Contents COLUMNS
4 Protecting and Insuring Wine Collections
Neil Kaplan, J.D., DipWSET, AAA, reviews the important considerations in establishing an accurate value for wine collections and other collectable items as presented in The National Alliance’s Certified Personal Risk Manager (CPRM) Program. Set yourself apart by improving the questions and advice you can use with your personal lines clients.
12 What’s the Meaning of This? Announcing a New Glossary
Learn how The National Alliance is using innovation to help program participants access the definitions of insurance, financial, and risk management terms used throughout the industry.
16 Is It Covered? The Lack of Coverage for COVID-19 Under Standard Business Income and Extra Expense Coverage Forms
Paul W. Burkett, J.D., CPCU, CIC, CRM, ARM, ALCM, discusses the lack of coverage for COVID-19 claims under standard business income and extra expense coverage forms, and highlights the E&O exposure faced by servicing professionals when taking such claims. He then looks ahead at how coverage might be possible in the future.
22 Homeowner’s Endorsements— The Details Make the Difference
Jerry Kennedy, CIC, examines the intricacies of various endorsements which modify property and liability coverage within homeowners policies. The article focuses on common and not-so-common endorsements that are also presented in the William T. Hold Seminars. Proper use of these endorsements helps to reduce E&O claims and provide better coverage for clients.
33 Pandemic Pods and Microschools— The Insurance Implications
Dustyne Bryant, MBA, CIC, CISR, probes a situation largely caused by the COVID-19 Pandemic, forcing parents to review education alternatives for their children. This article helps equip insurance professionals to explain the insurance and risk management implications of education pods and microschools to their clients.
FEATURES
8 Are You Sure You Deliver Great Customer Service?
No agency prides itself on delivering terrible customer service; LuAnn Wooters, CISR, AAI, explains how Dynamics of Service training can help make good customer service even better. Better customer service helps increase agency profitability.
14 Josh Kroeger, UACIC—a Student Success Story
Learn how Josh Kroeger used National Alliance education resources, in combination with his degree from Middle Tennessee State University, to carve out a new career in insurance sales and production.
20 The Art of Time Management— Establishing Boundaries When You Don’t Have Time
Dustyne Bryant, MBA, CIC, CISR, explains some ways to combat too much to do and not enough time available to do it. Learning how to say “no” in the right way can help servicing staff efficiently produce high quality work, and be happier in their jobs, too.
28 Designations—Much More Than Just Letters After Your Name
Ashley Fitzsimmons, CISR, details how insurance professionals can use their designations for far more than email signatures and business cards. She explains how professional insurance designations can be used to earn trust, educate clients and prospects, and set yourself and your agency apart from the competition.
30 CISR Goes International—in India, the Philippines, and Guam
Read how The National Alliance applies flexibility and innovation to meet the needs of its customers and expand the reach of insurance education and professionalism around the world through CISR and INTRO courses.
NEWS
26 Ask Bettie
Bettie fields concerns of National Alliance participants and designation holders during the COVID-19 Pandemic by answering common questions related to online testing and updating.
35 In the Spotlight—Outstanding CSR of the Year State Winners Congratulations to the state winners of the 2020 Outstanding Customer Service Representative of the Year award.
alliance@scic.com • 800-633-2165
TheNationalAlliance.com
Dear Reader:
T
his issue of Resources is dedicated to the backbone of the agency system: the account managers/customer service representatives (servicing staff) of our industry. The agency system is becoming more and more dependent on these individuals in these trying times of the COVID-19 Pandemic, making their jobs and the challenging work they perform ever more important. An added responsibility many servicing staff have suddenly found piled onto to their daily task-load is childcare. Many schools have closed, as have day care centers. Now that the new school year has begun, many servicing staff must find a way to educate their children at home. One of the articles featured in this issue, written by Dustyne Bryant, MBA, CIC, CISR, reviews the challenges of insuring pandemic pods and microschools. Agency owners and managers must be aware that, depending on local regulations, public schools are opening in different stages, and some servicing staff may not want to send their children because of potential exposure to the COVID-19 virus. Therefore, some servicing staff may not only be looking at insuring pandemic pods and microschools, but also forming them. Some individuals are even developing applications that may soon be available across the country to aid in the formation of these pandemic pods or microschools. These apps are currently, or may soon be, available on our smart phones. These agency servicing staff individuals who have formed the backbone of the agency system may also be taking on the additional duties of home educator, in addition to child care. The National Alliance has surveyed servicing staff professionals many times over the years to help determine the direction and content of curricula offered in our courses. Some of the surveys have focused on areas such as workload, compensation, and overall duties. One factor identified as particularly challenging by both commercial and personal lines service staff is striking a balance between their personal and business lives. In the current environment, finding this balance may create much more than the usual amount of stress, and agency owners and managers must be sensitive to this reality. It will be a challenge to maintain productivity and the customary levels of client service so essential to customer retention and E&O prevention. This issue of Resources also contains a variety of articles full of coverage information and professional advice for dealing with the COVID-19 Pandemic. We are confident that this pandemic will come to an end, but it will likely forever change the way agency business is conducted with clients, prospects, and carriers. We are not yet entirely sure how those changes will ultimately evolve, but perhaps time will prove that some of them were indeed beneficial. In the end, remember that account managers and account representatives (servicing staff) form the backbone of the agency, holding it together, and with the right support, that backbone can remain strong, lifting a heavy loads, helping to keep the agency efficient and profitable. Right now these critical staff members are under strain, and it is our hope this issue of Resources will highlight the importance of these individuals, and help to ease some of that strain. Sincerely, William C. Toll, CIC Editor-In-Chief
Bill Toll, CIC, has worked with The National Alliance in several capacities since 1986. In addition to his work with The National Alliance Research Academy and as the new Editor-in-Chief of Resources magazine, he is a National Faculty member and Educational Consultant for both classroom and online courses.
Fall 2020 | RESOURCES 3
EXPERT PERSPECTIVE
Protecting and Insuring
I
Wine Collections
t was wildfire season in California. Fires were raging through the hills, threatening lives and property. One wine lover’s last act before evacuating his home was to throw the contents of his wine cellar into his swimming pool. If the house was about to be destroyed, that didn’t mean the wine had to perish as well, right? Well, as luck had it, the fire skirted his house. Returning home, our foresighted wine collector encountered a sobering sight in the pool. The bottles were safe and sound, and so
4
RESOURCES | Fall 2020
were the labels. The problem was that one had become detached from the other—a pool full of mystery bottles, with limited, if any, ability to tell what bottle contained what wine. As the insurer, what do you do? Was the wine damaged? And, if so, what was the loss of value? This is where Certified Personal Risk Manager (CPRM) courses can have significant value. Regardless of the asset class, the CPRM curriculum underscores the importance of involving experts early in a valuation process.
Valuation criteria and parameters vary depending on the asset, and consultation with a dispassionate expert is always far preferable to a guess-based estimate or the insured’s opinion. But I hate to leave you hanging, so let’s see what became of the pool of mystery wines. A cork seal is sufficiently impervious to protect the contents of a bottle from clean pool water, so the wine remained potable. Being unlabeled, though, the bottles were devoid of commercial value. They also had
By Neil Kaplan, J.D., DipWSET, AAA
greatly diminished usefulness, as a consumer understandably wants to know what is inside the bottle being opened, especially when entertaining. Ultimately, the insurance company declared the wine a total loss, and the insured was able to keep it for salvage value, which wasn’t too bad an outcome. He had his wine—in a way— and an insurance settlement with which to buy pristine replacements. Beyond being a great story, though, this situation highlights some of the issues encountered when dealing with
collectibles. So, let’s delve into what makes wine unique and consider some of the challenges to insuring and valuing it. The first challenge is knowing if a wine is collectible at all, as slight differences in the label can make an enormous difference in the wine’s value. For instance, the Armand Rousseau Gevrey-Chambertin 2016 currently retails for $350 a bottle, while the Armand Rousseau Chambertin 2016 sells for $4,000. What a difference a word makes! Unfortunately, there is no easy way to tell which wines are valuable. Young wines like the Chambertin can be extremely valuable, and old wines might be worthless. Most wines deemed collectible are from France, but not all, and by a long-shot, not everything from France is valuable. As with any collectible asset class, subject matter expertise is required for evaluating wine. Whether or not a wine collection rises to the collectible level, proper storage is critical for preserving its quality and value. As we saw above, underwater storage is not necessarily recommended for wine, but then it is not exactly ideal for stamps or oil paintings either. Better to store wine at 55º, away from light, and with humidity around 75%. But what happens when things go wrong, such as when a temperature control system fails? While inspection of the bottle can reveal some information about the state of a wine, it is often impossible to determine the condition of a wine without sampling it. Opening a bottle to assess wine condition, however, destroys that wine’s value. This complicates condition assessment and underscores the importance of uninterrupted proper storage, as it obviates the need for value-destroying contents sampling. The inspection process begins with noting the appearance of the capsule, cork, and label, as well as the color of the wine. Protruding corks, for instance, and signs that wine has seeped past the cork and out of the bottle provide strong evidence of exposure to excessive heat, which is tremendously harmful to wine. The color of the wine can also provide clues. Wine naturally changes color over time, with whites
becoming golden and reds taking on garnet hues. Such color changes, which can be detected with aid of a high-powered flashlight, may also suggest storage issues if they occur prematurely. If physical appearance is not dispositive, a strategic sampling of potentially damaged wines might be warranted. In order to minimize the loss from opening bottles, a carefully selected range of wines of different styles and degrees of sturdiness would be tasted. If all taste appropriate to their quality and age, then it can create a presumption that the other wines in the cellar are sound as well, and vice versa. If some of the wines are sound and others not, then one looks for patterns to see what styles may have suffered and which ones might have had the structure to weather the adverse circumstances. If each wine in the cellar is assigned to a stylistic category conforming to the wines tasted, then the condition of the sampled wine can be used to draw conclusions about the condition of all of the wines in that category. Once the condition of a wine collection is determined, then the wine must be valued. While there is no state licensing of personal property appraisers, there are three organizations in the US that certify these individuals—the Appraisers Association of America, the American Society of Appraisers, and the International Society of Appraisers. These associations impose stringent requirements for certification and require members to have extensive education, experience, and subject expertise, and are compliant with the Uniform Standards of Professional Appraisal Practice. Choosing an appraiser certified by one of these bodies, for any kind of personal property appraisal, provides the best assurance of proper methodology and ethics. But how is the appraisal done? Using various research tools, the appraiser strives to find current market data for the wine that most closely resembles each bottle being appraised. In some cases, there is data for the same wine from the same vintage— Bingo! But in other situations, there will not be recent or reliable data. Here, the appraiser must find a wine Fall 2020 | RESOURCES 5
EXPERT PERSPECTIVE for which there is relevant data and is as close as possible to the style, quality, age, and condition to the wine being appraised. This could be a different vintage of the same wine, but not always. For instance, if the task is to appraise a bottle of Chateau Ducru Beaucaillou 1945 at marketable cash value, an appraiser will find no recent data. This was such a special vintage, there are no others that could be deemed similar. The 1928, 1929, and 1961 vintages are all of arguably similar quality, but the difference in age is too great, and that would impact value. Rather than compare this 1945 to an older or younger vintage, it would be better to compare it to a similar wine from the same vintage. In this case, there is recent data for the Chateau Leoville Las Cases 1945, a wine from the same village and same level of classification as the Ducru, and so there is our comparable. Taking care of the client, though, involves more than accurately assessing condition and value. We first have to make sure that the wine is actually insured—not always the easiest task. Because wine is often regarded as a consumable and not a valuable asset, many clients don’t volunteer that they own wine. Ask! If you see art, time-
pieces, cars, etc., then inquire about a wine collection. It is very much a factor in this demographic’s lifestyle. However, you may need to overcome the objection that “this is not a wine collection; it’s just wine for drinking.” That may be, but if 500 bottles with an average value of $100 get destroyed in a fire, that’s a $50,000 loss. Hopefully, your client will agree that a collection of this nature is too much to self-insure. Great! You’ve written the rider, making sure the client realizes that any considerable collection is not covered by homeowner’s insurance and might not be covered by an outside storage facility’s insurance, either. Now we need to make sure the wine owner has appropriate protections for home storage and adequate records. Back-ups are critical in the event of a power outage. A generator or battery to power a home cellar’s temperature control system in an emergency can make all the difference between an undamaged and ruined collection. And I can’t say enough about record keeping. While it’s definitely the least enjoyable part of collecting wine, in the event of a physical catastrophe, the bottles might not be intact and able to be inventoried. Current records would alleviate that problem—the swimming pool case being a prime example.
Learn More Earn More Some agencies look with disdain on personal lines business; the average commission per account is low when compared to commercial lines, and the servicing load of each personal lines account can be high. Some agencies look at personal lines as ancillary business necessary to maintain a commercial lines book of business. But, is this really the case? One of the many reasons the The National Alliance created the Certified Personal Risk Manager (CPRM) Program was to combat misconceptions regarding the value of personal lines business. A key to making personal lines business more profitable is to view personal lines from a different perspective. Agencies that do so strive to attract and market themselves to the larger personal lines accounts of affluent individuals. CPRM courses help instruct industry personal lines professionals in effective ways to properly insure and grow personal lines books of business, adding stability and profitability to their agencies. 6
RESOURCES | Fall 2020
Tune in to the Nat Alliance NOW podcast:
Personal Lines Insurance During COVID-19 https://nat-alliance-now-riskinsurance-podcast.simplecast.com/
I find great satisfaction from being a member of the CPRM faculty and sharing my expertise with course participants. I am confident that the concepts I teach, as well as the CPRM designation, can help insurance professionals better serve their personal lines clients while also helping to protect themselves from errors and omissions situations. n About the Author: Neil Kaplan, J.D., DipWSET, AAA Neil Kaplan is the managing partner of Cork Counsel and offers a wide array of services to wine and spirits collectors and the professionals who work with them, including appraisals, insurance inspections, damage assessments, brokerage of collections, private client consultation, cellar management, relocation, as well as wine seminars and tastings. An attorney with over 25 years’ experience in virtually all aspects of the wine business, Neil has earned the Diploma with Merit from the Wine and Spirits Education Trust, is now a candidate for the Master of Wine, and is an Appraisers Association of America certified and USPAPcompliant wine appraiser.
James K. Ruble MEGA Seminars are respected throughout the industry—offering a variety of market-focused specialty, advanced, and high-interest topics.
New Topics
Topics are added year-round. Select any four 4-hour topics to meet your CIC, CRM, CPRM and/or CISR update.
TWO-PART WEBINARS
Each 4-hour topic is coverd in two live, instructor-led, 2-hour webinars.
HIGH-QUALITY INSTRUCTION
Convenience of a webinar with the spontaneity of a live instructor.
CUSTOMER SERVICE
Are you sure you deliver
Great Customer Service? By LuAnn S. Wooters, CISR, AAI, AAI-M, TRA
I
f you are an account manager in today’s agency, you probably are asking yourself these questions constantly: How do I manage my time? Can I get this all done? How do I stay ahead? How can I best collaborate with my producers, customers, and company personnel? How do I handle clients’ objections effectively? These are all questions I have heard for years from account managers, customer service representatives (CSRs), and others with client services positions. In The National Alliance’s Dynamics of Service Course, we address all of these questions—and many more—in a fun, interactive way. I have been teaching this course for over 15 years, and of all the courses I teach, this is, handsdown, my absolute favorite. I am extremely passionate about customer service, as are the participants who attend the Dynamics of Service Course. But I don’t know of a single agency that doesn’t say they provide great customer service; no agency prides itself providing poor Documented Service CSRs
Renewals
% CL AMs/ CSRs
customer service! So, while the term, “great customer service” is tossed around a lot, what does it really mean when an agency makes this claim? The truth is, servicing standards vary greatly from agency to agency, and some agencies don’t have specific standards, at all. However, the majority of agencies do have specific standards in place, as documented by the data gleaned from a National Alliance Research Academy study, published in the fall of 2019, titled The Pulse of Customer Service. Taken from that study data, the table below displays the percentages of agencies, for both commercial and personal lines account managers and/or CSRs, who do have documented servicing standards, shown by type of workflow: Of course, having standards is one thing. Having the right standards and using them consistently is another. For example, almost anyone can answer the phone by the third ring. Far fewer customer service employees can answer it with a smile in their voice and have the technical and communication skills to help the client in an effective manner. Here % PL AMs/ Standards
81% 71%
Endorsements 79% 74% New business
77%
Cancellations
77% 74%
Claims
67% 64%
Email messages
53%
Phone calls
53%
55%
None (no set standards)
15%
20%
Other 8
RESOURCES | Fall 2020
75%
49%
7% 4%
are just a few example questions to consider in the formulation and/or execution of servicing standards; you can develop others for your agency: • Are we trying to sell what we want the clients to have, or are we asking them what they want and need? • If I am Sally’s client, do I get the same level of service from Sam? • Are we so overwhelmed, struggling to get everything on our desks completed, that we have become complacent and robotic? • How many employees need additional training? As you can see, documented service standards are real, the majority of agencies have them, and the question you must ask is, “Are we really providing great customer service?” The training provided by the Dynamics of Service Course can help an agency’s servicing staff reply with an emphatic “Yes!” But there is much more to this story—in order to deliver great customer service, more than servicing standards are needed. Let’s face it—being an account manager is not always a fun day at the office. As a matter of fact, it might be the most difficult job in the
agency. After all, service personnel must wear a lot of hats. Many agencies focus much of their training on producers, but we know that the account managers and CSRs are the backbone of the agencies. They are the ones interacting with clients every day. It is imperative they are at the top of their games or the agency will lose clients and the customer service personnel will become increasingly frustrated with their jobs. Since agencies statistically do not make money until the client has been with the agency for at least 2.5 years, it is critical to properly develop and train these front-line employees. (Continued)
Fall 2020 | RESOURCES 9
CISR PROGRAM Agency Operations • Commercial Casualty I • Commercial Casualty II • Elements of Risk Management Insuring Commercial Property • Insuring Personal Auto Exposures • Insuring Personal Residential Property Life & Health Essentials • Personal Lines–Miscellaneous
Professional Education for a Thriving Career
Self-Paced Online
Instructor-Led Online
CISR courses are eligible for CE credit and are update options for insurance and risk management professionals interested in emerging marketplace trends.
Register Now!
CUSTOMER SERVICE Dynamics of Service addresses the majority of issues account managers and CSRs face day-to-day. Participants of the course walk away with tools that help them to be more effective in their roles. They gain knowledge, techniques, and skills that make their careers more rewarding, and help them and their agencies be more successful. One of the most valuable components of the course is when we break into small groups and role-play real life objections the participants are faced with on a regular basis. Now, I already know what you’re thinking: “I’m not going to role-play.” But, in reality, it’s only an exercise in practicing what you do every day—and practice makes perfect! For example, we can all agree that overcoming client objections is a big part of the job. Role-playing helps us all to learn how objections provide opportunities to have deeper discussions with our clients. By finding out what the customer’s needs and/or concerns might be before they take their business to another agency may actually prevent that from happening! Even the most hesitant course participants end up enjoying this part of the class, and more importantly, they learn new things to take back to the office. After all, servicing is a skill, and skills can be improved, particularly if you are taught some proven techniques and take the opportunity to learn from your peers. Trust me on this—role-playing is valuable and it’s FUN!
One tool every CSR or account manager needs is the ability to communicate. Sometimes we get to deliver good news, and then at other times, it’s bad news. There are times, for example, when the claims adjuster states that a claim is not covered and you have to tell the client. I have found a powerful aspect of Dynamics of Service training to be teaching participants how to interact with both colleagues and clients in times of both good news and bad. In the course, we practice using a unique tool for these types of interactions, learning to read different personality styles and types, which helps customer service staff to communicate better. Because an important part of communication is listening, Dynamics of Service also emphasizes active listening skills. These skills are crucial in helping agency servicing staff ask better questions, and to periodically check to make sure the client understands what they are saying. The result is two-fold: it boosts understanding of the client’s needs, and that leads to client retention (everyone likes to feel their needs are understood!). I find this to be a truly eye-opening part of the course. But other parts of the course are valuable, as well. Account managers and CSRs who participated in The Pulse of Customer Service study conducted and published by The National Alliance Research Academy identified “deal-
Learn More Earn More Dynamics of Service is a unique course which helps account managers/CSRs with several common problems. In surveys conducted by The National Alliance Research Academy, both commercial and personal lines agency account managers/CSRs indicated that learning how to say “no” to clients or fellow agency workers was a real issue. Some felt that because they could not say “no” in a professional setting, they were overloaded with work and under stress to pursue coverages not actually available to clients. Other account managers and CSRs identified handling difficult clients as a continuing challenge to them. These two issues, in addition to many others, are addressed in the Dynamics of Service curriculum. The course updates your CISR designation and in some states qualifies for update credit.
ing with difficult customers” as an area where they needed help. When I take participants through the part of Dynamics of Service that deals with this specific concern, they gain skills to help diffuse and deflect a tense or awkward exchange. We also practice the skills needed to respond positively to client complaints and objections. We learn how to turn them into opportunities for improved relations, client buy-in, higher customer retention, and increased sales. This is where many participants really feel their confidence increase. If I were to take all of my experience with the material I teach in the Dynamics of Service Course, and compare it to the outcomes of the participants who take the course, in a nutshell, I can say without a doubt it significantly improves the abilities of people working in customer service—whom everyone agrees, are the backbone of the agency. This course delivers the kind of education that helps these essential team members feel even more confident and positive about their contributions— to their clients’ lives, their own professional lives, and to the agency overall. Simply put, it is a win-win occasion for all involved. n About the Author: LuAnn S. Wooters, CISR, AAI, AAI-M, TRA LuAnn Wooters has been in the insurance industry for over 30 years. During this time, she has held multiple agency positions as personal and commercial lines CSR, office manager, personal lines manager, claims manager, small business sales manager, and education specialist. She joined the Independent Insurance Agents of North Carolina (IIANC) as the Vice President of Professional Development in August of 2014. LuAnn now focuses on teaching and sharing her expertise with the industry. Fall 2020 | RESOURCES 11
INNOVATION
What Is the Meaning of This?
Publisher/President & CEO William J. Hold, MBA, CRM, CISR wjhold@scic.com Editor-in-Chief Bill Toll, CIC btoll@scic.com Designers Guy Boccia Jeff Buck Becky Keeling Chuck Lickert Department Editors Dustyne Bryant, MBA, CIC, CISR dbryant@scic.com Paul Martin, CPCU pmartin@scic.com Bob Rogers, CLU, ChFC brogers@scic.com Sarah Warhaftig, J.D., CRM swarhaftig@scic.com Mandy Whorton mwhorton@scic.com Marketing Lead Griselda Castillo Executive Chairman/Content Advisor William T. Hold, Ph.D, CIC, CPCU, CLU Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, TX 78755-2027, 800-633-2165, Fax: 512-349-6194, Internet: TheNationalAlliance.com, email: alliance@scic.com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), Certified School Risk Managers (CSRMs), Certified Personal Risk Managers (CPRMs), and affiliates of The National Alliance Research Academy. Entire contents Copyright © 2020, The National Alliance for Insurance Education & Research. All rights reserved. Material in this publication may not be reproduced in any form without permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by The National Alliance, provided that the following words are included on any copy: “Reproduced from Resources with permission of The National Alliance for Insurance Education & Research.”
Resources is designed to provide accurate and timely information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting, or other professional services. If legal advice or other expertise is required, the services of a competent professional should be sought. The publisher has taken all reasonable steps to verify the accuracy and completeness of information contained in Resources. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in Resources. The National Alliance Standards of Conduct: scic.com/pub/media/docs/Standardsof Conduct.pdf
12
RESOURCES | Fall 2020
Announcing the New Resources Glossary By Research Academy Staff
W
e all agree that communication is important. Communication is particularly important in the business of insurance because we use so many acronyms: CGL, BOP, BAP, WC, and the alphabet soup goes on and on. No wonder we confuse our clients when we talk or write to them and just assume they understand all of the acronyms and insurance terms we throw around. But there is more to this idea of communication; The National Alliance has been in the business of education for more than 50 years. We communicate in classrooms and online every week all over the country and around the world. From the very beginning, insurance education provided by The National Alliance has focused on the definitions of the legal and insurance terms used by insurance professionals. Particularly for those individuals just starting out in the insurance business, learning and understanding the definitions of terms is critical. Words are important, just as knowing what those words mean is important. How else can we understand and apply policy language? To aid understanding as well as communication, The National Alliance is building an online glossary of insurance, financial, and risk management terms for the use of all insurance professionals. It is called the “Resources Glossary,” and is planned to be available in the fourth quarter of this year. Once the Resources Glossary is available,
participants in National Alliance programs will be able to go to The National Alliance’s website at www. scic.com/insurance-glossary and look up definitions for insurance, financial, and risk management terms commonly used in National Alliance courses and in the industry, at large. Additionally, when you use The National Alliance website and let your cursor hover over a term or phrase that you may not know or understand in any document on the website, the definition will appear— if it term is in the glossary. For some of the words in the glossary, a picture or video will also be available to aid in understanding. The glossary will be continually updated and refreshed to stay up with industry changes in definitions and applications. The National Alliance is working on plans to make the Resources Glossary more accessible to insurance and risk management professionals, and it demonstrates The National Alliance’s commitment to assist the insurance and risk management industry with professional development. n
www.scic.com/insurance-glossary
The NEWEST edition of Executive Liability Insurance: Evolving Times, Evolving Exposures, Evolving Insurance, by Dick Clarke, CIC, CPCU, RPLU, is now available! Learn what to look for in policies and what to look out for with exposures. Protect your clients and avoid E&O claims. Executive Liability Insurance Trends– A Conversation with Dick Clarke TUNE IN to hear Paul Martin, CPCU, Commercial Academic Director for The National Alliance, interview author Dick Clarke, CIC, CPCU, RPLU, on why insurance agents and buyers of insurance coverage should be proactively discussing their need for executive liability insurance.
Print and Digital Copies Available. Order Now at NationalAllianceBooks.com
SUCCESS STORY
Josh Kroeger, UACIC—
A Student Success Story
A
fter a 14-year career in professional baseball, Josh has transitioned careers into the risk management and insurance industry. During a recent interview, Josh was asked what lead him to become interested in risk management and insurance. He replied, “Honestly, I sort of fell into it after I decided I wasn’t interested in pursuing a career in banking. I began as finance major at MTSU (Middle Tennessee State University) and decided to change my degree to risk management. I knew that I wanted to be as specific as possible with my focus, in an industry that would continue to remain strong. I never thought I would be working in insurance/risk management.” Josh graduated from MTSU in December 2019 with a degree in risk management and insurance and a minor in business administration. While a student there, Josh also earned his University Associate Certified Insurance Counselor (UACIC) designation. The National 14
RESOURCES | Fall 2020
Alliance Research Academy designed this unique University Associate Program to support educational institutions in their efforts to attract college students into the risk management and insurance industry. Josh says that he enjoys the aspects of problem solving and weighing the risks associated with different types of businesses, and that is what excites him most about
the industry. He is surprised by how much there is to know about insurance and how little people know about it. Josh says that he enjoys consulting with people on the topic of insurance and guiding them through the process. Now that he has graduated, he plans to go into the sales and production side of the business. In the year before he graduated, he held two internship positions in sales and he currently works in a marketing/sales position. Josh believes the best benefit an employer can offer to a person starting out in a marketing/sales is time and support. He indicated how difficult it is to just hit the ground running in a sales position, particularly if that person has not had any prior experience with sales or insurance. Josh plans to continue his pursuit of professional education by earning his CIC designation. He takes pride in knowing the facts and being knowledgeable, and he believes knowledge can be a key component in sales success. n
The Nat Alliance NOW Podcast Series r provides risk and insurance professionals f with rich, nuanced conversations that deepen learning and promote the successful completion of National Alliance programs. Monthly episodes feature active industry experts and guest hosts who explore trends and tackle challenging course content.
Listen. List Lis L te n . L Learn. ea rn. Succeed. Su S ucc cce eed ed.
Listen L Lis ten at
Perrsonal Lines Personal IInsurance Insu urance During D i COV VID-19 COVID-19
Difference Maker Explains Why CICs Stand Out In the Industry
Learning i th the A Artt off IInsurance Sales S l
Insurance Producer Prospecting Post-Pandemic
Remote Working Technologies for Insurance Professio Professionals
The National Alliance for Insurance Education & Research Offers You Support With Online Learning Options
TheNationalAlliance.com i i
COMMERCIAL COVERAGES
By Paul W. Burkett, J.D., CPCU, CIC, CRM, ARM, ALCM
A
cross the country, agencies and their clients are concerned about coverage under standard Business Income and Extra Expense forms for income lost due to the COVID-19 Pandemic. The situation has been widely discussed in insurance trade journals, and many opinions are currently circulating among individuals both inside and outside of the insurance community and risk management world. In reviewing the current situation, it is best to begin with some historic reference. Pandemics and epidemics are certainly not new to us; we have experienced many in recorded human history. In relatively recent memory alone, we have had the 2009 H1N1 Pandemic, the SARS (Severe Acute Respiratory Syndrome) in 2003, the 1997 Avian Influenza (H5N1) Epidemic, and the Spanish Flu Pandemic of 1918 (caused by the H1N1 virus). Pandemics are generally thought to be world-wide and epidemics more regional in nature. The 1997 Avian Influenza inflected poultry in several regions of the
16
RESOURCES | Fall 2020
world and then spread to humans. So, while the COVID-19 Pandemic is not the first encountered by humans, the economic effects have been unprecedented and have generated many questions regarding Business Income coverage. The genesis of the economic effects was borne of the response to the COVID-19 Pandemic. Thought to have originated in Wuhan, China, there was no vaccine for COVID-19, and the normal processes employed by the medical community to treat similar pathogens were not available or effective in stemming the virus. Following China’s model, the US and other countries shut down their economies in an attempt to reduce transmission of the virus. Countries around the world closed their borders and restricted travel. Businesses were forced to close and incomes plummeted as people were told to avoid contact with others and shelter in place. While populations were locked down in the US as well as other countries, medical professionals stud-
ied the virus and found what they suspect are different strains of this virus—different strains which may attack different parts of the human body. Some may also impact people of different ages more severely—particularly, individuals with certain medical conditions—placing them at greater risk. Governmental and medical entities have been instructing people through the media about how they should protect themselves by social distancing, staying in their homes, and wearing protective devices like face masks and shields. Medical professionals have been working, and continue to work diligently, to help those who contract the virus to recover. Currently, we continue to have increases in the COVID-19 infection rate in many parts of the US. We can anticipate that the glut
of COVID-related claims is going to continue. Many agency clients are largely concerned about what they identify as Business Interruption claims, but in actuality, these are really Business Income claims. Since 2006, the insurance industry has had virus exclusions, communicable disease exclusions, pollution exclusions, and ordinance and law exclusions that claims representatives evaluate and adjust according to the contract language. For this reason, agency customer service associates need to become more familiar with the language of the standardized coverage forms. The definition of
“virus” falls into broad categories, but that definition basically relates back to the definition of a “pollutant”— the same one used across practically every coverage form, including property. In the past, a pollutant has not referenced mold, fungus, virus, bacteria, and other microbiological life forms or materials. Therefore, we need to focus on the specific definition of pollutant: an irritant or contaminant, whether in solid, liquid, or gaseous form, including— when they can be regarded as an irritant or contaminant—smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste (as defined by IRMI.com). In addition to reviewing the definition of a pollutant, there are two major elements agency customer service associates must consider. The first element is what the coverage form states about claims reporting, and the second is what their agency or wholesaler
contract states about claims reporting. These two elements are the overlays that dictate how agency customer service associates will handle any claim—particularly those regarding viruses as reported by their clients. Agency customer service associates must also make sure their clients are aware of what is required of them to fulfill the conditions of their insurance contracts: whether related to property, third-party casualty, workers’ compensation, or some other form of coverage, claims must be reported in a timely manner. Likewise, any line of coverage an agency customer service associate or other staff member believes may have triggered coverage for COVID-19 related events must also, like any other claim, be reported in a timely manner. Because agency customer service associates often form trusted business relationships with their clients, it is significantly important those associates not render a judgement or opinion as to the existence of coverage when taking claims reports. This action will help avoid legal action against the agency. The only coverage judgement or opinion with any authority is that of the insurance company’s. Agencies understand that the contract of insurance is between their client and the insurance company. The insurance agency and its staff are not a party to the contract and have no duty to investigate claims. On the other hand, insurance companies are required to do adequate investigations to determine whether or not coverage will be provided. It is likely that insurance compa-
nies will continue to deny claims, stating a pollution exclusion, virus exclusion, an exclusion for ordinance or law, or an exclusion for pandemic. While agency customer service associates need to become more familiar with the language of the standardized coverage forms, they are not responsible for the contract language. There is a distinct difference between a Business Income claim and a Business Interruption claim that agency customer service associates and their agencies need to consider. From the point of view of the agency client, everything that interrupts their business is Business Interruption, even though the standardized coverage forms clearly identify conditions that fall under Business Income or Time Element. Business Interruption applies broader coverage, but Busi-
ness Income applies a set of definitions and specific methodology for calculation. Agencies and their clients can anticipate coverage arguments to continue for years revolving around several coverage areas, such as contract language ambiguity and reasonable expectation of coverage, to name only two. Since 2006, there has been a virus exclusion, but obviously there is no way to know if every coverage form has the exclusion. Undoubtedly, there will also be arguments under the Causes of Loss form for Concurrent Causation, as well as governmental action under Civil Authority, and other arguments under Civil Commotion. To complicate matters, there are regulator issues to be examined. The National Association of Insurance Commissioners (NAIC) and state insurance commissioners, as well as regulators,
Extra Expen se
Busi ne Inco ss me
Fall 2020 | RESOURCES 17
COMMERCIAL COVERAGES
have all issued statements. A key pandemic concern of insurance commissioners is insurance company solvency. In addition, they are concerned about legitimate claims outside of the COVID-19 Pandemic being set aside, while the majority of adjusting resources are consumed by pandemic claims. Conversely, there are some state legislators who want to pass legislation which would require Business Income coverage to apply retroactively, no matter what the exclusions, limitations, and conditions of the insurance contract clearly state. What they are trying to accomplish boils down to a circumvention of Article 1 of the United States Constitution, which states that the right to construct private contracts exists, and that there cannot be legislation to interfere with that right. Indeed, this has added additional complexity to the adjustment of Business Income claims. Bear in mind, however, these are
standardized coverage forms which typically speak for themselves and will likely be interpreted that way by both the insurance companies and the courts. In the end, the claims representatives will pay claims that are legitimately covered and deny claims that are not. As agency customer service associates look to the future to put insurance coverages in place, they should work with their clients to help them understand the standardized Business Income coverage forms being presented by the insurance company. First, all insurance contracts have what is called a “condition precedent,” which means that certain elements must be in place to provide coverage. One main requirement for Business Income coverage to apply is that you must have a direct physical loss. This depends on the phrasing and the historical precedent of what is a direct physical loss. There must be demonstrable physical alteration to the property. The fear of
loss due to potential contamination is not sufficient; covered damage to property is the key to coverage under Business Income, and there must be a covered cause of loss without an exclusion. Physical damage to tangible property also triggers the limited time-period coverage provided under the additional coverage—Civil Authority—for most standardized coverage forms. It is likely that in coming months or years, the federal government will take action to create a pandemic endorsement to act as a backstop for businesses. Customer service associates and their agencies must understand that a reasonable expectation of coverage typically is not sufficient. Misconceptions can revolve around the names of coverage: Business Interruption versus Business Income with Extra Expense. In the future, insurance companies may offer limited pandemic coverage or modified civil authority coverage—both of which must be carefully reviewed. The pollution exclu-
sion definition may undergo further modification, with the addition of fungi, mold, bacteria, viruses, and/or microbial matter, to clarify that coverage does not apply. Clearly, the human population of the world will continue to have epidemics and pandemics; we are susceptible to such viruses. Going forward, agencies and their customer service associates will need to continue to identify not only potential virus exposures, but also help their clients plan for the future. As with many areas of insurance, customer service associates and their agencies must make sure their clients have a complete understanding of the risk transfer initiatives they put in place. Where contracts of insurance are concerned, wishing or assuming an exposure to be covered when the insurance contract language clearly states that it is not covered, does not work. Our world is always changing, but some things, like viruses, have been with us since the beginning of time, and will continue to be with us.
Learn More Earn More No one disputes our world is constantly changing; now it is the COVID-19 Pandemic which represents the most recent challenge. The Pandemic has dramatically changed most of our lives, ranging from a starkly altered national economy to the loss of loved ones. The insurance industry, like many others, has also been impacted. For over 50 years, The National Alliance has responded to the changes brought about by trends, crises, and situations allowing insurance professionals to stay up-to-date with changes in coverage and business methodologies. The combination of CIC, CRM, CPRM, and CSRM courses, along with Ruble Seminars and CISR courses, in addition to many other offerings, provide a valuable array of educational resources to help keep insurance professionals current. 18
RESOURCES | Fall 2020
About the Author: Paul W. Burkett, J.D., CPCU, CIC, CRM, ARM, ALCM Paul Burkett is the President and CEO of Snoaspen Insurance Group, Inc., which specializes in risk management consulting, insurance teaching, and expert witness services for insurance bad faith and agents’ E&O cases. Paul began his career as a Loss Control Representative for SAFECO Insurance Company after serving as an Officer in the United States Air Force. Paul is a National Faculty member for The National Alliance and a former Board of Governors member for the Society of Certified Insurance Counselors.
3
DYNAMICS SERIES
ONLINE DYNAMICS OF SELLING The Online Dynamics of Selling Virtual Classroom guides producers through a proven,
insurance-specific sales process that can help your confidence and closing ratios soar. Taught by sales masters, this highly interactive 3-day course will help you improve your communication and negotiation skills, develop solid prospects, and overcome client objections without leaving your home or office!
PERSONAL MANAGEMENT
The Art of Time Management Establishing Boundaries When You Don’t Have Time By Dustyne Bryant, MBA, CIC, CISR
I
t’s time to focus. You have a million things to do today. You came to work with a plan of action and are dead set on leaving the office feeling great about the work you produced and how much you accomplished. **Ring**Ring** Sigh… another day of distractions—so many things to do and not enough
20
RESOURCES | Fall 2020
time to do them. URGGGGH, frustration! I have just recently emerged from the daily grind of agency life. For the full duration of my career in the insurance industry, I have been a team member of an independent agency focused intently on providing the best service to, not only my clients, but also my carriers, producers, team mates, and managers. I offer the best of myself to anyone who meets me— but that leaves me with very little time to ensure that I am enjoying my career and actually performing at my best. Account managers and customer service representatives who work in independent agencies or brokerages have to be the best of the best! We must know every market we operate within and know which carrier is competitive among every type of risk known to man. We must balance carrier production requirements with offering what is best for the client (“I’m sorry Mr. Carrier Rep, your rates are wacky!”). Our producers think that if they bring us a piece of business—and I mean any piece of business—it can be written (“You want me to write what?!”). Most importantly, we must ensure that
every client feels like they are our only client and that there is nothing more important than re-marketing their account over a 2% premium increase. And, when your manager walks into your office and says, “Do you have a minute?” you grab your pen and paper and smile with certainty, because your day is about to get even better. All of these tasks require time. They all require attention. They all require the best of you, and they all could suffer (yes, I said suffer) the response of “No” in one fashion or another. In The National Alliance Research Academy’s study, The Pulse of Customer Service: A Profile of Insurance Industry Customer Service Personnel, research found that a high percentage of account managers/customer service representatives indicated that the business skills they’d most like to improve were how to say “no” and how to deal with stress. Both of those skills correlate with the identification of time management being among the most frustrating aspects of their jobs. Raise your hand if you agree! Ok, you can ALL put your hands down now. I SEE you! Why is it so hard to say “no”? Why, when you want to say “no” or “I can’t” or “I’m tapped,” even once, do you find that you’ve lost your voice? Internally, you are already shuffling your time commitments around in your head and placing this person who is standing before you at the front of the line. It is in the nature of account managers and customer service representatives to SERVICE and MANAGE. Hello—it is in the position’s job title! But we have to know and communicate our limits, or we will be bound by our limits. What does that mean? When we fail to set boundaries by not let-
ting others know what are our limits and when those limits have been reached, we will forever be plagued by workplace stress and the constant battle to manage our time. So, let’s figure this out. Understand how to say “no” the right way. Make sure you actually want or need to say “no.” It is possible that what is being offered or asked of you may actually be an opportunity and something worth the extra time and effort. However, if it is not, or if you simply do not have the time to commit, be honest with what is behind your “no.” Hold firm to your position and listen intently to any rebuttal that comes your way, as this may change your response. Offer a solution with your “no.” What did Mary Poppins say? “A spoonful of sugar makes the medicine go down?” Go ahead and sing it—I’ll wait for you. In our profession, the proverbial “sugar” is a solution! If the request can be done by another team member, then lift that team member up and promote their ability to be the right person for the task. The very best teams are those that are complementary of one another. Finally, send the requestor on their way with this newly found solution and a lovely compliment. “Thank you for thinking of me.” “I’m honored you asked.” “Thank you for brining it to my attention.” “Thank you so much for reading your policy—not many of my clients do that.” If they feel good about themselves on the way out your door, then you were the right person to come to, after all. Delegate. What’s that you say? You have no one to delegate to? Oh yes, yes you do. You have carrier reps, you have carrier customer service staff, you have underwriters, and you have your producer or manager who gave you the task to begin with. Delegation does not necessarily mean to assign someone else the task. Well, by definition it does, but by concept, delegation simply means you are
enlisting someone else’s help to help you. Here’s an example: let’s say one of my “other duties as assigned” (we all have them) is picking up the mail from the post office, and a producer comes in saying that he needs a market proposal, ASAP. “Sure thing—would you mind picking up the mail so I can get that done for you?” Alternatively, has your carrier rep been chomping at the bit for new production from you? I’ve not met one carrier rep who wouldn’t help with a few quotes here and there, so get them involved. Know when to ask for help, and do it with confidence! You don’t have to be drowning in work before you can ask for help, so don’t let it get to that point. Asking for help can also be like collaborating or seeking mentorship. Remember how I pointed out earlier that when you say “no” you should offer a solution? You can ask for something to be taken off your plate, or better yet, you can seek help in prioritizing your commitments. Laying out tasks or time commitments for others to help you organize provides proof that you really do have a lot to do, and oftentimes, others will step up to help without you having to ask. Be open to suggestions at this stage, because a “that’s not how I do it” mentality is only going to be a roadblock for you.
Commendably, you want to be the best at what you do and produce your highest quality work in the most efficient way possible. If, as an account manager or customer service representative, you will put into play the three strategies I’ve outlined above, you may actually find that others’ respect of you and your time will follow. Empower others to support you! n About the Author: Dustyne Bryant, MBA, CIC, CISR Dustyne is the Personal Lines Academic Director at The National Alliance and a self-professed and colleaguebacked wholehearted personal lines insurance geek. Supported by multiple degrees and designations over the course of a decade and more, her thirst for knowledge is never ending and ever growing. Her passion for educating others in personal lines insurance is even greater. She is an advocate of permanency for children in foster care and relishes all the joys of being a soccer mom, minus the minivan.
Learn More Earn More Managing an insurance agency can be a daunting task, and it is even more daunting under the conditions of the COVID-19 Pandemic. Studies conducted by The National Alliance Research Academy have developed valuable agency data that has assisted agency owners, managers, and supervisors in managing agencies. Some of the most current results of these studies are available in Growth and Performance Standards (GPS) and The Pulse of Customer Service. Both of these studies are available in The National Alliance book store at www.scic.com. Make managing your agency less daunting now.
Fall 2020 | RESOURCES 21
COVERAGEINSIGHT INSIGHT COVERAGE
Homeowners’ Endorsements— The Details Make the Difference By Jerry Kennedy, CIC
P
roperly covering an insured’s home is no simple task. Often, when a client is buying a new home, they’re too busy to take the time to do a thorough review of their homeowners’ coverage. It can be up to the customer service representative (CSR) or account manager, when they’re reviewing a policy renewal or making changes requested by the insured, to point out things that may not be properly covered and to endorse the policy with the coverage needed. The National Alliance offers two William T. Hold Seminars that focus on homeowners’ insurance and equip CSRs and other agency staff with a better understanding of what’s covered and what’s not. They provide current information on changes in policy forms and coverages. And the instructors provide a
22
RESOURCES | Fall 2020
wealth of real-life examples of the loss exposures faced by homeowner clients. Good customer service isn’t something that’s “once and done.” It’s not enough to have a template of standard endorsements that should be included on a new policy. For example, most agencies will include one of the following endorsements on every new homeowners’ policy: • Additional Limits of Liability for Coverages A, B, C and D (HO 04 11 05 11) • Specified Additional Amount of Insurance for Coverage A – Dwelling (HO 04 05 11) These endorsements provide additional coverage to replace the home if the dwelling limit isn’t enough— often an additional 50% of what Coverage A provides. This additional
dwelling coverage is almost always needed in the event of a total loss. What insureds don’t realize is that if they make improvements to the home that increases the dwelling’s rebuilding cost and fail to notify their insurer, all of that additional coverage provided by the endorsement will be lost. The CSR who knows the importance of asking about home upgrades when conducting a renewal review can help the insured complete the updated replacement cost estimate needed to keep the additional coverage in effect. The Homeowners’ Policy also has a number of endorsements available designed to provide additional coverage for business property and activities. But all of them have limitations of which an untrained CSR may not be aware of. Here are a couple of examples:
• Increased Limits on Business Property (HO 04 12 05 11)—This endorsement can be used to increase the standard limitation of $2,500 for personal property used for business purposes, up to a maximum of $10,000. Unfortunately, the additional $7,500 in coverage isn’t provided for property in storage, property that’s for sale, or any property of a business that’s being conducted at the home. • Permitted Incidental Occupancies (HO 04 42 10 00)—This endorsement is designed to cover home office exposures and will cover business furnishings, supplies, and equipment in the insured’s home. However, there’s no coverage for other business property, including any retail inventory. When CSRs are aware of these types of limitations, they can recom
mend other policies, including commercial insurance, that will provide the needed coverage. Often, homeowners’ endorsements can have very similar names, yet have critical differences in the coverage they provide. For example, a CSR could use one of the following endorsements to provide coverage for an insured’s expensive jewelry: Scheduled Personal Property Endorsement (HO 04 61 05 11) or Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) (HO 04 60 05 11). Either would protect the scheduled jewelry against almost any type of loss or damage. But the HO 04 61 form provides that the insurer is not obligated to pay more than the cost to replace the property. A ring scheduled for $20,000 based on a jeweler’s insurance valuation might be replaceable by an insurer
for as little as $10,000, limiting the loss payment to potentially half of the limit for which the ring is insured. In order for an insured to collect the full, scheduled retail value of the ring, the agency would need to use the HO 04 60 endorsement, which would pay the full “agreed” value in the event of loss. Coverage can also vary dramatically between endorsements with different edition dates. For example, the most recent version of Supplemental Loss Assessment Coverage is the 2011 endorsement (HO 04 35 05 11). Like earlier editions of the endorsement, it is used to increase the coverage for property or liability loss assessments against a homeowner by their Homeowners Association (HOA) from the $1,000 that’s included automatically, to a maximum of $50,000. But only the recent edition provides coverage Fall 2020 | RESOURCES 23
COVERAGEINSIGHT INSIGHT COVERAGE for loss assessments made against a homeowner that are due to the HOA’s property insurance having a large deductible. This is also an issue for condominium owners—and is another topic covered in the William T. Hold Seminars. One of the biggest benefits of these seminars is that they help agency staff understand the changing exposures clients face. For example, residential building codes have changed dramatically in recent years. New homes must meet all kinds of new construction standards for wind-resistant roofing, earthquake resistance, as well as electrical and plumbing safety. One state now requires residential fire sprinkler systems, as well as solar panels, on all new homes. Whenever a home suffers substantial damage, it may have to be modified to comply with all of the current building codes. And to do so, in some cases, undamaged portions of the home may have to be demolished, disposed of, and rebuilt. All homes may need more than the 10% of Coverage A – Dwelling that’s provided automatically in the policy. Ordinance or Law Increased Amount of Coverage (HO 04 77 10 00) should be recommended at a minimum of 50% of Coverage A. In an industry that’s always changing, staying current is critically important. William T. Hold Seminars provide CSRs with the knowledge they need about the latest
policy changes. Here are two recent examples: ISO introduced a mandatory countrywide endorsement to their Homeowners’ program in 2015, titled Residence Premises Definition Endorsement (HO 06 48 10 15). The endorsement changes the definition of the insured’s “residence premises” to be one where the policyholder must reside at the beginning of the policy period. This clarification was in response to a number of court cases where insurers had successfully denied claims for homes that weren’t “resided in” by the owner at the time of loss. While the clarification is helpful, problems remain for homes that owners buy and don’t move into immediately, or homes that the insured moved out of prior to the policy renewal. For homes where occupancy is delayed, ISO has introduced the Broadened Residence Premises Definition Endorsement (HO 06 49 10 15) to provide coverage throughout the delay. Another recent countrywide change is ISO’s response to homesharing services like AirBnB—the Home-Sharing Host Activities Amendatory Endorsement (HO 06 53 02 17). The endorsement limits or removes coverage for other structures that are being “shared,” as well as any other property that is being used in a part of the home-shared residence. Exclusions for home-sharing are also added to Personal Liability coverage, including any Personal
Learn More Earn More Earning the CISR designation is a challenge recognized throughout the insurance industry as a sign of accomplishment. Some CISRs may not be aware of all the options they have for updating their designations and earning CE credit at the same time. Of course, among those ways is by attending a CISR course, but another way is by attending William T. Hold Seminars, which offer topics that expand and support the CISR curricula. William T. CISR PROGRAM Hold Seminars dig into specific insurance areas, covering more than forty subjects Professional Education in commercial and personal lines, life and for a Thriving Career health, risk management, and other specialty topics. Visit the National Alliance home page at www.scic.com to get the details and advance your career. Agency Operations • Commercial Casualty I • Commercial Casualty II • Elements of Risk Management
Insuring Commercial Property • Insuring Personal Auto Exposures • Insuring Personal Residential Property Life & Health Essentials • Personal Lines–Miscellaneous
Self-Paced Online
Instructor-Led Online
CISR courses are eligible for CE credit and are update options for insurance and risk management professionals interested in emerging marketplace trends.
Learn More!
24
RESOURCES | Fall 2020
Injury coverage that is endorsed. The endorsement defines “home-sharing activities” very broadly, potentially including any rental arranged and paid for on a website, app, or similar electronic means. This could remove coverage for rental exposures previously covered by the policy, including rental of other parts of a multi-family home. Some of the coverage lost can be added back by using the Broadened Home-Sharing Host Activities Coverage Endorsement (HO 06 63 02 17). Keep in mind, William T. Hold Seminars provide this same kind of practical, current, coverage information for many areas of personal lines, as well as commercial lines. These seminars expand product knowledge for participants and will provide continuing education credit as well as update credit for the CISR and CSRM designations—yet another way The National Alliance delivers the industry knowledge critical to career success. n About the Author: Jerry L. Kennedy, CIC Jerry owns and manages an agency in Grand Coulee, Washington. He has long been an advocate of professional continuing education and is a National Faculty member and Educational Consultant for The National Alliance. Active in the industry, Jerry served on the technical committee of the Independent Agents of Washington and chaired the Far West Agents conference, a technical forum with Insurance Services Office. He currently serves as faculty for IIAA’s Virtual University. Jerry was honored by the PIA of Washington/Alaska as “Agent of the Year” in 1994 and served as President of the Association in 1997–1998.
Keep Your Fingers on The Pulse of Customer Service! What’s new in
The Pulse?
NEW! Read an overview and statistical information compiled from essays submited by state and national winners of the 2017 Outstanding CSR of the Year Award competition. Improve job satisfaction, as well as Let the benchmarks, trendlines, and differences between CL and PL personnel help your agency gain insight into the personnel who responders of the agency.
$ 55
$
45
Paperback
+ shipping & handling
eBook
Service personnel can use the publication to compare their compensation, servicing volume, and responsibilities with their peers from across the country. Chart a future course with checklists, job descriptions, and career paths.
Visit NationalAllianceBooks.com to order this important agency book now!
Do you have a question to “Ask Bettie”? Bettie Duff, Senior VP & Corporate Secretary, has been with us over 40 years and is the person to contact for information on just about anything related to operations and procedures. Email your questions to bduff@scic.com. Bettie J. Duff Senior Vice President/Corporate Secretary The National Alliance for Insurance Education & Research
Dear Bettie:
I have been considering attending an online CIC course to complete my designation, but I don’t understand how the proctored exam is administered. Would you clarify that for me?
—Chuck Pyron, CIC, CPRM
Hello Chuck, I am delighted you are considering the online format, especially with COVID-19 disrupting our classroom courses. Many individuals are grateful to have the opportunity to complete their designations online in lieu of waiting for classroom courses to resume. Exams for online instructor-led courses become available the week after the course concludes. Participants are given a three-day window within which to schedule their exams. Your exam will require you to have a proctor present—either in-person, or through an online proctoring service. If you have access to a webcam, you have the option to be proctored online through monitoredu.com, our digital proctoring partner. You can register in advance for this service. Simply visit scicproctor.com and click on “Pay Now” to pay the $15 fee. Again, the exam window is open for three days, and you may choose the day and time that best fit your schedule. You also have the option to be proctored inperson. Due to shelter-in-place restrictions, we have temporarily relaxed our requirements for who can serve as a proctor. You may ask any adult over the age of 18 to serve as your proctor. This includes family members who reside with you—children, spouses, parents, etc. Send an email to onlineclassroom@scic.com with your name, and your proctor’s name and email address, as well as their relationship to you. Your proctor will be sent detailed instructions
26
RESOURCES | Fall 2020
on the Friday prior to your exam period, including any required PINs for exam access or accommodations. Chuck, I hope this provides the information you need; however, if you have additional questions please email us at alliance@scic.com or call 800-633-2165.
—Bettie
Dear Bettie:
When attending an online course, do I need to take an exam to fulfill my update requirement? —Sally Ringer, CISR
Dear Sally, With COVID-19 disrupting our classroom courses, many designees who haven’t previously taken online courses and are now selecting online options are asking the same question. The answer is, you are not required to take an exam to get update credit when completing an online webinar/instructor-led course. Many opportunities to attend CIC, CRM, CPRM, and CISR courses in the online webinar/instructor-led format remain in 2020. I encourage you to visit our website at www.scic.com for the most current course schedule. CISR courses, William T. Hold Seminars, and CSRM courses offered in our other online format— self-paced—require completion of the self-quizzes and the review test to obtain designation update credit. And, while no final exam is required for selfpaced CISR courses or William T. Hold Seminars, the final exam is required for self-paced CSRM courses to satisfy the CSRM update requirement. Thank you, Sally, for contacting us, and I hope you enjoy your online learning experience!
—Bettie
For 30 YEARS, this publication has F h helped insurance agencies chart a course for improved GROWTH, c PROFITABILITY, and PRODUCTIVITY. P Compare your agency to industry C n norms and comparable agencies with rrespect to income and expense averages, productivity measures, and a balance sheet ratios. Pinpoint where b ssignificant variances occur and focus y your efforts where improvements can make the greatest difference. m 1192 pages + companion files for comparing y your agency to peer agencies: income expense averages, productivity measures e and balance sheet. a Recommended reading for the R C CIC Agency Management Course
Print and Digital Copies Available. Order Now at NationalAllianceBooks.com
PERSONAL DEVELOPMENT
Designations—
Much More Than Just Letters After Your Name By Ashley Fitzsimmons, CISR
W
hat do you do when you don’t feel well and you just can’t seem to get better? You go to a doctor. How about when you have a toothache? You go to the dentist. Need to shed a few pounds? Hire a personal trainer. Uh oh— it’s tax time again. Better call your accountant. What do all the above have in common? Of course,
Learn More Earn More Over the last 50 years, The National Alliance has grown to be the leader in insurance and risk management education. The various designation programs offered by The National Alliance have been completed by thousands and thousands of insurance professionals. Each designation is a sign of knowledge, competence, and professionalism. Agencies heading to success in the future know the importance of product, risk management and business management knowledge. Through innovation and creativeness, The National Alliance boosts the careers of insurance professionals in all parts of the insurance industry. Put yourself on the track to success by registering for your next National Alliance course today. 28
RESOURCES | Fall 2020
they’re all people we trust to help us when something is wrong. But even more simple than that—you’ll find letters after each of their names: MD, DMD, RD, CPA—letters that only take a few keystrokes to type, but tell a much greater story. A story of hard work. Professionalism. Dedication. Knowledge. Years of learning—not only to earn the titles, but also continued learning to maintain them. Those letters give many of us a sense of comfort knowing that we’re in the hands of someone who has our best interests at heart and will know exactly what they need to do to help us. So why don’t we see more insurance agents shouting their designations from the roof tops? Obviously, because shouting from a roof top is a major liability. (That was a trick question.) Now, I realize we aren’t doctors, or nutritionists, or therapists (although we often feel like we are). But what we do is important—
and sometimes, even life changing. We protect people. We put their lives back together when things go wrong. Knowledge and expertise are incredibly important in this industry. You worked hard for that designation. It’s time to use it to your advantage. You can use your designation for far more than just your email signature or on your business card, and I’m here to tell you how. Use it to earn trust. “Hi. Can I please speak to the agency owner?” How many times have you answered the phone and heard that question? It’s frustrating for both you AND the agency owner, because what the client doesn’t know is how heavily the agency owner relies on his/her staff members for assistance answering clients’ questions. Because owners aren’t processing changes or quoting daily, many of those questions typically come back to you. This truly makes customer service staff the cornerstone of an agency. Next time this happens, let the client know that you’re not only a licensed agent, but have furthered your knowledge with the CISR designation (or CIC, or
whichever you’ve earned), and that you’d be more than happy to help them—and that you’re qualified to help! In my experience, almost every time, they say they didn’t know anyone else could help them! It’s a winwin for everyone! Use it as a social media tool to educate clients. I’ve been “in” the insurance industry for ten years now and “around” the industry my entire life. And yet, there are STILL designations after people’s names that I have to Google. I, Ashley Fitzsimmons—the Beyoncé of Insurance—have to Google designations! Do you think your clients have any idea what the alphabet soup after our names mean? No! So, let’s make it fun. Highlight on social media individuals in your agency who have earned designations. Post their photos, explain what type of designation they have, how they earned it, and a few fun facts about them. Highlight their hard work, their expertise, and the fact that their favorite childhood food was macaroni with ketchup and butter. (Don’t judge me until you’ve tried it.) Do you have a staff member who has multiple designations? You have content for days! Each week, pick a new designation to post about. In fact—if you can, have that person hop on a quick 30-second video and talk about it—even better! It’s going to finally help you check that “post more to social media” item off your list AND make your employees feel like rock stars. Just like I mentioned above, letters after a name provide an unspoken comfort. So imagine how much more comforted people will
feel when they understand everything that went into earning them! Use it to set your agency apart. Let’s say you know someone you’re quoting is also shopping around for other quotes. Inevitably, they start asking why they should go with you instead of “the other guy.” You don’t panic. You’ve got this. You’ve got your designation. That’s what sets your agency apart. The designation you have earned makes you an expert in your field. The knowledge you have worked so hard for helps you better protect the individuals that become your clients. Not only that, you continue your learning each year to keep your designation up-to-date. My grandfather once said to me, “Ashley, you’ll never know every single thing there is to know in this industry. And when you start to feel like you might, you’ll find that everything has changed.” That’s one of the things I love about this industry— you’re a lifelong learner. Maintaining a designation shows your dedication to knowledge. You’re going above and beyond just taking a course to get your 24 CE hours in—you’re taking a course because you truly want to learn, so you can better educate and protect your clients. Let them know this. Use it to promote a culture of learning within your agency. A designation is not something you HAVE to get—it’s a choice. If you have an employee who chooses to do the extra work, once they’ve
passed that final exam to earn their CISR, or CIC, etc., it’s the perfect time to celebrate them. Maybe you have a little party in the office. Maybe you highlight them on social media, or maybe you even put a little blurb about them in the local newspaper. Regardless of what you choose, you have the perfect opportunity to not only make them feel like a rockstar, but to encourage others within the agency to take on the designation challenge as well. A little positive reinforcement for taking an interest in furthering education can go a long way in your agency—not to mention lead to less E&O exposures, increased written premium, and increased retention, to name just a few of the positive benefits.
LWIP (Let’s wrap it up.) (The above again emphasizes the importance of explaining to people what your designation means and stands for! Otherwise, they may think you just made it up—kind of like me making up LWIP!) Obtaining a designation shows you truly care about this industry. It shows you care about being the best agent possible for your clients. And it shows your dedication to being a lifelong learner. It’s something to be incredibly proud of. You just read four different ways you can use your designation to your advantage. What are you waiting for? Give your clients another reason to be proud they call you their agent! n
About the Author: Ashley Fitzsimmons, CISR A millennial in a risky business, affectionately referred to as “The Beyoncé of Insurance”—it’s no secret that Ashley Fitzsimmons is an insurance nerd with a passion for this industry. She’s been in your shoes. After nearly a decade as the fourth generation in an independent agency near Scranton, PA, she’s taken a little detour to join the team at Ohio Insurance Agents in Columbus. Her love for her clients helped secure her the National Outstanding CSR of the Year award in 2018. She was even able to turn her misadventures in online dating into writing policies. In traveling to different events and meeting hundreds of agents, she has realized she can make an even bigger impact by helping independent agents thrive all over the country.
Fall 2020 | RESOURCES 29 29
ACADEMIC EXPANSION
CISR Goes International— in India, the Philippines, and Guam By Research Academy Staff
I
t was the middle of the night; the clocks on the wall were approaching 1:00 in the morning. The crowd of people were gathering around—excitement filled the air. What was the big event? A CISR conferment ceremony. Where on earth was there a CISR conferment occurring at 1:00am? Well, in India, of course. Who was being conferred? Employees of Willis Towers Watson in Mumbai. President and Cofounder William T. Hold, Ph.D. CIC, CPCU, CLU, and CEO William J. Hold, CRM, CISR, of The National Alliance for Insurance Education & Research (The National Alliance) were on hand to conduct the prestigious ceremony. The India Conferment was conducted in November 2015, and there were a total of 187 CISR conferees. Because of the large
30
RESOURCES | Fall 2020
number who were able to attend, the conferment was divided into two groups, the first having 74 conferees and the second with 113 conferees. After the conferment, the excitement continued, and the new CISRs gathered into groups for photos, while others took selfies. In the Indian culture, the torch on the CISR pin symbolizes success and prosperity. But why was the ceremony being conducted in the middle of the night? The answer is because of differing time zones. Working at night in India is often nec-
essary to support operations in North America, in addition to other parts of the world. Another conferment was conducted for PATRA two days later, by the same officers of The National Alliance. PATRA also participates in the CISR program. The employees of both organizations must be fluent in speaking, writing, and understanding English. The management of the organizations believed having their employees obtain
the CISR designation would build momentum and credibility in servicing policies in the US, and for future organizational expansion. These new CISR conferees did not have an easy path to their designations. The majority of them have a long commute to work—some, as long as two hours. The management of their organizations wanted a training program that focused on commercial servicing work. The National Alliance stepped up to customize a program for them consisting of five commercial lines CISR courses and three Intro Series courses. The Intro Series courses are self-paced and designed for individuals in the beginning stages of their insurance careers. All of the courses were delivered in English and online. All of the new CISRs were required to complete and pass the eight-course
learning path in just three weeks! The CISR courses were so successful for these two organizations that word got out, and the program soon expanded to the Philippines and Guam. The courses in Guam were conducted in both online and traditional classroom formats. The National Alliance conducted its first conferment in Manila in November 2017, with 117 new CISRs. The expansion of CISR Program to India, the Philippines and Guam demonstrates not only the forward thinking and leadership of the participating organizations, and the learning and professional commitment of the new CISRs, but it also demonstrates the flexibility of The National Alliance to adapt its courses and schedules to organizations’ and participants’ needs. In keeping with this mind-set, The National Alliance has developed a new Subscription Membership. The National Alliance’s Subscription Membership gives partici-
pants online access to all designation programs and continuing education courses, for a monthly fee. In addition to the inherent flexibility this membership provides. the potential cost savings to our participants when earning any of the five National Alliance designations is substantial. Through this new Subscription Membership, The National Alliance also offers corporate packages, complete with an online portal to help corporate clients manage all their employees’ learning needs. The National Alliance has always sought to help insurance and risk management professionals achieve their full potentials. Now, in partnership with forward-thinking employers and motivated international participants, The National Alliance is realizing this goal on a world-wide scale. We welcome and congratulate all of these international CISRs. Expanding the CISR Program into India, the Philippines, and Guam has demonstrated the ability and flexibility of The National Alliance to create a program of courses that meet the insurance education needs of insurance professionals, and the organizations which employ them, anywhere in the world. n
Summer Fall 2020 | RESOURCES
31
With Online Courses— Self-Paced or Instructor-Led Connect to our online courses from anywhere—all you need is a computer, a mobile device, or a smart phone. You never leave what matters most—your clients.
Self-Paced
Start Date
Anytime You Want
Duration
Instructor-Led
Offered Continuously
4 Weeks, 4 Hrs/Week
Format
Up to 60 Days
CE Credit Approved in Most States
View available online offerings at: https://www.scic.com/distance-learning/
COVERAGE CONCERNS
Pandemic Pods and Microschools— the Insurance Implications
By Dustyne Bryant, MBA, CIC, CISR
T
he pandemic is lasting longer than we ever anticipated and we’re all looking for new ways to solve the challenges in front of us—including how our children can safely return to school. Stressed parents are struggling with uncertainty. Will the schools reopen? Will there be online classes or in-person classes? With so many details left up to local school systems, parents are looking for alternatives to ensure their children continue
learning in a safe and structured environment. Enter “pandemic pods.” Also called microschools or nano schools, pandemic pods are popping up around the country as an alternative, or an addition, to children’s schooling this fall (if not the full academic year). Parents are quickly pivoting to create these “pods” in a targeted effort to bring small cohorts of kids together in similarly-aged groups at homes, outside spaces, and sometimes even commercial spaces, to socialize and/or study the same curriculum plans.
If you’re a parent, you can’t have a conversation about going back to school without hearing about pandemic pods. If you don’t have school-age children or if your kids have moved out of the house, this may not even be on your radar screen. But there can be insurance implications—and these risks are likely not top-of-mind for those parents who see microschools as a viable alternative to regular schooling. Parents have other things to worry about— which is where you, as a risk-management professional, come in! (Continued) Fall 2020 | RESOURCES 33
COVERAGE CONCERNS
The Risks of Microschools Consider the liability risks in these microschool scenarios: • Parents hire a full-time teacher to come into their home to homeschool their child one-on-one or teach a group of students. • Parents hire part-time teachers and tutors to come into their home to help with the school system’s virtual learning curriculum.
Intermediate
Advanced
*REQUIRES YEAR-LONG COMMITMENT
34
RESOURCES | Fall 2020
• Parents send their kid(s) to someone else’s house or to a commercial space for pandemic pod schooling. So how can you, as an insurance professional, protect your clients who are participating in these pandemic pods? Contact them with email blasts, mailers, or add a statement to your voicemail. Get the conversation started. Take the time to connect with your clients; empathize with the tough decisions they’re making. Then ask how they’re handling schooling and/or childcare for their kids. You should do this with teachers, as well. Some teachers have left school systems to tutor and homeschool in microschools as independent contractors. You won’t know until you ask. Additional Insurance Coverage Parents or teachers hosting pods in their homes may have low coverage limits or gaps in coverage they need to address with endorsements or higher coverage options before making the commitment. Talk to clients about excess liability coverage. Talk through questions like: What if someone else’s child is injured on your property? What if a teacher comes into your house and your dog bites them? For clients—namely teachers or tutors providing pod services—coverage for exposures related to professional services is likely excluded from their homeowners’ policies, so have a conversation about the risks and how to minimize them. Professional liability coverage may be needed. And if the pandemic pod is licensed as an in-home childcare program (serving children ages 0–12 in most states), talk about the need for commercial general liability insurance. For parents sending their kids to another family’s home or an external space, make sure they do their due diligence. Have parents ask the pod leader about what coverages and protections are in place. People are getting creative, but, at the same time, they may be causing coverage issues for themselves—and agents may not be having the needed
conversations to ensure their clients are properly insured. Consider the college parent sending their child back to campus with a camper as a more affordable or flexible housing arrangement. Discussing the best coverage options with your client is necessary, and that starts with understanding the intended use. Reconnect with clients Now, more than ever, is a great time for agents to reconnect personally with their clients. It’s easy to focus on your to-do list, answer quick questions, or put out small fires and move on. But these are unprecedented times with severe economic consequences, so make time for those personal conversations. Ask your clients how they are coping with the pandemic. You may be surprised by their responses, and you may uncover risks they hadn’t considered. If clients are overcoming barriers in innovative ways—like how to school their children—it’s time for agents to lean into that creativity, too, so they can advise clients properly. n About the Author: Dustyne Bryant, MBA, CIC, CISR Dustyne Bryant, Personal Lines Academic Director at The National Alliance, is a self-professed and colleaguebacked wholehearted personal lines insurance geek. Supported by multiple degrees and designations over the course of a decade and more, her thirst for knowledge is never ending and ever growing. Her passion for educating others in personal lines insurance is even greater. She is an advocate of permanency for children in foster care and relishes all the joys of being a soccer mom, minus the minivan.
T
he National Alliance and the Society of Certified Insurance Service Representatives (CISR) is proud to announce the 2020 State Winners of the Outstanding CSR of the Year Competition. The Society of CISR established this competition in 1991 to honor customer service representatives and account managers who have made significant contributions to the insurance and risk management industry. The competition is sponsored by both the Society of CISR and the Society of CIC—proud member organizations of The National Alliance. Visit www.scic.com for more information about entering the 2021 competition.
Alabama Brandi Woodruff, CIC, CISR Valent Group
Florida Denise Brownsberger, ACSR LassiterWare Insurance
California Marcella R. Beasley, MA, CIC, CISR, CRIS, CCIP, MLIS, CIIP, CLP Alliant Insurance Services, Inc.
Georgia Megan M. Owenby, CISR Elite, Brown & Brown Insurance of Georgia
Colorado Jessie Lee, CISR Six & Geving Insurance, Inc.
Iowa Jennifer Connelly, CISR, ACSR SilverStone Group LLC, a Hub International Company
Congratulations to each of the 2020 state winners!
Fall 2020 | RESOURCES 35
36
Idaho Sierra M. Horvath, CIC, STAR Hub International Mountain States, Ltd.
Maryland Dawn Day, CISR Bitner Henry Insurance Group
Montana Chelsey McCord, CIC Hub International Mountain States, Ltd.
Indiana Dawn Bryant-Smith, CIC, CISR, ACSR Shepherd Insurance
Maine Annette Richards, ACSR Cross Insurance Agency
Nebraska Leah David, CISR INSPRO Insurance, Inc.
Kentucky Ashley Carter AssuredPartners
Michigan Melissa Richardson, CISR Karn Sitkins Payette Insurance Agency, Inc.
Nevada Itilya Lang, CISR Distinctive Insurance, an Alera Group Company, LLC
Louisiana Brandon Hamilton, CISR, AINS, AIS, AU, AU-M Daul Insurance Agency, Inc.
Missouri Ashlae Cook, CISR Elite Ollis/Akers/Arney Insurance & Business Advisors
New Mexico Judi Vaughn, CIC, CISR Kysar Millennium Leavitt Insurance Agency
RESOURCES | Fall 2020
New York Cheryl Fitzpatrick, CPCU, ACSR Mackoul Risk Solutions, LLC
Pennsylvania Melissa M. Horner, CISR, CRIS Alliant Insurance Services, Inc.
Texas Leslie J. Quick, CISR, AMCL Champion Commercial Insurance Agency, LLC
Ohio Reuben H. Hall Oswald Companies
Puerto Rico Desiree Vazquez Vega Fulcro Insurance, Inc.
Vermont Katie LaFreniere, CISR Crowley Insurance Agency
Oregon Susan Temple Ward Insurance
South Carolina Diana Rideout, CISR Elite Correll Insurance Group of Hilton Head
Washington Allison Barga AssuredPartners of Washington dba Hall & Company
Oklahoma Natalie Mason, CISR Elite TCSC Insurance Agency, Inc.
South Dakota Kimberly Lyon, CIC, CISR Elite Fischer, Rounds & Associates
Wisconsin Jenna Moehrke, CISR R&R Insurance Services
Fall 2020 | RESOURCES 37
Keep Your Designation Current. Complete Your Annual Update Online. Take the uncertainty out of completing your required annual update with our self-paced and instructor-led online courses. Browse an ever-growing catalog of the latest and most relevant risk and insurance topics available today.
WHAT ARE MY ONLINE UPDATE OPTIONS?