Primary Agent - May 2011 - MD Edition

Page 1

MARYLAND

ALSO INTHISISSUE: _________________ Md. court interprets other states endorsement

Insurance for Restaurants Family Style, Pizza Shops, Take-Out, Fast Food, Donut Shops, Diners, Cafes, Bagel Stores, Franchises

Brokers Surplus Agency wants to quote your restaurants! We have a terrific BOP program that’s packed with the coverages you need. New Ventures eligible! Liquor liability coverage available!

Contact us by phone or email today!

(215) 443-9900

Brokers Surplus Agency P.O. Box 2849 Warminster, PA 18974

Dennis Marsaglia, Ext. 230 dennis@brokerssurplusagency.com

Evelyn Frisch, Ext. 227 evelyn@brokerssurplusagency.com

“No bond, no job. No job, no commission.”

We know times in the construction business are tough and that even the best of clients are having problems. That’s why when your client needs a bond Commonwealth Surety should be the first call you make. With our “A” Rated Treasury Listed bonds we can provide the bond you never thought you could get. Why shop around, get buried with paperwork and hear excuses? If we can’t write the bond nobody can! We specialize in bonding those “less than perfect” clients, without cash collateral or Letters of Credit, and we’ll get you that “YES” that you want to hear in 24 hours or less. We’ve been writing bonds for small and midsized companies for over 20 years. No bond is too big or too small. And by the way, we’ll even write that bond for your perfect clients. Call now and get results not excuses. TOLL FREE: 1-800-886-7760 FAX TOLL FREE: 1-800-566-7761

The place for the hard-to-place Bonds

10

Contents PRIMARY AGENT MAGAZINE

Racing ahead in the sluggish market

18

The soft market has taken its toll. Books of business are battered, staff is worn worn thin, and agency principals are hungry for business. IA&B shares a few creative considerations for getting ahead: new markets, new clients and new services.

Page 10

The case for out-of-state workers’ comp coverage It only took a split second for Dean J. Young to fall and injure himself while framing a building on property near Salisbury, Maryland. But it took nearly six years for the courts to resolve the coverage issue that cleared the way for him to receive workers’ compensation benefits.

Page 18

Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.

Get social with IA&B

In every issue 4 5 6 8 9

Chair of the Board’s Message Member FAQ State News Coverage Corner Glance at Events

17 22 24 24 24

IA&B Partners Technology Update Advertisers Index Classified Ads Last & Least

Subscriptions: Non-member price: $2.25 per copy or $15 per year. All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request. Address inquiries to: Primary Agent Editor Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2011-5) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

Copyright 2011. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

& ! 4 m ! m # < PennPRIME is the municipal entity specialist that can clearly illustrate ways to reduce risk. Formed, owned, and governed by our members, PennPRIME offers an array of products and services that are custom-tailored for Pennsylvania’s cities, townships, boroughs, and authorities. Composed of two insurance Trusts, PennPRIME provides comprehensive property, liability and workers’ compensation coverage as well as unique service programs like grants, training opportunities and sample loss control policies. Imagine a relationship with an organization with the leadership, advocacy, and Pennsylvania-specific expertise to take the burden of risk management off your client’s shoulders. Get into the swing of reducing your client’s risk. Imagine them as a client of PennPRIME‌call today!

800.848.2040

•

717.236.9469

•

www.pennprime.com

PennPRIME is a service program of the Pennsylvania League of Cities and Municipalities

One-Stop Insurance Shopping Secure coverage for the typical insurance needs of small- to mid-sized businesses! For employees Workers’ Comp (DE, MD, PA) For property and liability BOP (MD, PA) For vehicles and fleets Commercial Auto (PA) For added protection Umbrella (MD, PA)

Features: ! Increased limits ! Coverage extensions ! Price discounts ! Good income potential ! Consolidated billing ! Coastal exposures considered

* For a complete listing of product availability, visit www.guard.com. *

A- A.M. Best Rating

GUARD Plus

Comp • Businessowner’s • Auto • Umbrella

[3]

GUARD is seeking quality agency appointments. Be one of them.

www.guard.com/apply 800-673-2465, ext 4567

Board of Directors Officers David Rosenkilde, CIC Chair of the Board Reisterstown, Md. Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P Vice Chair of the Board West Chester, Pa.

David B. Rosenkilde Sr., CIC

Chair of the Board’s M

E

S

S

A

G

E

Kathleen M. Glattly, ChFC, CLU, CPCU Immediate Past Chair of the Board Factoryville, Pa.

Members Joyce M. Bailey, CIC, CRM, CPIW Newark, Del. Norman F. Basso, CPCU York, Pa. Vincent D. “Chip” Boylan Jr., CPCU Rockville, Md. Henry “Butch” Bradley, Jr. Crofton, Md. Timothy P. Burris Thompsontown, Pa. John T. “Chip” Colwell Jr., CIC Corry, Pa. N. Lee Dotson, CIC, AAI Wilmington, Del. John L. Frankenfield Telford, Pa. G. Greg Gunn, CIC Lemoyne, Pa. Diana M. Hornung-Momot, ACSR Wilmington, Del. Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa. Robert S. Klinger, LUTCF Germantown, Md.

Overcoming market obstacles Times are tough. There’s no denying it. The economic recovery is slow at best. The soft market is the longest any of us have seen. And pressure from the strengthening direct-writer contingency grows. But there is hope. Independent agents are known for their resourcefulness, their business savvy and their customer relationships – strengths that will see them through. Not to mention their support from IA&B. Your association continues to forge ahead, developing compliance resources; providing training opportunities; monitoring industry, political and regulatory developments; and advocating on your behalf … all with your success in mind. This month’s issue of Primary Agent magazine is no exception. The lead story shares a variety of creative ways – new markets, new clients and new services – that agencies can get ahead in tough times. Take a read, and then take heart knowing that IA&B is in your corner. Until next time, Dave

Michael F. McGroarty Sr. Pittsburgh, Pa. Ann Gallen Moll, CIC Reading, Pa. Scott C. Rogers, CPIA York, Pa. Susan A. Sallada, CIC** Ft. Washington, Pa. David B. Wasson Sr., CIC State College, Pa. James M. Watkins* Dover, Del. King W. “Kip” White, LUTCF Fallston, Md. * IIABA National Director ** PIA National Director

[4]

Member FAQ QUESTION:

Agency value: What is the normal sale price of an agency? Is it still 1.5 times the commission income for a normal commercial/ personal P&C agency? ANSWER: No, it isn’t. For many years now, the use of a commission multiplier has been criticized consistently, and even rejected. There are a number of different reasons for that, including the fact that using a commission multiplier does not account for the agency’s overall profitability. It is a very poor measure of an agency’s performance. Using it could prove detrimental to either the buyer or the purchaser, depending on the circumstances. If you need to remember one thing, it is that there is no good average commission multiplier. The consensus in the industry is that each agency sale transaction should be examined, and priced, on its own merits. If one line of the income statement is likely to draw more attention, it may not be commissions, but rather EBITDA (earnings before interest, taxes, depreciation and amortization), on which a multiplier could, in fact, be applied. IA&B’s recommendation, for years now, has been to hire the services of an agency valuation consultant, who will be able to shed some light on the numbers in a more meaningful way. Depending on what your timeframe is (by the way, 10 years ahead is not too soon to start preparing), you may want to look at different options to get ready for perpetuation. This plan can include: w Identifying a potential buyer within or outside the agency (it could also be a friendly competitor) w Partnering with the identified person through a buy-sell agreement

w Reviewing whether your business structure will be an impediment to the deal due to the tax treatment of the transaction, and converting if necessary w Making your agency more palatable to a potential buyer (What this will take depends on your agency’s strengths and weaknesses … another reason to start early.) For some more food for thought, IA&B has posted various resources on its website, authored by reputable valuation consultants, on: w Merger and acquisition trends

w The concept of EBITDA as a multiplier (as a substitute to the old commission multiplier) w Agency value So, log on to www.iabgroup.com, and visit the Agency Perpetuation page. For specific questions, feel free to contact the Member Service Center by calling 800-998-9644, option 0.

DO YOU HAVE A QUESTION? E-mail it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message. You can also fax your question to (717) 795-8347. We look forward to answering your questions!

State News Primary Agent | May 2011

Md. agents (snow) storm Washington Spring snow flakes were not enough to deter IA&B members from participating in PIA’s March 31 Federal Legislative Summit. A contingent of agents gathered in Washington, D.C. to meet with four representatives and both senators in the state’s Congressional delegation. This marks IA&B’s inaugural year participating in the event. In meetings at the Capitol, agents conveyed: w The need to repeal the 1099 form provision in last year’s health care reform law w The importance of achieving an agent commission carve-out in calculating medical loss ratios w The critical nature of a long-term reauthorization of the National Flood Insurance Program

Top Photo: Chip Boylan, Linda McCann, Dave Rosenkilde and Bob Klinger brave a spring cold snap in Washington, D.C.

w Support for NARAB II legislation, which would streamline producer licensing Missed this year’s event? Watch for more information in the next few months on next year’s summit.

Middle Photo: IA&B’s delegation meets with Rep. Bartlett (second from right). Bottom Photo: IA&B members weigh in on federal issues.

[6]

MAP meetings determine IA&B’s direction Rest assured, the future of Maryland’s independent agents is in capable hands – the hands of IA&B members. Over two dozen member agents congregated for IA&B’s Member Agent Panel (MAP) meetings, held throughout the state last month. Their task? Weighing in on industry issues and providing feedback on the association’s activities and direction. The April 2011 meetings covered three main topics: w Opportunities and threats: External forces (positively and negatively) impacting member agencies w Carrier advocacy: How IA&B can best advocate on members’ behalf with carriers w Branding and marketing: Preferences, questions and concerns for an industry branding campaign The meetings also allowed association staff to recap the most recently launched IA&B programs and services and to share legislative and regulatory updates. And, during an open forum, attendees were able to air individual agency struggles and brainstorm solutions.

As always, MAP members’ feedback now heads to the IA&B Board of Directors, which will digest responses and make necessary derivations to the association’s priorities and strategic direction.

Read, follow or join the discussion

MAP meetings are held each spring and fall in locations across the state. Members serve two-year terms. The latest round of meetings kicked off the 2011-12 cycle. Read more: www.iabgroup.com/get_involved

MIA moves to birth-month license conversion Your license soon will renew on the last day of your birth month. The Maryland Insurance Administration (MIA) recently announced implementation of the NAIC’s State Based Systems (SBS) as a back-office licensing system. Highlights include: w Expiration date conversion to birth month as required by legislative amendments adopted in 2008; with more states aligning with the birth-month renewal, a producer’s resident and non-resident licenses will renew at the same time w Removal of RPI prefix from individual license numbers w Availability of a print-your-license feature More detailed information from the MIA and SBS will be forthcoming. Access IA&B’s summary: www.iabgroup.com/ md_birth_month_chart

[7]

The time to dismiss social networking as a passing fad has come and gone. The fact is, the longer you put off joining the conversation, the more you’re missing. IA&B is facilitating professional and informative exchanges on the social Web. Discuss trends and network with colleagues by joining IA&B’s LinkedIn group. Read timely updates on your association’s activities and breaking industry news by following IA&B on Twitter. New to Web 2.0? There’s no better way to learn how social networking works – and how it can work for your agency – than seeing how it’s done. Jump onboard: www.iabgroup.com/soc_media

Coverage Primary Agent | May 2011

CORNER

WORKPLACE VIOLENCE

JERRY MILTON, CIC Jerry M. Milton teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also the education consultant for IA&B, working with CISR, CIC and continuing education programs.

None of the following is news to any of you: We have been going through some tough economic times. Companies have been closing, terminating employees, converting regular employees to temporary status and outsourcing work to others. The unemployment rate has been between nine and 10 percent for several months. Between 350,000 and 400,000 individuals who have lost their jobs file for unemployment benefits each and every month.

media. It seems like very few days pass without us being inundated by the press reporting on such an event. According to the National Institute for Occupational Safety and Health, homicide is now the second-leading cause of death on the job, behind motor vehicle crashes.

As I said, this is not news to any of you. But what are some of the consequences of these tough times? Pressure at work. Stress from the work environment or from personal life. Reduction of income or loss of income. Some folks can handle these situations. Others can’t. Times like these often result in an increase in domestic violence, workplace violence and crime.

According to the U.S. Bureau of Labor Statistics, over the years of 2004-2008, an average of 564 work-related homicides occurred in the United States each year. This accounted for 10 percent of all workplace fatalities. Shootings accounted for 80 percent of the work-related homicides in 2008. Coworkers and former coworkers were the assailants in 12 percent of the shootings. Robbers were the assailants in another 40 percent in 2008. The remaining fatalities were caused by angry customers, relatives and other personal acquaintances.

Workplace violence, especially those involving mass shootings, receives extensive coverage in the

Of all the workplace shootings recorded in 2008, 24 percent occurred in the retail trade. Workplace [8]

shootings were less common in manufacturing, accounting for only 4 percent of the 2008 shootings. About four out of every five shooting victims in 2008 were male. Robbers made up 72 percent of the assailants for men and 51 percent of assailants for women. Relatives and other personal acquaintances accounted for only 4 percent of assailants of homicides for men, but 28 percent for women. Though men face triple the risk of being victims, homicide has become the leading cause of workplace death among women. If a worker is killed or severely injured in the workplace by a robber, a coworker, or a relative, it’s covered by workers’ compensation insurance – right? The answer is not a simple “yes” or “no.” The answer is “maybe.” State workers’ compensation statutes vary. For example, the Commonwealth of Pennsylvania excludes injuries intentionally caused

by a third party for personal reasons. Delaware excludes injuries caused by the willful act of another employee for personal reasons only. Maryland does not have a similar exclusion in its statute.

additional security, employee counseling, public relations costs, loss of productivity, loss of income, lawsuits and, possibly, death benefits not covered by workers’ compensation.

Even if the death of, or injury to, the employee is covered under workers’ compensation, the company can face significant expenses. It has been estimated that the average workplace violence incident costs employers $250,000. These expenses include

Responding to this increasing risk in the workplace, some insurers have developed workplace violence insurance to address many of these expenses that can result from a workplace-violence incident. Businesses that might consider this

coverage are those that deal with the public, retailers, those that are open late at night and those with little control over entry by the public. No doubt, these policies are “niche” policies and will not interest many of your insureds. However, don’t overlook the availability of and the need for this coverage. You may have an insured or two who would be interested. Y’all take care!

Glance at Events M A Y

C A L E N D A R

Date

Topic

Location

3

Contractual Liability and Certificates of Insurance

Mechanicsburg, Pa.

3-5

L&H Licensing Study Course

Philadelphia, Pa.

4

CISR: Commercial Property Course

Pittsburgh, Pa.

10-12

P&C Licensing Study Course

Pittsburgh, Pa.

11-14

CIC: Commercial Property Institute

York, Pa.

16-19

CIC: Agency Management Institute

Ellicott City, Md.

17

CISR: Agency Operations Course

Reading, Pa.

18

CISR: Commercial Property Course

Baltimore, Md.

William T. Hold Seminar

Newark, Del.

18-20

James K. Ruble Graduate Seminar

King of Prussia, Pa.

19

CISR: Commercial Property Course

Mechanicsburg, Pa.

23-26

CIC: Agency Management Institute

Erie, Pa.

24-26

P&C Licensing Study Course

Lehigh Valley, Pa.

25

CISR: Commercial Property Course

Lehigh Valley, Pa.

26

E&O Best Practices Seminar

Philadelphia, Pa.

[9]

MARKETS AND SALES

Racing Ahead in the Sluggish Market The soft market has taken its toll. Books of business are battered, staff is worn thin, and agency principals are hungry for business. On the following pages, IA&B shares a few creative considerations for getting ahead: new markets, new clients and new services.

Primary Agent | May 2011

CONSIDER NEW MARKETS The green and technological movements of the 21st century are revolutionizing industries across the board. In return, insurance opportunities abound. And a bright spot in the soft market is that more insurers are willing to write these emerging risks.

Green building and risk sprout up everywhere As of 2009, over 240 insurance companies in 29 countries offered 643 climate-related products and services, according to Ceres, a national network of investors and environmental organizations addressing sustainability challenges. U.S. companies were responsible for nearly 40 percent of these initiatives. Green-building-related insurance products, in particular, are on the rise. The most recent figures show well over 20 companies offering dozens of policies. So it’s no surprise that last year ISO introduced the Increased Cost Of Loss And Related Expenses For Green Upgrades endorsement (CP 04 02) for attachment to the commercial property coverage forms. This endorsement provides coverage for all costs, subject to the amount shown in the schedule, attributable to green upgrades following a covered, direct physical loss. Green upgrades means enhanced energy efficiency or use of environmentally preferable, sustainable materials, products or methods in design, construction, manufacture or operation, as recognized by a green standards-setter (LEED, ENERGY STAR or Green Globes). Beyond commercial green building, specialized personal and commercial auto policies now replace lost vehicles with hybrid versions. Certain homeowners’ policies allow partial losses to be repaired with ENERGY STAR products; and personal and commercial policies exist for green trendsetters who generate their own power or install eco-landscaping. Finally, there is increasing potential for ordinance or law coverage. As building codes receive eco-friendly amendments, endorsements may be necessary to provide sufficient replacement costs.

Cyber risks affect virtually everyone The risks associated with technology are multifold, and they are expanding as fast as technologies are advanced. On the commercial side, many insureds remain exposed in the event of a hardware loss. While traditional policies cover physical damages, they exclude business interruption and costs of restoring function. And for those businesses that

[ 11 ]

________________________________

One way to retain customers is through cross selling and expanding the number of policies they have with the agency. A direct correlation exists between the number of policies and customer loyalty. ________________________________

MARKETS AND SALES

Top untapped markets Searching for a way to round out accounts? Then look no further than these oft-forgotten and emerging markets. As a bonus, offering these coverages could reduce an agency’s E&O exposure and create goodwill (think: retention) with customers. Cyber liability: Personal and commercial clients alike face escalating risks as technology expands. What clients don’t know undoubtedly can hurt them. D&O: When the economy goes south, the risk of bankruptcies and, in turn, “managerial malpractice” lawsuits spikes. And despite our fragile economy and slow recovery, only 25 percent of private companies have D&O policies. EPLI: In this sluggish job market, the Equal Employment Opportunity Commission received more job-discrimination complaints during the last fiscal year than any other in the agency’s 45-year history. Which makes EPLI more critical to an insurance portfolio now than ever before. Geography: Think outside the box – and, sometimes, under it. Mine subsidence in Pennsylvania, for example, remains a significantly untapped market. Over 1 million residences rest on abandoned coal mines, yet only 58,000 homes are insured by the state’s Mine Subsidence Insurance Program. Green building: Environmental friendliness isn’t always economically so. The cost of building – and rebuilding – green is steep. Endorsements cover the replacement of pricier green products and materials in the event of a loss. Home businesses: Of the 11 million U.S. home-based businesses, the majority aren’t properly insured. The scope of their work and their businessownership status determine if an endorsement or separate policy is necessary. Flood: While FEMA ranks floods as the No. 1 natural disaster in the United States, plenty of insureds erroneously believe their homeowners’ or commercial property policy covers flood damage and unknowingly risk their property and its contents. Renters: Over 60 percent of renters do not have a renters’ insurance policy, according to a late-2010 comScore study. And searching out and insuring renters could lead to gaining their auto and umbrella policies as well.

[ 12 ]

store their customers’ personal information (read: social security numbers, credit card numbers or medical history), the stakes are higher. Beyond the government’s wrath is that of customers, who may sue. The latest cyber products, coined Network Security and Privacy Liability policies, address the risks of business interruption, data restoration, crisis management expenses, etc., and associated liability from a security breach, including breach notification (“Cyber coverage: the new ‘must-have’ in the P&C portfolio?,” National Underwriter, March 15, 2010). Beyond business risks are those associated with an individual’s actions online. Cyber bullying – coined “electronic aggression,” by the U.S. Centers for Disease Control – has gained significant notoriety in recent years. Cases making national news headlines also have brought to light insurance repercussions: liability for resulting bodily or personal injury or property damage. A coverage gap remains for injury or damage resulting from online activity. The ISO personal injury endorsement excludes intentional and malicious posts, and the AAIS homeowners’ personal umbrella excludes bodily or personal injury or property damage resulting from cyber bullying. Alerting insureds to the exclusions is a wise riskmanagement maneuver.

Primary Agent | May 2011

EXPAND YOUR CLIENT BASE Despite all of the newfangled marketing efforts available to agencies, one of the most successful tactics is one of the oldest and most tried and true: referrals. After all, a current customer’s experience speaks volumes. While agencies must mind state and federal regulations, a compliant referral program certainly is doable. According to state laws, customers can point business your way as long as they don’t sell, solicit or negotiate the insurance or discuss the specific terms of the insurance contract. And their payment cannot fall under the forbidden rebating or inducement category (see sidebar) and must be separate from their own policy(ies) with the agency. A kosher example would be to give a $10 restaurant gift card to a personal-lines client who refers his neighbor to your agency. Another approved referral program could involve an accountant client who tells her clients that she likes doing business with you and who shares your contact information with them. When you write a resulting commercial policy, you could give her a gift card. In Pennsylvania, for personal lines referrals, the fee must be a one-time, nominal, fixed-dollar amount per referral and cannot be conditioned on the actual sale. And in all states, realtors are forbidden from receiving

referral fees by the federal Real Estate Settlement Procedures Act. Regulations vary per state, so members are encouraged to read more online:

Del.: www.iabgroup.com/de/referral_fees Md.: www.iabgroup.com/md/referral_fees Pa.: www.iabgroup.com/pa/referral_fees ADD NEW OFFERINGS Of course as soon as an agency secures new clients, the work of retaining them begins. In the current economy, customer loyalty is often tested, and the competitive, buyer-friendly soft market doesn’t help. One way to retain customers is through cross selling and expanding the number of policies they have with the agency. A direct correlation exists between the number of policies and customer loyalty. Another way agencies are succeeding with maintaining their client base is through value-added services. Offering loss prevention and safety training, risk-management services, loss analysis or human resources assistance, for example, showcases an agency’s importance to a client and makes it less tempting to leave for a small cost savings. Before launching a value-added service, an agency principal must consider the following

[ 13 ]

Rebate or inducement versus referral fee In a rebate/inducement situation, the agency would be making a payment or offering a gift or special advantage to an existing or prospective client, and the gift would apply to the transaction between the client and the agency. In other words, Agent A pays Client B for transaction between A and B. w Example of inducement: If you write your policy with my agency, I will give you a free toaster. w Example of rebate: If you renew your policy with my agency, I will give you a free toaster. In a referral arrangement, the person who receives the gift is not part of the transaction that is being completed. Agent A pays a third-party (Client B) for the transaction between Agent A and Prospect C. w Example of referral: I will give you $X for every person you refer to my agency (or for every policy I write based on your referral).

MARKETS AND SALES

Value-added services When considering new offerings, remember: They cannot fall within a producer’s usual and customary services. And, of course, they cannot be specifically prohibited services. Examples of services and the percentage of agencies that offer them: Risk analysis

39%

Loss control

36%

Safety programs

35%

Claims management

25%

Employee benefits

20%

Disaster plan assistance

14%

Human resources consulting

12%

OSHA inspections, consulting

12%

Source: The National Alliance Research Academy, 2009.

(“Implementing value-added programs,” Rough Notes, February 2011): 1. Do I have agency-wide buy in? If the program isn’t understood, accepted and implemented across the board, it won’t succeed. 2. Is my staff willing to be aggressive in implementation? Clients may see the service as a nice offering but never get around to using it. That’s where agency staff must step in, get them started, keep them invested and demonstrate the program’s value.

Tri-State General Insurance Agency 1-800-556-7894

Artisan / Trade Contractors Property Casualty Underwriter

Vickie Doane x241 VDoane@tsgia.com

x x x x x x x

Transportation Underwriter

New Ventures accepted Up to 50% work subcontracted Exterior work up to 4 stories Blanket Additional Insureds Expanded list of eligible classes Tool Floaters Business Auto

Phone quotes and on-line quoting available !!

Kineta Arendall x249 Karendall@tsgia.com

We write more than just “trucking” . . . Visit us at www.tsgia.com

Maryland * Pennsylvania * Delaware * DC * Virginia * New Jersey

[ 14 ]

Primary Agent | May 2011

3. Is it financially feasible? Don’t wear your staff too thin. Big clients that bring in big commissions are the logical fit for value-added services. You can’t afford time-consuming giveaways for the little guys.

OR, WAIT IT OUT It’s been a long six years. But the longest soft market in decades is bound to harden. While reports are contradictory, the first positive, hard-market projections are seeing the light of day. Most recently, SNL Financial asserted that the personal-lines market is hardening and that commercial-lines pricing increases are on their way. The report is based on U.S. property/casualty premiums, which rose quicker in the fourth quarter of 2010 than any other since 2006. SNL credited “underwriting losses, unfavorable reserve development and an improving economy" ("Soft market is ending, really it is, says SNL Financial," Insurance Journal, March 10, 2011). MarketScout made a similar projection in January.

FINAL THOUGHTS The prolonged soft market may have left a dent in books of business nationwide. But the old adage remains true: What doesn’t kill you, makes you stronger. Agency principals are running tighter ships, staff is

[ 15 ]

working more effectively, and client relationships — by necessity — are prioritized. And implementation of a few creative ways to add and retain business now will continue to benefit agencies long after the market hardens.

_______________________________

Karen Robison is public relations director for IA&B.

Platinum Profile Insurance Agents & Brokers proudly recognizes Selective Insurance Company of America as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNER: Selective Insurance Company of America CHIEF EXECUTIVE OFFICER Gregory E. Murphy Chairman, President and CEO HOME OFFICE LOCATION Branchville, New Jersey A.M. BEST RATING A+ (Superior)

I

n 1926, Selective was started by a small business owner committed to providing prompt, fair settlements and exceptional personal service. Today, Selective’s outstanding performance continues, and can be credited to people at every level of the organization who turn individual creativity, skill, purpose and hard work into the collective innovation, strategies and energy that characterize excellence. Their expertise at delivering the distinctive combination of high-touch through strong relationships and high-tech through ease of seamless automation has created a powerful engine for profitable growth. The company’s value-added products and services are offered through approximately 980 independent agents in 22 Eastern and Midwestern states. Commercial insurance for small and medium-sized businesses, light industry, and public entities represents about 82% of the company’s insurance operations.

Selective’s highly regarded field force is dedicated to servicing and supporting agents and customers. Living and working in their territories provides Selective’s field-based employees with unlimited opportunities to develop extraordinary relationships and to deliver a level of service unmatched by competitors. The 49th largest property and casualty group in the U.S., Selective is a customer-focused, super-regional company providing a broad range of insurance and alternative risk management products and services. The company has been rated “A+” (Superior) by A.M. Best for 49 consecutive years. Selective’s financial stability in the marketplace, coupled with the nimbleness of a regional carrier, provides security for policyholders and the capacity for profitable growth for the company and its agents.

“Since our founding 85 years ago, Selective has remained committed to building strong relationships with all of our stakeholders. We value the relationships we have built with a select group of independent agents, and are dedicated to supporting their success through the powerful combination of our ‘hightouch’ business model and leading-edge technology.” Gregory E. Murphy, Chairman, President and CEO

Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers. Thank you for your continued sponsorship.

WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.

DO YOU SEE YOUR NAME? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support. Contact the Member Sales Center at (800) 998-9644, (717) 795-9100 or visit us online at www.iabgroup.com to get started.

PLATINUM LEVEL

BRONZE LEVEL

ACUITY Berkley Mid-Atlantic Group Donegal Insurance Group Erie Insurance Group Harleysville Insurance Highmark Casualty Insurance Co Insurance Agents & Brokers Service Group Inc MMG Insurance Company Millers Mutual Group Millville Mutual Insurance Co Mutual Benefit Group Ohio Casualty Penn National Insurance Selective Swiss Re The Main Street America Group Travelers Utica National Insurance Group

Aegis Security Insurance Co

GOLD LEVEL

Keystone Insurers Group Inc

Allied Insurance Progressive

Lebanon Mutual Insurance Company

SILVER LEVEL

Merchants Insurance Group

Access Insurance Company American Mining Insurance Co Cumberland Insurance Group Frederick Mutual Insurance Co Harford Mutual Insurance Co Juniata Mutual Insurance Co PSBA Insurance Trust The Motorists Insurance Group The Philadelphia Contributionship Westfield Insurance Zenith Insurance

Agency Insurance Company AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Builders Insurance Group Chubb Group of Insurance Companies Encompass Insurance First General Services Foremost Insurance Group Goodville Mutual Casualty Company Grange Insurance Companies Guard Insurance Group Hanover Fire & Casualty Insurance Company Insurance Alliance of Central PA Inc Insurance Placement Facility of PA

Mercer Insurance Group

Mercury Casualty Penn Millers Insurance Company Penn PRIME Municipal Insurance Reamstown Mutual Insurance Company Rockwood Casualty Insurance State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Mutual Service Office Inc Tuscarora Wayne Insurance Company Primary Agent May 2011

COVERAGES

The case for out-of-state workers’ comp coverage Maryland court interprets Other States Endorsement

It only took a split second for Dean J. Young to fall and injure himself while framing a building on property near Salisbury, Maryland. But it took nearly six years for the courts to resolve the coverage issue that cleared the way for him to receive workers’ compensation benefits.

Primary Agent | May 2011

I

n deciding this complicated case, involving two tiers of subcontractors and two states, the Maryland Court of Special Appeals in February clarified the meaning of a Residual Market Limited Other States Insurance Endorsement.

Background In 2005, a Delaware corporation, A&B Enterprises, Inc., contracted with Maryland resident, Richard Townsend, to build a pole building on Townsend’s Maryland property. A&B subcontracted the work to WMT Contracting, a business run by Delaware residents Wayne and Marie Travis. WMT in turn employed Young, a Delaware resident, to work on the site. After the May 16, 2005 fall, Young initially filed a workers’ compensation claim against WMT in Delaware, but that claim was later dismissed. Young then filed a claim with the Maryland Workers’ Compensation Commission. Because WMT was uninsured, the Maryland Uninsured Employers’ Fund was made a party. The Uninsured Employers’ Fund promptly made both A&B and its insurance carrier, Zurich American Insurance Company, third parties in the case. The Maryland Workers’ Compensation Commission found WMT was uninsured, but recognized A&B as a “statutory employer” under Maryland law, and therefore liable for Young’s benefits to be paid out of the Zurich policy. Zurich petitioned for judicial review, and the Montgomery County, Maryland Circuit Court affirmed the commission’s ruling, resulting in the appeal to the Court of Special Appeals.

Decision The court focused its decision on the insurance policy Zurich issued in Delaware to A&B, which provided workers’ compensation coverage. In the policy application, A&B said Delaware was the only state in which it performed work. So, the workers’ compensation portion of the coverage applied to Delaware’s workers’ compensation law. But the policy also contained a Residual Market Other States Insurance Endorsement, which promised to promptly pay benefits for workers’ compensation as required by any other state, if all conditions were met. It was these conditions that the court examined:

Learn more Read more about workers’ compensation coverage, including issues with out-of-state employers, online. Delaware: www.iabgroup.com/de/coverages/wc Maryland: www.iabgroup.com/md/coverages/wc Pennsylvania: www.iabgroup.com/pa/coverages/wc

_____________________________

1. The employee claiming benefits was either hired under a contract of employment made in [Delaware] or was, at the time of injury, principally employed in [Delaware]: and 2. The employee claiming benefits is not claiming benefits in a state where, at the time of injury (i) you have other workers’ compensation insurance coverage, or (ii) you were, by virtue of the nature of your operations in that

In deciding this case, the Maryland Court of Special Appeals clarified the meaning of a Residual Market Limited Other States Insurance Endorsement. _____________________________

[ 19 ]

COVERAGES

state, required by that state’s law to have obtained separate workers’ compensation insurance coverage, or (iii) you are an authorized self-insurer or participant in a self-insured group plan; and

3. The duration of the work being performed by the employee claiming benefits in the state for which that employee is claiming benefits is temporary. The court noted that each of these three requirements were

Young was hired in Delaware, and was, at the time of injury, principally employed in Delaware. In addition, the court concluded that Young’s work was temporary, satisfying the first and third requirements. The court spent most of the opinion analyzing the second requirement.

Janito Janitorial orial covera age coverage in a five-m five-minute minute phon ne call. phone Call. Quote. Bind. 1ĂƒÂˆÂ˜}ĂŠ/ * "½ĂƒĂŠVÂœĂ•Ă€ĂŒiÂœĂ•ĂƒĂŠ>˜`ĂŠÂŤĂ€ÂœÂ“ÂŤĂŒĂŠV>Â?Â?ĂŠViÂ˜ĂŒiĂ€]ĂŠ >Â˜ÂˆĂŒÂœĂ€Âˆ>Â?ĂŠ 1ĂƒÂˆÂ˜}ĂŠ/ ĂŠ/ * "½ ĂƒĂŠVÂœĂ•Ă€ĂŒiÂœĂ•ĂƒĂŠ>˜`ĂŠÂŤĂ€ÂœÂ“ÂŤĂŒĂŠV>Â?Â?ĂŠV ĂŠ ĂŠ ĂŠ ĂŠ ĂŠĂŠViÂ˜ĂŒiÀÀ]ĂŠ ]ĂŠ >Â˜ÂˆĂŒÂœĂ€Âˆ>Â?ĂŠĂŠ VÂœĂ›iĂ€>}iĂŠV>Â˜ĂŠLiĂŠÂľĂ•ÂœĂŒi`]ĂŠLÂœĂ•Â˜`ĂŠ>˜`ĂŠ`iÂ?ÂˆĂ›iĂ€i`ĂŠĂŒÂœĂŠĂžÂœĂ•Ă€ĂŠi‡“>ˆÂ?ĂŠÂˆÂ˜LÂœĂ?ĂŠÂľĂ•ÂˆVÂŽÂ?ÞÊ>˜`ĂŠ VÂœĂ›iĂ€>}iĂŠV>Â˜ĂŠLiĂŠÂľĂ•ÂœĂŒi`]ĂŠLÂœĂ• ĂŠ ĂŠ ĂŠ ĂŠ Ă•Â˜`ĂŠ>˜`ĂŠ`iÂ?ÂˆĂ›iĂ€i`ĂŠĂŒÂœĂŠĂžÂœĂ•Ă€ĂŠi‡“>ˆÂ?ĂŠÂˆÂ˜ ĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ĂŠ LÂœĂ?ĂŠÂľĂ•ÂˆVÂŽÂ?ÞÊ>˜`ĂŠ >VVĂ•Ă€>ĂŒiÂ?ÞÊ`Ă•Ă€ÂˆÂ˜}ĂŠÂœÂ˜iĂŠvÂˆĂ›iÂ‡Â“ÂˆÂ˜Ă•ĂŒiĂŠÂŤÂ…ÂœÂ˜iĂŠV>Â?Â?° >VVĂ•Ă€>ĂŒiÂ?ÞÊ` ĂŠ`Ă•Ă€ÂˆÂ˜}ĂŠÂœÂ˜iĂŠvÂˆĂ›iÂ‡Â“ÂˆÂ˜Ă•ĂŒiĂŠÂŤÂ…ÂœÂ˜iĂŠV>Â?Â?° ĂŠ ĂŠ ĂŠ ĂŠ CGL Coverage Available: Available: UĂŠĂŠ*Ă€ÂˆÂ“>ÀÞÊÂ?ÂˆÂ“ÂˆĂŒĂƒĂŠĂ•ÂŤĂŠĂŒÂœĂŠfĂŽĂŠÂ“ÂˆÂ?Â?ÂˆÂœÂ˜ĂŠĂŠ UĂŠĂŠ*Ă€ÂˆÂ“>ÀÞÊÂ?ÂˆÂ“ÂˆĂŒĂƒĂŠĂ•ÂŤĂŠĂŒÂœĂŠfĂŽĂŠÂ“ÂˆÂ?Â?ˆœ ĂŠĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ÂœÂ˜ĂŠĂŠ ĂŠĂŠ ĂŠ ĂŠ ĂŠ ĂŠĂŠ"VVÕÀÀi˜ViÉ }}Ă€i}>ĂŒi É }} } UĂŠĂŠfx]äääĂŠ i`ˆV>Â?ĂŠ*>ޓiÂ˜ĂŒĂƒĂŠ Âœ UĂŠĂŠfx]äääĂŠ i`ˆV>Â?ĂŠ*>ޓiÂ˜ĂŒĂƒĂŠ ÂœĂ›iĂ€>}ipĂŠ ĂŠĂŠ ĂŠ ĂŠ ĂŠ ÂœĂ›iĂ€>}ipĂŠĂŠ ĂŠ ĂŠ ĂŠÂˆÂ˜VÂ?Ă•`i` UĂŠĂŠ Â?>˜ŽiĂŒĂŠ ``ÂˆĂŒÂˆÂœÂ˜>Â?ĂŠ Â˜ĂƒĂ•Ă€i`ĂŠ UĂŠĂŠ Â?>˜ŽiĂŒĂŠ ``ÂˆĂŒÂˆÂœÂ˜>Â?ĂŠ Â˜ĂƒĂ•Ă€i`ĂŠ ˜`ÂœĂ€Ăƒi“iÂ˜ĂŒpĂŠ ĂŠĂŠ ĂŠ ĂŠ ĂŠ ˜`ÂœĂ€Ăƒi“iÂ˜ĂŒpĂŠĂŠ available UĂŠĂŠ ÂœĂƒĂŒĂŠ iÞÊ ÂœĂ›iĂ€>}ipfĂ“x]äääĂŠ UĂŠĂŠ ÂœĂƒĂŒĂŠ iÞÊ ÂœĂ›iĂ€>}ipfĂ“x]äääĂŠ ÂˆÂ“ÂˆĂŒĂŠ>Ă›>ˆÂ?>LÂ?i ĂŠĂŠ ĂŠ ĂŠ äĂŠ ÂˆÂ“ÂˆĂŒĂŠ>Ă›>ˆÂ?>LÂ?i ĂŠ UĂŠĂŠ*Ă€ÂœÂŤiĂ€ĂŒĂžĂŠ >“>}iĂŠ Ă?ĂŒiÂ˜ĂƒÂˆÂœÂ˜ĂŠ UĂŠĂŠ*Ă€ÂœÂŤiĂ€ĂŒĂžĂŠ >“>}iĂŠ Ă?ĂŒiÂ˜ĂƒÂˆÂœÂ˜ĂŠ>Ă›>ˆÂ?>LÂ?iĂŠ­ >Ă€i]ĂŠĂŠ ĂŠĂŠ ĂŠ ĂŠ ĂŠ>Ă›>ˆÂ?>LÂ?iĂŠ­ >Ă€i]ĂŠĂŠ ĂŠ ĂŠĂŠ ĂŠ ĂŠĂŠ Ă•ĂƒĂŒÂœ`ÞÊ>˜`ĂŠ ÂœÂ˜ĂŒĂ€ÂœÂ?ÂŽĂŠ*ÂœÂ?ˆVÞÊ ĂŠ Ă•ĂƒĂŒÂœ`ÞÊ>˜`ĂŠ ÂœÂ˜ĂŒĂ€ÂœÂ?ÂŽĂŠ*ÂœÂ?ˆVÞÊ ÂˆÂ“ÂˆĂŒĂƒĂŠĂ•ÂŤĂŠĂŒÂœĂŠ>ĂŠĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ÂˆÂ“ÂˆĂŒĂƒĂŠĂ•ÂŤĂŠĂŒÂœĂŠ>ĂŠĂŠ ĂŠ ĂŠ ĂŠ ĂŠĂŠ ĂŠ Êʓ>Ă?ÂˆÂ“Ă•Â“ĂŠÂœvĂŠfĂ“xä]äääĂŠ"VVĂ• ʓ>Ă?ÂˆÂ“Ă•Â“ĂŠÂœvĂŠfĂ“xä]äääĂŠ"VVÕÀÀi˜ViÉ }}Ă€i}>ĂŒi ĂŠ ĂŠ ĂŠ ÕÀÀi˜ViÉ }}Ă€i}>ĂŒi UĂŠĂŠ Ă?ViĂƒĂƒĂŠÂœĂ€ĂŠ1“LĂ€iÂ?Â?>ĂŠ ÂˆÂ“ÂˆĂŒĂƒĂŠĂ• UĂŠĂŠ Ă?ViĂƒĂƒĂŠÂœĂ€ĂŠ1“LĂ€iÂ?Â?>ĂŠ ÂˆÂ“ÂˆĂŒĂƒĂŠĂ•ÂŤĂŠĂŒÂœĂŠfxĂŠÂ“ÂˆÂ?Â?ˆœ˜ ĂŠĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ÂŤĂŠĂŒÂœĂŠfxĂŠÂ“ÂˆÂ?Â?ˆœ˜ ĂŠ ĂŠ ĂŠ ÂœĂŠ i`Ă•VĂŒÂˆLÂ?iĂŠ,iÂľĂ•ÂˆĂ€i`

*Ă€ÂœÂŤiĂ€ĂŒĂžĂŠ ÂœĂ›iĂ€>}iĂŠ *Ă€ÂœÂŤiĂ€ĂŒĂžĂŠ ÂœĂ›iĂ€>}iĂŠ Ă›>ˆÂ?>LÂ?i\ ĂŠ iĂŠ ĂŠ Ă› Ă›>ˆÂ?>LÂ?i\ UĂŠĂŠ Ă•ÂˆÂ?`ˆ˜} UĂŠĂŠ ÂœÂ˜ĂŒiÂ˜ĂŒĂƒ ĂŠĂŠ ÂœÂ˜ĂŒiÂ˜ĂŒĂƒ UĂŠĂŠ Ă•ĂƒÂˆÂ˜iĂƒĂƒĂŠ ˜Vœ“i ĂŠĂŠ ĂŠ i UĂŠĂŠ >ĂƒÂˆV]ĂŠ Ă€Âœ>`ĂŠÂœĂ€ĂŠUĂŠĂŠ >ĂƒÂˆV]ĂŠ Ă€Âœ>`ĂŠÂœĂ€ĂŠ-ÂŤiVˆ>Â?ĂŠ ÂœĂ€Â“ ĂŠĂŠ ĂŠ ĂŠ ĂŠ-ÂŤiVˆ>Â?ĂŠ ÂœĂ€Â“ ĂŠ UĂŠĂŠ,iÂŤÂ?>Vi“iÂ˜ĂŒĂŠ Âœ UĂŠĂŠ,iÂŤÂ?>Vi“iÂ˜ĂŒĂŠ ÂœĂƒĂŒĂŠÂœĂ€ĂŠ VĂŒĂ•>Â?ĂŠ ĂŠĂŠ ĂŠ ÂœĂƒĂŒĂŠÂœĂ€ĂŠ VĂŒĂ•>Â?ĂŠ ĂŠ ĂŠ ĂŠ ĂŠ ĂŠ >ĂƒÂ…ĂŠ6 ĂŠĂŠ >ĂƒÂ…ĂŠ6>Â?Ă•i ĂŠ6> >Â?Ă•i UĂŠĂŠ ÂľĂ•ÂˆÂŤÂ“iÂ˜ĂŒĂŠ Ă€i> UĂŠĂŠ ÂľĂ•ÂˆÂŤÂ“iÂ˜ĂŒĂŠ Ă€i>ÂŽ`ÂœĂœÂ˜ ĂŠĂŠ ĂŠ ÂŽ`ÂœĂœÂ˜ UĂŠĂŠ ˜Â?>˜`ĂŠ >Ă€ÂˆÂ˜i UĂŠĂŠ ÂœÂ“ÂŤĂ•ĂŒiÀÊ ÂľĂ•ÂˆÂŤ UĂŠĂŠ ÂœÂ“ÂŤĂ•ĂŒiÀÊ ÂľĂ•ÂˆÂŤÂ“iÂ˜ĂŒ ĂŠĂŠ ĂŠ “iÂ˜ĂŒ UĂŠĂŠ ÂœÂ˜ĂŒĂ€>VĂŒÂœĂ€Ăƒ½ĂŠ ¾Õ UĂŠĂŠ ÂœÂ˜ĂŒĂ€>VĂŒÂœĂ€Ăƒ½ĂŠ ÂľĂ•ÂˆÂŤÂ“iÂ˜ĂŒ ĂŠĂŠ ĂŠ Ă•ÂˆÂŤÂ“iÂ˜ĂŒ UĂŠĂŠ"Ă•ĂŒĂƒÂˆ`iĂŠ-ˆ}Â˜ĂƒĂŠ *A Available vailable coveragess and markets may vary dependent upon risk characteristics.

The TAPCO TAPCO Service Service Pledge P U “ “Aâ€?-raĂŒe` Aâ€?-raĂŒe` ˜ ˜o˜-a`“iĂŒĂŒe` o˜-a`“iĂŒĂŒe` ccarrier arrier U C o“eĂŒiĂŒive ÂŤ rici˜g Co“eĂŒiĂŒive ÂŤrici˜g U aĂƒĂŒ ÂŤ olicĂž ĂŒĂŒĂ•r˜aroĂ•Â˜` Ă•r˜aroĂ•Â˜` aĂƒĂŒ ÂŤolicĂž U ˜-Â…ÂœĂ•Ăƒe ˜-Â…ÂœĂ•Ăƒe vvi˜a˜ci˜g i˜a˜ci˜g a vailable ii˜ ˜“ oĂƒĂŒ ĂƒĂƒĂŒaĂŒeĂƒ ĂŒaĂŒeĂƒ available “oĂƒĂŒ U Q Ă•icÂŽ cclaiÂ“Ăƒ laiÂ“Ăƒ Â… a˜`li˜g QĂ•icÂŽ Â…a˜`li˜g f10 ĂžoĂ•r ÂŤerĂƒo˜alize` /A*CO Z U f 10 ccre`iĂŒ re`iĂŒ ĂŒĂŒo oĂž oĂ•r ÂŤ erĂƒo˜alize` / A*CO Z Ă•cÂŽĂƒĂƒ 6 iĂƒa ` ebiĂŒ ccar` ar` Ăœ iĂŒÂ… e acÂ… ÂŤ olicĂž Ă•cÂŽĂƒ `ebiĂŒ ĂœiĂŒÂ… eacÂ… ÂŤolicĂž 6iĂƒa U 6 iĂƒa] aĂƒĂŒerCar` a ˜` A CH ÂŤ aޓeÂ˜ĂŒĂƒ a cceÂŤĂŒe` 6iĂƒa] aĂƒĂŒerCar` a˜` ACH ÂŤaޓeÂ˜ĂŒĂƒ acceÂŤĂŒe`

1,000 1 ,000 S Strong trong

More o than 1,000 classes of P&C business written ri under bin binding nding authority. authority.

joined by “and� so these conditions would all have to be satisfied for the policy holder to be responsible for the workers’ compensation benefits. However, within the second requirement there are three conditions separated by “or.� The court found that because the lead in paragraph is written in the negative, satisfaction of any of the three subparts prevents coverage.

800-334-5579

A&B did not have other workers’ compensation insurance in Maryland. It was not an authorized self-insurer in that state. The court then turned to Maryland law for the subsection involving a state’s requirement to have obtained separate workers’ compensation. Under Maryland law, an employee is a “covered employee� if injured in Maryland unless the employee was considered a “casual employee� under Maryland Code or in Maryland only “intermittently or temporarily.� In this case, Young was hired as a regular employee, and he and WMT intended “that he would continue employment for a regular and indefinite term,� the ruling found. He was therefore not a “casual employee.�

www.gotapco.com w www .gotapco.com

[ 20 ]

The court interpreted the endorsement to provide coverage where “an employee employed in the state of coverage [Delaware] is injured in another state [that] provides for benefits under its laws [Maryland], but the employer does not regularly do business in that state, and the employee is performing work in that state on a temporary basis.” The court found that Young was hired in Delaware, his work in Maryland was temporary and Maryland did not require separate workers’ compensation insurance coverage within the meaning of the endorsement. As a result, Young will receive coverage for workers’ compensation benefits under the Zurich policy. _______________________________

When it comes to

James P. Steele contributed this article. He is a board member of the mid-Atlantic firm Carr Maloney and president of the D.C. Defense Lawyers’ Association. He focuses his practice on insurance coverage and complex litigation.

Umbrella or Equipment Breakdown Coverage We have fast, competitive quotes for you, with the service you deserve. • Designed for Condos, Co-ops, Townhouses, Apartments, HOAs, PUDs, Habitational Accounts, and Lessor Risk Only Exposures • Limits from $1 Million to $50 MIllion • Coverage Includes Excess, G.L., D&O, & Auto • Minimum premiums as low as $350 For additional information or quotes call:

888.548.2465 And ask for a New Business Underwriter or email info@umbrellaprogram.com

Visit our website at www.umbrellaprogram.com A subsidiary of

JGS INSURANCE

[ 21 ]

®

Service is our specialty; protecting you is our mission ®

Primary Agent | May 2011

Technology U P DATE

MATTHEW MARKO

SOCIAL MEDIA TIME-SAVERS

Matthew Marko is a marketing process manager for Progressive Insurance. He works to provide local marketing strategies, tools and co-branded collateral to help independent agencies grow their businesses. E-mail him at matthew_marko@progressive.com. Matt prepared this article for ACT. For more information about ACT, contact Jeff Yates, ACT Executive Director at jeff.yates@iiaba.net. This article reflects the views of the author and should not be construed as an official statement by ACT.

As a marketing process manager for Progressive, I speak with independent agents across the country about the importance of social media. For most, finding time in their busy schedule is one of the biggest concerns. But you don’t have to dedicate hundreds of hours to see a return from social media. A well-defined strategy (and a few time-saving tools) can help you strike a balance between the time you invest and the value your investment adds. When it comes to social media planning, there’s no right or wrong level of

involvement. The most important factor is consistency. Start by setting goals for your agency’s participation. Whether it’s regular interaction with customers on Facebook, a tweet every few days or a weekly blog post, you can strengthen your social media presence by having clear goals in sight. Here are three levels of social media involvement to consider based on the time you want to commit and the goals you set: Listen (1-2 hours a week) This should be the first step of any social media strategy.

[ 22 ]

After you’ve set up your agency’s accounts on sites like Facebook, Twitter and LinkedIn, study what people are saying on the platform. Check sites like Google Places or Yelp! for customer reviews of your agency. Friend your customers and follow their updates, track your competitors’ tweets and watch how people respond. Note what’s working, record the questions and topics that dominate the conversation, and think through how you’d respond. By first using social media as a listening tool, you’ll learn best practices for status updates, tweets and blog posts before creating your

own. Plus, you can apply what you’re learning from online chatter to shape quoting and in-person conversations with your customers. Time-savers w Clearly outline actions and responsibilities within your agency to prevent redundancy, maintain focus and meet your social media goals. For example, you could assign a single person in your agency to review Facebook, Twitter and LinkedIn for one hour, twice a week. w “Like” competitor Facebook pages from your personal profile to more easily follow their updates when you’re online. w Search Twitter and third party directories like WeFollow and Twellow to identify popular profiles associated with insurance. Create Twitter lists to organize the people you follow by category (customers, competitors, etc.), and use programs like Hootsuite or Tweetdeck to monitor your Twitter lists at a glance. w Use a reputation management tool to monitor what people are saying about your agency. Consider using free services like SocialMention and Google Alerts, or more robust paid services like ChatMeter, LocationMonitor or Trackur. w Create a Google Reader account for one-stop monitoring of key insurance blogs and publications. Content hubs can save you hours a week by better organizing content for quick review. Respond (2-5 hours a week) After taking some time to listen, join the conversation by responding to questions, posts and comments with a helpful link or thoughtful answer. Note

that while answering questions or directing people to another online resource builds goodwill and trust, “hijacking” an online conversation to explicitly promote your agency can undermine your efforts. Provide helpful advice over time and associate comments with your agency through hyperlinks or a simple signature with contact information. Remember, showing your value doesn’t require you to give “pro bono” advice. Asking the right questions and outlining relevant points customers should consider can demonstrate the value of an independent agent and lead to a follow-up phone call. Time-savers w Focus on a few active online communities rather than jumping around looking for every opportunity to respond. You’ll get to know the members better, and your participation will build credibility that can lead to references across the social network. w Develop a FAQ of common topics, your responses and online resources you can share. Using these responses as a starting point can save time when responding to similar questions or comments. Publish (5+ hours a week) The final level of social media engagement is proactively communicating to your audience. Although most businesses prefer to jump right into engagement, by listening and responding first, you’ll be more comfortable with the medium and your audience. By starting slow, you’ll also have a better understanding of the time you have for social media, and you’ll be more likely to provide the consistent presence necessary to build trust.

[ 23 ]

Time-savers w Put a process in place to keep your involvement consistent and efficient. Assign a producer, CSR or a marketing intern from a local college as your social media manager to ensure a single point of contact. Make sure they work alongside everyone in your agency to get questions answered and develop content without bottlenecks. Remember that effective social media engagement is timely and human. Delayed responses and overly corporate language limit your effectiveness online. w Share any quality information you think followers may be interested in – it doesn’t always need to be about insurance. Not only can this save you time developing your own content, it provides value to fans, followers and readers and increases the chance that others will share your content with their communities. w Distribute the work among a few employees to keep it manageable. This adds variety to your posts and prevents disruption due to vacation, job changes or illness. w Mix up your content. A thoughtprovoking question can be as effective as a blog post and takes a fraction of the time to compose. Discussing community events or commenting on your favorite sports team can also engage your audience without the research and writing time longer posts may require. Plus, consumers will appreciate seeing the personality of your agency and its employees. Editor’s note: To learn more on social media, visit www.iabgroup.com, select Technology from the left-hand menu bar and then click Other Resources.

Classified ADVERTISEMENTS

SOUTHEAST PA PRODUCERS & AGENCIES Professional agency since 1926 located in Feasterville, Bucks County, Pa. Call for confidential information and a review of our services. Contact Ray Reinard at (215) 375-8600, Ext. 119.

If you would like to place a Classified Advertisement, simply fax your ad on company letterhead to (717) 795-8347, and we will take care of the rest.

Good name, meet bad antics

Ad Index Atlantic Specialty Lines Inc . . . . . . . . . . . . . . .IBC Brokers Surplus Agency . . . . . . . . . . . . .IFC, IBC Commonwealth Ins Co . . . . . . . . . . . . . . . . . . . .1 Frederick Mutual Ins Co . . . . . . . . . . . . . . . . .IBC Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Harford Mutual . . . . . . . . . . . . . . . . . . . . . . . . .21 IA&B Partners Program . . . . . . . . . . . . . . . . . . .17 Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC Penn National Insurance . . . . . . . . . . . . . . . . .15 PennPRIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

While corporations never would take a celebrity endorsement lightly, that’s exactly how some celebrities take their end of the deal. Enter reputation ris k ins urance . New York-based DeWitt Stern rolled out the product in early 2010, coincidentally at the same time Tiger Woods’ scandal broke and his endorsements crumbled. The purpose? To “protect brands, corporate entities and advertisers against losses incurred from reputational crises, … both the cost of crisis remediation and actual loss of revenue following a public relations crisis.” A new concept stateside, the coverage is popular for wary companies in Europe.

Philadelphia Contriutionship . . . . . . . . . . . . . . .5 Preferred Property Program . . . . . . . . . . . . . . .21 TAPCO Underwriters . . . . . . . . . . . . . . . . . . . . .20 Tri-State General Ins Agency LTD . . . . . . . . . . .14

[ 24 ]

----------------------------------------------------------------———————------The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

IF YOU HAVE THE TOOLS, WE HAVE THE INSURANCE.

Residential Contractors with up to 5 employees can find great deals on liability insurance at Brokers Surplus Agency. We represent Utica First Insurance, one of the largest writers of small contracting firms in the Northeast, and we can give you a free quote on all your coverage needs! Call or email us today! Brokers Surplus Agency, P.O. Box 2849, Warminster, PA 18974 Call (215) 443-9900

Contact: Dennis Marsaglia, Ext. 230 dennis@brokerssurplusagency.com Evelyn Frisch, Ext. 227 evelyn@brokerssurplusagency.com

3

1/18/11 11:29:18 AM

At Frederick Mutual, we adhere to the following Pillars of SUCCESS

S U C C E S S

ecurity in Your Time of Need nparalleled Customer Service orporate Integrity ompetitive Pricing ase of Doing Business uperior Financial Strength ound Products

Frederick Mutual Insurance Company, an AM BEST A- (Excellent), VI property/casualty insurer writing in Maryland and Pennsylvania is currently looking for experienced property/casualty insurance agents licensed to write personal and commercial lines business in Maryland and Pennsylvania. Frederick Mutual, a niche company, specializes in writing Small Artisan Contractors, Mainstreet BOP Business, Homeowners, Dwelling Fire and Personal Umbrella. Established in 1843, we pride ourselves on our quality of service and desire to partner with equally dedicated professionals.

Additional background information regarding Frederick Mutual is available on our website at www.fredmut.com. 57 Thomas Johnson Drive, Frederick, MD 21702-4301 301-663-9522

Ripe R ipe For For the the P icking Picking Let IInterstate Let nterstate hhelp elp you you reap reap the the abundance abundance of of summer summer opportunities. opportunities. YYour our cclients lients with with outdoor outdoor businesses businesses need need extra extra protection protection for for tthe he uunique nique rrisks isks tthat hat tthe he ssummer ummer season season brings. brings. Interstate Interstate can can cover: cover: Rides, • AAmusement musement PParks, arks, BBatting atting CCages, ages, KKiddie iddie Ri des, GGo-Karts o-Karts & BBumper umper BBoats oats • FFestivals, estivals, SSpecial pecial EEvents, vents, PParades arades aand nd CCarnivals arnivals Hole-in-One •H ole-in-One aand nd FFishing ishing CContests ontests aand nd BBowling owling TTournaments ournaments • SSports ports CCamps amps aand nd IInstructors nstructors Horse Races •H orse CClubs, lubs, BBoarding, oarding, SShows hows aand nd Ra aces • PPet et GGroomers, roomers, KKennels ennels aand nd TTrainers rainers Outdoor Outfitters •O utdoor GGuides uides aand nd O utfitters IInterstate nterstate aalso lso ooffers ffffeers ccoverages overages for for a variety variety of of other other seasonal seasonal and and non-seasonal non-seasonal bbusinesses usinesses with w ith sspecial pecial ccoverage overage needs needs including: including: Markets • FFlea lea M arkets aand nd VVendors endors Driving Ranges •D riving Ra nges • BBeauty eauty aand nd BBarber arber SShops hops Health •H ealth aand nd FFitness itness CClubs lubs • BBars, ars, TTaverns averns aand nd RRestaurants estaurants • LLawn awn CCare are aand nd LLandscaping andscaping CContractors ontractors Window • JJanitorial anitorial aand nd W indow CCleaning leaning SServices ervices Washers • PPower ower W ashers Haulers • GGarbage arbage aand nd RRefuse efuse H aulers

CCall all Interstate Interstate for for tthe he best best coverages coverages for for all all your your hard-to-place hard-to-place rrisks. isks.

o,

Pennsylvania, Delaware, Pennsylvania, Delaware, Maryland, Maryland, Ohio, Ohio, Virginia Virginia & W West est VVirginia irginia 22307 307 Menoher Menoher Boulevard Boulevard • Johnstown, Johnstown, PA PA 15905 15905 8814-255-7878 14-255-7878 • 1-800-452-0297 1-800-452-0297 • FFax: ax: 8814-255-6010 14-255-6010 w ww.interstate-insurance.com www.interstate-insurance.com

Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.