcheting up output, unconvinced that demand will be there when the wells come online. Their focus, like any business, is returning value to shareholders, reducing debt and providing consistent growth into the future. Yet, we are seeing signs of increased production activity. From the end of 2021 to April 2022, rig counts rose 17.5%. This increase indicates a corresponding increase in all ancillary oil and gas activity. With major oil production companies committed to sustained growth and focused on profitability, the growth in rigs is primarily being driven by more nimble private operators who haven't seen a favorable economic environment for their businesses in many years. We're likely to see this expansion continue. However, economic uncertainties could result in a supply glut if certain geopolitical events lead to less demand or an increase in supply. We're also continuing to see a continued drop in drilled but uncompleted (DUC) well counts, which is another indication of increased production activity. So, what does this mean for the insurance industry? We've seen insureds of all sizes—from an oil and gas consultant to a major drilling company—increase projected revenues by at least 20%, with some growing by as much as 300%. Increased activity in the field comes with increased claims, which we're also seeing. The auto line of business is generating much of the activity as more oilfield drivers, many of whom are recent hires, may not have much experience.
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Many energy underwriters are requesting additional information regarding fleet controls and are also limiting when and where they're choosing to deploy capacity in the umbrella space. Therefore, it's important to look ahead on accounts with large losses or a large fleet to develop a game plan in advance of the renewal. Success can be found in placing difficult, wheels-driven accounts in the energy sector by leveraging underwriter relationships in the environmental, transportation and energy marketplace. Collaborating on renewals early and getting the information to market in a timely manner can help decrease the turnaround time for underwriters. Though auto and umbrella lines of business remain challenging to place, we're starting to see rates level out in these areas, as well as in general liability. Over the last few years, underwriters have focused on securing rate increases or non-renewing undesirable accounts and their efforts have resulted in a semblance of calm after the storm. We continue to see underwriters seek up to 10% rate increases on accounts with steady exposure growth while loss-free accounts within an underwriter's targeted business lines can see increases under 5%. Not all energy carriers are in a great spot. We have been monitoring some carriers regarding questionable renewals on certain accounts. This includes both carriers in the excess & surplus and admitted markets across transportation, environmental and casualty lines within the energy industry. Our advice is to proactively communicate with underwriters early to get a better picture of the renewal. Underwriters remain focused on account retention—and with exposures growing throughout the industry, this focus is even more critical.
This article was originally published on iamagazine.com in June.
> Clay Fuchs & Grant Bryant, Risk Placement Services
nice
makes you smile.
At Western National Insurance, nice is what’s guided us for over 100 years. And we’re just getting started. Western National Insurance. The power of nice. www.wnins.com
SFM RELEASES 2021 ANNUAL REVIEW
News Members in the
SECURA INSURANCE PROMOTES LARRY WRIGHT TO SENIOR VICE PRESIDENT
Neenah, WI (5/26/22) - SECURA Insurance promoted Larry Wright to Senior Vice President and Chief Claims Officer effective May 23, 2022. "Larry is well known for his ability to lead and inspire," said Garth Wicinsky, SECURA President & CEO. "His broad-based thought leadership has done amazing things in our Claims Department, and will continue to help shape the future of SECURA." Larry began his career at SECURA in 1997 as an IT programmer/analyst. He held progressive positions, including IT supervisor, IT director, workers’ compensation claims representative, workers’ compensation claims supervisor, claims project manager, casualty representative, litigation coordinator, and vice president – claims. Most recently he was promoted to Vice President and Chief Claims Officer in 2018. Larry earned a bachelor's degree in business administration from the University of Wisconsin– Eau Claire and an MBA from the University of Wisconsin Oshkosh. He earned his Chartered Property Casualty Underwriter (CPCU), Certified Insurance Data Manager (CIDM), Associate in Insurance Services (AIS), and Associate in Claims (AIC) designations. He also earned a Master’s Certificate in project management from the University of Wisconsin–Madison School of Business. 26 | JULY 2022 |
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Bloomington, MN (5/31/22) - SFM recently released its 2021 annual review, which highlights SFM's 2021 accomplishments. For SFM, 2021 represents a story of remarkable success. Our written premium soared to a new high of $212 million and we are now serving more customers than ever, following a record $30 million in new premium last year. Other 2021 highlights include: • Combined ratio of an exemplary 90%, which is a key measure of financial performance (and marks a tenth straight year under 100%) • 96.6% policyholder retention rate, which demonstrates unsurpassed customer loyalty • -4% pricing reduction, which means lower premiums for policyholders year over year At SFM, our commitment to service drives our results – not the other way around. Always at the center of the target is our dedication to doing the next right thing – for policyholders, their employees, independent agents and the community around us.
ACUITY WINS 2022 BBB TORCH AWARDS FOR ETHICS
Sheboygan, WI (6/9/22) - Acuity is named a 2022 Better Business Bureau (BBB) Torch Award for Ethics Winner. A Torch Award is the most prestigious honor BBB presents to businesses that demonstrate an outstanding commitment to integrity and ethical practices. “We are tremendously honored to be recognized by BBB with a Torch Award for Ethics and hope that our ethical business practices are an
inspiration to others,” said Acuity President and CEO Ben Salzmann. “The BBB’s focus on ethics is vital for the world today. We all must kindle an even stronger focus on ethics to support all positive aspects of humanity. This focus must start at the community level, in daily life, and rise to a global inspiration. We can make a difference.” Acuity’s selection as a winner from the BBB was based on an independent panel of judges comprised of business and community leaders who evaluated the insurer’s commitment to ethics across the areas of character, culture, customers, and community. Since 2003, BBB has honored businesses and nonprofit organizations of all sizes that meet the highest standard of ethics and trust among their employees, customers, and local communities, embodying BBB's mission to advance marketplace trust. “This year, we had more applicants than in the past five years,” said Julie Albrecht, Executive Director of the BBB of Wisconsin Foundation. “These organizations should be immensely proud of their commitment to ethics in their day-to-day operations.”
Society will make its gift in four annual payments of $25,000 from 2021 to 2024. In recognition, the St. Katharine Drexel Shelter named its singles dining area the Society Insurance Dining Room. The shelter, made possible by a partnership between St. Vincent de Paul of Fond du Lac County and Solutions Center, opened in May. This year-round facility offers food, lodging, clothing and basic necessities in a safe, stable environment. Inside the 20,000 square-foot building are bedroom, dining and common spaces for up to 15 families and 36 adult singles. Dedicated family and adult wings allow the shelter to serve those in need without separating families; children are able to stay in their home community and continue attending their school. The shelter’s design reflects a community approach to reducing homelessness, which starts with short-term crisis intervention and progresses to long-term goal planning for self-sufficiency. Partnerships with more than one dozen local nonprofit and government organizations and spaces devoted to employment advocacy, counseling and housing searches are key additional resources available to guests.
Acuity Insurance, headquartered in Sheboygan, Wisconsin, insures over 125,000 businesses, including 300,000 commercial vehicles, and nearly For more information regarding the St. Katharine a half million homes and private passenger autos Drexel Shelter or to donate, visit skdsfdl.org across 30 states. Rated A+ by A.M. Best and S&P, Acuity employs over 1,500 people.
SOCIETY INSURANCE DONATES $100,000 TO ST. KATHARINE DREXEL SHELTER
Society Insurance has pledged a $100,000 capital gift to the St. Katharine Drexel Shelter, a new resource serving people experiencing homelessness in the Fond du Lac area.
ARE YOU AN IIAW SUPPORTING COMPANY MEMBER? Send your press releases to kaylyn@iiaw.com for a chance to be featured in our Members in the News section.
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BE THE NEXT
Find out why agency owners choose us! • • • • • • • •
Broad Leadership Team that is 100% focused on the insurance business Flexible deal structures including the ability to retain some ownership Strong focus on culture, associate engagement, and client satisfaction Proven ability to drive double-digit organic growth Recruiting & mentoring program to develop those new to the industry Shareholder program for top performers Ability to maintain leadership with regional and practice group support Committed to serving our communities
Call us for a confidential conversation Tom Schaetz 419.450.0317
HUMAN RESOURCES
OVERCOMING WORKPLACE POLITICS Workplace politics can be a delicate subject. Workplace politics is the manifestation of power dynamics amongst employees. At its best, you’ll feel like you’re walking on eggshells each time you set foot in the office and at its worst, you can ruffle a few feathers, making each day feel miserable. Every office has some form of politics; what matters is whether or not they are toxic. Here we’ll go over ways you can overcome workplace politics, or at the very least stay on the right side of issues, to avoid becoming embroiled in drama. Know the Ins & Outs of the Organization The first way to overcome workplace politics is to understand different functions of the organization. This means understanding the company’s organizational structure, who reports to who. It’s also important to understand who within the organization has influence. You might ask yourself questions such as, “who are the true influencers? Who is respected? Who mentors others?” Embrace Transparency Stress the importance of open communication among and between teams, especially if you manage people. Your team members should feel at ease coming to you with problems they’re having without repercussion. Open communication leads to effective communication which then leads to an efficient workflow. When employees feel comfortable discussing workplace problems with co-workers, it leads to the potential resolution of problems.
Implement a Realistic Code of Conduct Simply having a definition for what establishes acceptable behavior is a major step in avoiding workplace conflict. Making a system for decision making, encouraging open collaboration, team building, leadership training and development, and careful hiring will all help avoid workplace conflict. It’s important to have clearly defined responsibilities so everyone knows what’s expected from them. It is equally important to have a clearly laid out chain of command to allow for effective communication. In other words, define workplace rules clearly and make it known what will or will not be tolerated. Removing assumptions will drastically reduce the risk of conflict in the workplace. Don’t Add Fuel to Fire Behaviors to avoid include: • Spreading gossip • Choosing sides • Taking part in the rumor mill • Becoming jealous Become Swiss and Don’t Take Sides It is vital that employees remain neutral during conflicts, even if you like someone more than another. Your position may be a trusted authority figure, meaning that your actions and words have significant meaning. Think about what is best for the company, not for personal satisfaction. Remaining neutral allows you to make great decisions and stay separate from workplace politics. Once a side is taken it is difficult to overcome. wisconsin INDEPENDENT AGENT
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Get Level: Cooler Heads Prevail Similar to remaining objective, don’t lose your cool and become aggressive with someone or you’ll gain a negative reputation for it. This is relevant advice for all workplace situations. If you do not remain cool, your reputation and career is at risk. Even though workplace politics may upset you, staying cool has its benefits. Keeping cool prevents you from saying or doing anything in the moment that you may regret later. Practice What You Preach: Political Behavior Comes From The Top Owners and managers influence behavior. If they promote or facilitate a toxic political atmosphere, it may be time to search for a new job. Leaders in the organization must take steps to eliminate political behavior immediately. How Managers Can Quash Negative Workplace Behavior
• Keep every employee in the organization involved so no one employee feels more important than another. • Make connections within the organization and develop strong interpersonal communication between individuals via lunches, happy hours, kickball leagues, etc. When employees are connected and respect one another, workplace politics begin to diminish. Conflict in the workplace is inevitable, even with the most agreeable personalities. The average American spends well over 2,000 hours at work over the course of a year. When employees of various backgrounds and different work styles are brought together to work on the same project with the same goal, conflict could be a natural byproduct. Not all conflict is bad, however all conflict can and should be managed and resolved. If handled correctly, confronting conflict head-on will result in a stronger culture and closer teams.
• Share the goals that you are trying to achieve and reward those who help achieve them. When the collective goal is clear, it is less likely that people will prioritize their own interests first.
> Rebecca Freiberg, Society Insurance
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In 1919, A group of Pennsylvania farmers founded Penn National Insurance to provide affordable workers’ compensation insurance. Today, Penn National Insurance sells property-casualty insurance in 11 states by partnering with more than 1,200 independent agency operations. In 2012, we affiliated with Wisconsin-based, Partners Mutual Insurance Company. As one company, we bring the personal attention and local focus of a regional carrier, along with the quality of products and services of national carriers. Interested in partnering with a thriving insurance carrier with superior customer experience? We are looking for select commercial-lines agencies in Wisconsin. Contact: Vicki Lentz 262-432-3420 vlentz@pnat.com
Contact: Clayton Zogata 715-383-5454 czogata@pnat.com
We help people feel secure and make life better when bad things happen
An Equal Employment Opportunity/Affirmative Action Employer ©2021 Penn National Insurance
Policies issued for domiciled businesses and individuals in Wisconsin and Iowa are underwritten under our affiliate, Partners Mutual Insurance Company.
• Strong financial performance and A.M. Best Financial Strength Rating of A• Expanded Commercial Lines products and services with competitive pricing and comprehensive coverages to help our agents grow profitably • Comprehensive Personal Lines product offerings, including Homeowners Equipment Breakdown and additional protection plans • State-of-the-art quoting, processing and self-service tools, making it easier and faster to meet your customers’ needs • Local, experienced underwriting, claims and management staff
AGENCY MANAGEMENT
PLANNING FOR THE UNEXPECTED This has become an all too familiar story. An agency owner reached out several weeks ago and asked me to meet with him and the owner of an agency in his town that he was looking to purchase. They had been talking for several years. They had a handshake agreement that someday he will buy the agency when the time is right. Those conversations were consistent over time, but had never turned into any action. The selling agency owner was now in his early 80s, but the time didn’t seem right just yet. Until it was. Some serious health issues caused the conversation between the two owners to change from someday into a reality. I was introduced to the selling agency owner and together with the buyer we went through what to expect in the valuation process. He was charming, funny and full of stories. It was obvious that the last thing he wanted to talk about was his career in insurance coming to an end. Instead, he preferred to reminisce about his favorite clients, brag about his amazing staff and tell me the story of how he started in this incredible industry of ours. Our 30-minute call tripled in length, but I didn’t mind at all. I loved getting to know him and honestly, I loved listening to his stories. As our call came to an end, we agreed that the completing the valuation was the next logical step. The seller expressed concern about letting his staff know he was contemplating selling, so he asked that I mail him the proposal and confidentiality agreement and send the data sheets that were required for the valuation in an email that does not mention the purpose. He planned on confiding in his office manager as she would need to help him completed the information. The proposal was sent, agreement was signed, and the data sheets were emailed. We were on our way. Two weeks later first thing Monday morning I received a call from the buyer. I answered with a chipper Good Morning and was met with an unexpected somber voice. He fumbled his words and struggled to share the news that the seller’s health had taken a turn for the worse, he was hospitalized a few days ago and passed away the previous evening. Then there was silence. I cannot even begin to tell you how much I dread this kind of call. 32 | JULY 2022 |
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My heart sank and you could tell his heart was breaking as well. We both were quiet for what seemed like forever. I broke the silence with a question, “Tell me what I can do to help?” He then shared his thoughts and plan to help the sellers widow navigate the next days, weeks and months. She is now faced with taking care of the affairs for an agency she has never been a part of and had no idea where to begin. When something like this happens, the focus goes from planning to “rescue”. Worse than that, someone who is mourning the loss of the greatest love of their life is forced to make decisions that they have no experience handling. They are forced to think about details and logistics that are in many cases completely foreign. We started discussing things like: Who has the logins and ability to access the carrier portals? How do we ensure that we keep the appointments in place and take care of the customers? Who has the logins to the accounting system, bank accounts? Is there any life insurance? Does someone know how to run payroll? What do we tell the staff? Clients? Carriers? How do we reassure the staff? It is completely overwhelming. The business that was a lifetime of work and the main source of income in their retirement is now in jeopardy. The reality is for many agency owners the time will never be right and sadly they will put planning for the transition of their agency off until there is no time left. This can happen to anyone at any age. You do not have to exit your agency to have a plan. The time is always right to make a plan. For more information about planning for your agency please visit www.agency-focus.com or contact Carey Wallace at Carey@agency-focus.com. > Carey Wallace, Business Consultant, AgencyFocus
It shouldn’t take your customer’s roof disappearing in a matter of seconds to find out who you can count on.
BUT SOMETIMES IT DOES. And that’s the Silver Lining®.
GOVERNMENT AFFAIRS
NEW POLL HIGHLIGHTS TIGHT RACES FOR GOVERNOR AND U.S. SENATE Get ready Wisconsinites for yet another closely watched, competitive election year. That’s according to the latest results from a new Marquette University Law School poll released earlier this month. The poll of 803 registered voters suggests that the high profile primary races among Republicans for the job of Governor and for the coveted position of United States Senator among Democrats are equally shaping up to be tight contests with just less than a month and a half to go until the August 9 primaries and the general election to follow on November 8. These two races, in particular, are important politically because they could ultimately decide who controls the U.S. Senate and/or whether the state of Wisconsin will continue with split party governance or have one party control of the legislative and executive branches next session. In the now, five-way Republican gubernatorial primary that determines who will face off against first-term, incumbent Democrat Governor Tony Evers, business owner Tim Michels and former Lieutenant Governor Rebecca Kleefisch are running in a neck-and-neck race with Michels having a slight lead of 27 percent among Republicans and Independents who say they will vote in the GOP primary. Kleefisch received support from 26 percent of primary voters, Kevin Nicholson had 10 percent, Tim Ramthun 3 percent, and relative unknown Adam Fischer with less than .5 percent. Tim Michels’ candidacy is a late entry into the race since April 22 and yet already he has made a name for himself (aside from his well-known 34 | JULY 2022 |
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Wisconsin construction business - Michels Corporation), most notably receiving the muchsought-after endorsement of former President Donald Trump, who continues to carry significant sway in Wisconsin and nationwide among Republican voters. Michels returns to the political stage having last ran for public office nearly two decades ago in 2004 when he won a four-way Republican primary for U.S. Senate. He ultimately lost in the general election to former U.S. Senator Russ Feingold. Kleefisch, who is most known for serving alongside former Governor Scott Walker for two full terms as Lt. Governor from 2011 to 2019, has been campaigning for the better part of a year now and leads slightly in favorability ratings among her GOP rivals with 44 percent favorability versus 10 percent who had an unfavorable view of her. Candidate Michels was close behind with 42 percent favorability and 7 percent unfavorable; Nicholson at 27 percent; and Ramthun with 3 percent. The most noteworthy statistic in this race taken from the latest poll results is that a substantial 32 percent (nearly one third) of Republican primary voters remain undecided in this contest, meaning this race is a toss-up as each of the candidates try to convince the large swath of undecided voters to support them as the Republican nominee. For someone like Kleefisch, who is a pretty wellknown commodity among GOP voters and who has been campaigning longer and harder than the rest of the field, it will likely be more difficult for her to pick up significant votes from this group of undecideds unless her campaign is able to convince them that she is the only candidate in the GOP field that can defeat Evers in November.
The Marquette poll also revealed a close race in Wisconsin’s Democratic U.S. Senate primary that will determine who will challenge incumbent U.S. Senator Ron Johnson who is running for another 6-year term despite having initially said that he wouldn’t run again. Current Lt. Governor Mandela Barnes, who is widely seen as the primary race’s frontrunner, leads the rather large, eight-person field with 25 percent of Democratic primary voters who say they would vote for him. Milwaukee Bucks executive Alex Lasry, received 21 percent with the four-point differential between him and Barnes falling within the poll’s margin of error making the race a virtual tie. In a distant third and fourth place and not gaining much ground from previously conducted polls is Wisconsin State Treasurer Sarah Godlewski who received just 9 percent and Outagamie County Executive Tom Nelson who received 7 percent support. The other remaining candidates received 1 percent or less. At some point it is possible one or both of these primary candidates (Godlewski and Nelson) may decide to suspend their campaigns due to lack of momentum and possibly throw their support behind another candidate which could dramatically alter who leads the field. Similarly as in the Republican gubernatorial race, a significant 36 percent of Democratic U.S. Senate primary voters still have not made up their minds on who to support in this wide open contest. More than one-third of primary voters are still up for grabs in this primary battle. It will be a close race to the August 9 finish line for sure, but the campaigns for Mandela Barnes and Alex Lasry have clearly established themselves as the two leading Democratic candidates in this Senate primary. The poll also previewed early head-to-head general election matchups between incumbent Governor Tony Evers and his potential Republican challengers, as well as U.S. Senator Ron Johnson against his potential Democratic rivals. The poll results revealed some initial positive news for Evers in that he leads all of his potential challengers regardless of who might emerge in the primary.
While it is still very early to make any assumptions about these results and the mood of the electorate is certainly volatile heading into November, Evers’ lead over his potential challengers highlights the advantages of incumbency and having the bully pulpit, especially if the incumbent hasn’t given voters a real strong reason to send him packing. The closest general election matchup in the poll is between Evers and Kleefisch where he has a slight lead of 47 percent to 43 percent and it was the only matchup that fell within the poll’s margin of error. However, unlike Evers, U.S. Senator Ron Johnson trailed all but one potential challenger in a head-to-head matchup, according to the poll revealing his vulnerability as an incumbent seeking re-election. The only candidate where Johnson led was against Alex Lasry by just three percentage points and all matchups fell well within the poll’s margin of error meaning this will be a very tight race in November no matter who emerges from the Democratic side. Some observers highlight that Sen. Johnson is the number one target nationally for Democrats as a seat to pick up in November. Johnson has trailed in the polls before and somehow managed to win. It remains to be seen whether or not he can continue that streak in an off-presidential election year where turnout and how independent voters break will be a determining factor. The Marquette Law School poll interviewed 803 registered Wisconsin voters by landline or cell phone from June 14-20, 2022. The margin of error is +/-4.3 percentage points for the full sample. The margin of error for 369 Democratic primary voters is 6.2 percentage points and for 372 Republican primary voters is 6.3 percentage points. See the official poll results at bit.ly/MarquettePollResults. >M isha Lee IIAW Lobbyist
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COMMENTARY FROM COUNSEL
WISCONSIN SUPREME COURT RULES NO COVERAGE FOR BUSINESS LOSSES DUE TO COVID The Wisconsin Supreme Court sided with Society Insurance in holding business are not entitled to coverage for losses due to COVID-19 and government-imposed lock downs. This unsurprising but frustrating result for policyholders is a win for insurers and the opinion brought Wisconsin into alignment with the overwhelming majority of jurisdictions that have considered the issue. The origins of the case go back to the early days of the pandemic, when state- and county-wide directives forced bars and restaurants around Wisconsin to shut their doors. With restrictions on in-person dining dramatically impacting the bottom line, businesses in the hospitality industry sought coverage for business-income interruption under their property insurance policies. Ultimately, a group of Wisconsin businesses, led by Colectivo Coffee Roasters, sued Society Insurance seeking coverage for financial losses caused by the lock downs. After a Milwaukee County Judge allowed the suit to proceed, Society appealed to the Wisconsin Supreme Court. The primary issue before the Court was whether a bar or restaurant's inability to use its dining space for in-person dining because of the pandemic and related government restrictions constitutes a direct physical loss of or damage to its property under Society's policy. The Court answered that question in the negative. Writing for a unanimous Court, Justice Rebecca Frank Dallet found the policy language required there be some sort of physical loss or damage to property to trigger coverage. In other words, there must be a “tangible harm” “that requires the property to be repaired, rebuilt, or replaced.”
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Applying that standard to the impact of COVID and related gathering restrictions, Dallet explained that although a restaurant “could not use its dining room for in-person dining for a period of time, the dining room was still there, unharmed—it was not physically lost or damaged.” Colectivo argued that courts in about half the states that have considered the issue sided with policyholders. However, Justice Dallet wrote that the “overwhelming majority” of courts agree that COVID-19’s presence does not amount to property damage under the terms of Society’s policy nor do temporary in-person dining restrictions constitute property loss. In support of that proposition, Dallet cited to federal cases in California, Connecticut, Illinois, Mississippi, Texas, Virginia, West Virginia, Wisconsin, and the District of Columbia. While not cited in the Court’s opinion, the top courts in Massachusetts and Iowa recently reached the same conclusion as the Wisconsin Supreme Court in their interpretation of property insurance policies from other insurers. For now, the clear trend in both federal and state courts goes against coverage for business losses due to COVID. That said, the stakes are extremely high and this litigation shows no sign of slowing down; there will undoubtedly be new arguments in favor of coverage put before courts around the country. Stay in touch with legal counsel so you and your agencies can adequately advise business clients on the scope of their coverage in the wake of the pandemic.
>J osh Johanningmeier IIAW General Counsel
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12/6/21 2:20 PM wisconsin INDEPENDENT AGENT
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PRSRT STD US POSTAGE PAID MADISON WI PERMIT NO. 549
