SC Agent & Broker magazine - Spring 2010

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South Carolina Agent & Broker • Spring 2010

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Think hard-to-place.

Think Burns & Wilcox.

. . . . . Condominiums Oceanfront Homeowners Excess Windstorm Excess Flood Umbrellas Liability

. . . . . Burns & Wilcox — the largest insurance MGA/wholesaler in North America.

800.498.1600 Get Personal: Commercial:

Kasey Vaughn X 2221 Jamie Canady X 2214 Angela McNally X 2205 Melissa Hawgood X 2219

SPRING 2010

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Independent Insurance Agents & Brokers of South Carolina PO Box 210008, Columbia, SC 29221 800 Gracern Road, Columbia, SC 29210 803-731-9460 803-772-6425 (fax) e-mail: information@iiabsc.com

IIABSC Staff

G. Frank Sheppard, AAI, CAE President ext. 23, fsheppard@iiabsc.com Rebecca H. McCormack, CPCU, CIC, AAI, CPIW Vice President ext. 14, bmccormack@iiabsc.com Anita J. Trevino Director of Communications ext. 29, atrevino@iiabsc.com Beth Chastie Director of Administration & Finance ext. 17, bchastie@iiabsc.com Charlene Bernotas, CISR, ACSR Agency Administrator ext. 22, cbernotas@iiabsc.com Elaine Mikell Meeting Coordinator ext. 16, emikell@iiabsc.com Mary A. Ellis Education Coordinator ext. 12, mellis@iiabsc.com Jeanette Bloss Education Coordinator ext. 11, jbloss@iiabsc.com Pat Fetner Receptionist ext. 10, pfetner@iiabsc.com Lee Ruef Director of State Government Relations lruef@iiabsc.com South Carolina Agent & Broker is the official magazine of the Independent Insurance Agents and Brokers of South Carolina and is published four times annually. IIABSC does not necessarily endorse any of the companies advertising in this publication or the views of its writers.

Articles and information published in this magazine may not be reproduced without written consent of the IIABSC. South Carolina Agent & Broker is not responsible for unsolicited manuscripts, art or photography. The publisher cannot assume responsibility for claims made by advertisers and is not responsible for the opinions expressed by contributing authors.

For more information on advertising, Contact Jim Aitkins Blue Water Publishers 22727 - 161st Avenue SE Monroe, WA 98272 360-805-6474 fax: 360-805-6475 jima@bluewaterpublishers.com

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South Carolina Agent & Broker • Spring 2010

Contents

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Message from the Chairman of the Board Message from the National Director ACT: It’s Time to Update Your Disaster Plan Agent Technology Conference Business Coalition Continues Pursuit of Civil Justice Reform in SC 2010 SC Trusted Choice® Big “I” National Championship Palmetto Partners Program RLI Claim Scenarios 2010 Young Agents Conference - Save the Date Flood Insurance - Reduction and Reformation of Coverage Caution: Road Work Ahead IIABSC Construction Risk and Insurance Specialist Classes ACT: Build a Web Presence Worthy of 2010 Trusted Choice®: Conducting an Image Audit 2009 InsurPac Contributors IIABSC Calendar 2010 Board of Directors and Executive Committee

6 8 10 16 18 21 22 26 28 30 34 35 36 40 42 44 46

Advertiser Index AequiCap Program Administrators 27 AmTrust North America 29 Bankers Insurance Group 12 Builders Mutual Insurance 37 Burns & Wilcox 3, 5, 48 Capstone Underwriters 13 Edwin M. Rollins Company 7 FastSnap 20 GUARD Insurance Group 43 Hanover Excess & Surplus 9 Installment Discount Corp.

39 Insurance House 23 J. M. Wilson 14 Jackson Sumner & Associates 19

Johnson & Johnson Montgomery Insurance Preferred Specialty Prime Rate Premium Finance ProVision Underwriters South Carolina Agent Network Southern Insurance Underwriters Southern Cross Underwriters Summit Marketing Services TAPCO Underwriters The National Security Group The Seibels Bruce Group Universal North America Western Marine

24, 25 20 47 31 43 31 2 15 37 17 38 35 11 41

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Think hard-to-place.

Think Burns & Wilcox.

. . . . . Condominiums Oceanfront Homeowners Excess Windstorm Excess Flood Umbrellas Liability

. . . . . Burns & Wilcox — the largest insurance MGA/wholesaler in North America.

800.498.1600 Get Personal: Commercial:

Kasey Vaughn X 2221 Jamie Canady X 2214 Angela McNally X 2205 Melissa Hawgood X 2219

IIABSC Chairman of the Board Kathy D. McKay, CIC, CPIW

South Carolina Trusted Choice® Agents Relay into the Spotlight

M

y March Madness bracket looked a lot like last year’s. I chose Clemson to win.

I’ll make the same choice next year and the next and the next…gutsy or stupid?

You decide, but understand that I believe commitment and support will ultimately yield a positive outcome. I also subscribed to the power of large numbers, and if all fans followed their heart the confidence would surely translate into positive results.

This “all in” concept applies on and off the court. Over the next few weeks you will have the opportunity to participate in the American Cancer Society Relay For Life® alongside fellow agents committed to the Trusted Choice® brand. Right now, Relay For Life® events are being held in communities all around the state. Each event presents our association the opportunity to educate consumers and promote our brand.

As individuals and agencies we support numerous charities, not only monetarily but by volunteering our time to community service projects. Our state association is leading the way with financial support, but true success will depend on the number of agents willing to commit to individual participation and local support.

Relay events are held overnight as individuals and teams camp out at an athletic track, park or other gathering area, with the goal of keeping at least one team member on the track at all times throughout the course of the evening. Objectives for sponsorship include educating the consumer, establishing goodwill with the community and recruiting new employees. The potential is enormous and soulful – aimed at furthering the American Cancer Society’s efforts to save lives by fighting back.

Brand promotion through charity tie-ins has been a forceful marketing concept for years. The process is simple, but effective. The idea is to promote goodwill and enhance industry image while educating the consumer on the value of the Trusted Choice® brand. We may not have the advertising budget of larger insurance corporations, but we do have the power of local presence in large numbers.

Your state Trusted Choice® Chairman, Jay Taylor, worked selflessly with the American Cancer Society to provide you with this opportunity. The potential for South Carolina to lead the way in promoting the Trusted Choice® brand lies in the power of its individual agents. To learn more about the SC Relay For Life® schedule, visit www.screlayforlife.org, or visit www.iiabsc.com and look for the Relay For Life® tab.

Trusted Choice® – are you “ALL IN”?

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South Carolina Agent & Broker • Spring 2010

Call 800.432.7715 Or visit us at: www.RPSins.com/Rollins

National Director John R. Braddy, CIC, AAI

B

A New Era Begins Big “I” national Board of Directors vote to have all members support Trusted Choice®; adopts new association logo.

ack in March, the Independent Insurance Agents and Brokers of America (IIABA) national Board of Directors approved two very significant initiatives that will usher in a new era for IIABSC members, consumers and the insurance industry at large.

First, after concluding that a strong national consumer brand is fundamental to the success of members, and completing a thorough review of how best to support members’ use of Trusted Choice® as the consumer brand, the decision was made to have all members support Trusted Choice® via a reduced cost for participating.

As a member of the South Carolina association, your agency has already been enjoying the benefits of reduced Trusted Choice® costs since our state Board made Trusted Choice® part of the SC dues structure two years ago. The new national initiative will add thousands of additional Big “I” agencies as Trusted Choice® agents across the country – increasing the public awareness of the brand.

The second major decision of the national Board of Directors was to update the IIABA logo to be harmonious with key elements of the Trusted Choice® logo. The new association logo still includes the words “Independent Insurance Agent,” but they are embedded within the iconic eagle “swoosh” used

by Trusted Choice®.

IIABA and IIABSC will use the updated logo for lobbying and industry communications, as it represents the association. However, member agencies participating in Trusted Choice® will be encouraged to co-brand their agencies with the Trusted Choice® logo, which was designed in response to attributes consumers indicated were important to them. The logo transition process includes filing for a trademark and preparing the final graphic files with guidelines for use. As soon as those steps are completed, the new logo will be made available to members.

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South Carolina Agent & Broker • Spring 2010

In the nine years since Trusted Choice® was launched, more than 10,000 agency locations chose to join the branding program, with 53 carriers providing significant support as company participants. Trusted Choice® was developed and based on consumer research – which continues to be validated in subsequent research – that consumers value choice, customization and advocacy, the very attributes that independent insurance agents offer to their customers.

The competitive environment that prompted the launch of Trusted Choice® has increased, especially in the face of the large advertising budgets of direct writers and captive agency carriers. Trusted Choice® provides professional marketing resources and the opportunity to leverage the collective efforts and scale of Trusted Choice® members for Internet Search Engine Optimization (SEO). It also enables agencies to piggyback on the state association and national promotion of the Trusted Choice® brand, through local, state and national advertising.

Advertising campaigns will continue throughout the year.

This month alone, Trusted Choice® ads will run on the Fox Network and TNT and will appear in Smart Money magazine. In addition, Trusted Choice® will be a sponsor for American Public Radio’s Marketplace and will continue its aggressive Facebook advertising campaign.

Stay tuned to news from the Big “I” on how your agency can best take advantage of Trusted Choice® and start to “Live the Brand”!

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It’s Time to

Update Your Disaster Plan

D

isaster planning is for every independent agency. Nearby construction can take out your electricity or sever your connections to the Internet, putting your staff out of commission for several days. A computer virus can bring your systems down, resulting in costly down time and an inability to service your customers as they expect.

Has your agency taken the proper precautions to handle these disasters, let alone a fire, flood, hurricane, tornado or earthquake? Does your staff understand what is expected of them to safeguard against disasters and what their role would be if a disaster were to occur? The following checklist is based upon recommendations contained in ACT’s reports and is designed to assist agencies in updating their current disaster plans The Key is preplanning • Think through different contingencies and how agency should respond; develop a written plan; test and practice different scenarios.

• Train each employee on his or her roles both to prevent disasters and to help the agency and its customers deal with the aftermath.

• Have a plan to access additional staff resources should current staff not be available.

• Conduct an annual network assessment of your disaster plan and your security plan, update as needed.

• Maintain valuable papers and agency records offsite in a secure facility.

• Include specific triggers in your plan that will set it into motion as foreseeable disasters approach.

Technology positions agencies to handle most disasters more effectively • Move from paper to electronic files wherever possible.

Implement download for commercial lines as well as 10

South Carolina Agent & Broker • Spring 2010

By Jeff Yates, ACT Executive Director

•

•

• •

•

•

personal lines. The management system is the go-to place for client information.

Portability provides a great advantage so you can reach your agency management system, email and other systems anywhere and any time.

Have a substantial agency web site with needed agency and carrier contact information. This is where customers will look first after a disaster. Have your web site hosted offsite in an area that would not be affected by the disaster.

Implement claims download as soon as possible and encourage your vendor and carriers to offer it promptly.

Customer claims inquiry on the carrier web site is an important tool in handling the surge in customer inquiries following a disaster. The industry needs to work to extend this functionality out to the agency web site as well. Agents should implement real-time claims inquiry from their agency management system wherever possible to cut the time to handle these inquiries to less than a minute.

Give customers and agents the capability to file claims online. This can be more efficient than filing the claims by phone when phone service is intermittent and unreliable.

Implement real-time claims inquiry, real-time rating and the other real-time capabilities available to you so that you can service customers in as little time as possible and continue to write new business in the aftermath of a disaster.

Take advantage of third-party resources that would keep your agency functioning in the aftermath of a disaster • Consider 24/7 remote telephone service to handle customer inquiries if the agency’s communications are

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Spring 2010 • South Carolina Agent & Broker

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• • • • • •

• • • •

down, as well as the tremendous spike in claims that would be possible. These services possess a mirror of the agency’s database.

Consider engaging a firm to provide emergency equipment and facility replacement if needed.

Consider remote hosting of agency management system.

Consider remote service for back up of your data, in addition to your tape backups.

Host your agency web site in a secure facility out of the area where the disaster might strike.

Consider hosting your email offsite or have a back-up Internet agency email account.

Consider having a technology firm to provide emergency services, help desk, onsite assistance and equipment when needed.

It is important to formulate these relationships in advance, and understand your vendors’ disaster plans.

Pre-arrange to have a temporary office at branch or “buddy” agency.

Make provision for emergency housing following a disaster if needed.

Have maintenance contract for generator, including refueling in the aftermath of disasters.

Employee Communications • Set up employee phone tree, including emergency contact info for each employee.

• Set emergency call-in number, email and text messaging for employees.

Customer Communications • Maintain customer emergency contact information.

• Give customers emergency contact information for agency.

• Train customers to go to agency web site for emergency contact information for agency, their carriers and other services.

• Consider a letter to customers at start of hurricane season detailing their carriers, coverages and emergency contact info for the agency and their carriers.

• Consider ad campaign to encourage consumer preparedness for disasters, with helpful information located on agency web site.

• Consider using email and automatic call outs providing customer information when a storm is imminent.

• Reach out to customers in aftermath 12

South Carolina Agent & Broker • Spring 2010

with web site, signage, newspapers, radio and TV. Prepare messages in advance.

Lists/Info you will need in electronic and paper form when you evacuate M Employee telephone tree with emergency contact info.

M Carrier contact info., carrier passwords (take security precautions with respect to this information).

M Phone company and other agency vendor contact info.

M Contacts for emergency assistance and services.

M Complete customer list with emergency contact info, location addresses, policies, carriers, limits, deductibles and lienholders.

M Rolodex and copies of the disaster plan.

M Expiration list of policies to be processed for next six months. Activity lists of things coming up for next two months.

M Equipment inventories and valuable agency papers.

M Take security precautions with regard to all of this information!

Telephones • Switch over phone lines at the phone company to emergency service before disaster. Investigate capability to do this automatically online.

• Have access to multiple cell phone services, satellite

• •

phones and text messaging.

Implement Voice over Internet for back-up communications capability.

Have alternative phone line that bypasses the telephone switch in your office to which the agency’s regular phones can be switched if you lose power.

• • • •

Computers • Have multiple ways to reach the Internet.

• Take advantage of wireless and portability. Have laptops with broadband mobile access cards and wireless Internet.

• Have smart phones and PDAs with cellular broadband access that can act as a high-speed modem.

• Seriously evaluate ASP option for agency management system. Ask how they can help if you don’t have Internet connection.

• Have procedures for properly turning on and off critical equipment, including the UPS battery backup units. Test these procedures periodically.

• Investigate portable satellite dish for Internet access, which is coming on the market.

Back up of agency data is absolutely critical • Create daily backups, and have two trusted, authorized employees alternate taking the daily tapes to two different locations. Also maintain monthly and annual tapes.

• •

Perform test restore at least monthly to test the integrity of the tape and the integrity of the data.

Invest in secondary form of data archiving to provide redundancy (tape, remote, external hard drive).

Seriously consider using online remote service as primary back-up method, coupled with tapes.

Be prepared to express mail a tape of the latest database to agency management system’s data center if a disaster is imminent.

Keep copy of back-up software, with its key code, offsite in a secure place.

Manage the security risks presented when taking each of these steps.

Generators • Consider having a permanent generator large enough to supply continuous power to entire facility, wired for automatic cross-over, located in as safe a place as possible.

• Each server and work station needs to be fitted with a proper Uninterrupted Power Supply (UPS).

• Never plug computer equipment directly into a generator.

• Test generator under an electrical load to make sure it is producing electricity.

• Contract with vendor to provide ongoing maintenance and testing and to deliver fuel in emergencies.

When a foreseeable disaster is imminent: M Express mail a tape of the latest database to the agency management system’s data center.

M Consider email and automatic call outs to customers with emergency contact information.

M Staff should complete processing of all work that is outstanding, especially as it relates to coverage relating to the disaster.

M Make sure all needed lists are up-todate in paper form, as well as exported to a laptop and portable storage device. Tight security is imperative on each of these items.

M Make sure all employees know their assignments and have made clear how they can be reached in emergency.

M If possible, load your agency management system application onto a laptop along with your “latest and greatest” data file for instant access.

Take all security precautions to protect your data.

Spring 2010 • South Carolina Agent & Broker

13

M If you utilize an online data backup service, upload to them if possible.

M Wrap and label all employee work to be done to protect it.

M Take reasonable steps to protect all equipment.

M Redirect your phone numbers before the disaster.

M Disconnect all electrical equipment from the wall.

M If destruction of file server is imminent, consider taking the server with you if you know how to disconnect it and handle it safely.

M Shut off water and gas lines.

M Have needed provisions on hand, including enough cash for a few weeks.

• •

Seek draft authority or methods to provide customers with emergency funds immediately.

Seek the ability to file claims online, since other types of communication may be intermittent or nonexistent.

E&O Considerations • Document in writing prior to the anniversary date if you are unable to replace coverage.

• Advise customers of significant reductions in coverage when you replace coverage with a new carrier or write/ renew the coverage with a surplus lines carrier and secure customer’s written acknowledgement of the reduction in coverage. Where an admitted carrier renews the policy, state laws usually put the obligation on the carrier to notify Needed Provisions: the customer of reductions in coverage (not so with a nonM Fans, extension cords, batteries, flashlights, batteryadmitted carrier). powered lamps and radios and low-heat, low-energy • Be especially careful to follow all of the laws with lighting available to use with your generator. surplus lines placements, point out coverage reductions M Sufficient bottled water to handle employees’ and or coverage gaps to customers, along with the fact that customers’ needs for two weeks. surplus lines carriers are not typically covered by the M Canned or dry-food goods that do not require refrigeration guaranty fund. Get binders, certificates or other evidence of or cooking, as well as beverages and snacks for employees insurance from the surplus lines broker because the retail and customers. agent does not have binding authority for this business.

M Can openers, paper/plastic utensils, plates and cups, trash • Advise the customer in writing of any adverse change in bags, bleach, paper towels, cleaning supplies and hand the carrier’s A.M. Best rating wipes.

Yes-SundaeAd_SC (5x4.9).pdf 2/15/10 12:34:47 PM during the policy term.

• Request a signed rejection form from customers that refuse M First-aid supplies and blankets.

M Have paper ACORD claims forms available, carbon paper and other office supplies, as well as digital cameras.

M Matches, barbeque grill, fuel for grill.

Just say

Customers’ / employees’ special needs in the aftermath of disasters • Be aware there will be significant emotional and psychological effects after major events.

• Provide drinks and food • Have a volunteer or staff member manage the client process, create waiting lists, direct claims and process traffic.

• Staff should caucus each day to adjust response as necessary.

Carrier Issues • Understand in advance each of your carrier’s CAT plans, the local presence they will have and how they will permit you to make multiple claims efficiently.

• Understand how your MGAs, E & S Brokers and their carriers will handle claims.

14

South Carolina Agent & Broker • Spring 2010

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available coverage for flood insurance (and/or earthquake insurance in appropriate areas). Clearly communicate to customers the exposed limits on their risks.

Create a well documented file.

•

Summarizing Key Issues • Pre-plan. Have redundancy in communications, Internet access and backups.

• Make arrangements with third-party emergency resources.

• Become paperless; implement Download and Real Time.

• Understand critical nature of good data backups to recovery.

• Take advantage of wireless technologies for voice and data, as well as the portability of PCs and portable devices.

• Have emergency contact info for employees, customers, carriers and third-party emergency resources. Have needed lists of information.

• Make sure employees and customers know how to reach you.

• Know your carriers’ CAT plans.

• Carefully evaluate the E&O exposures that arise in these situations and manage them.

Additional Resources: • ACT’s Key Considerations in Disaster Planning & Management, located under “Agency Improvement Tools” at www.independentagent.com/act.

• ACT’s The Lessons Learned from Recent Disasters & Recommendations for Improved Response for Independent Agencies and the Industry (2006), available by emailing jeff.yates@iiaba.net.

• ACT’s The Independent Agent’s Guide to Systems Security: What Every Agency Principal Needs to Know (including prototype agency security policy), located under “Agency improvement Tools” at www.independentagent.com/act.

• IIABA’s Best Practices of Crisis Management—A StepBy-Step Business Recovery Planner, located under “Best Practices” at www.independentagent.com.

• National Institute for Occupational Safety & Health at www.cdc.gov/niosh/topics/prepared/; click on “small business disaster planning guide.”

Jeff Yates is Executive Director of the Agents Council for Technology (ACT), which is part of the Independent Insurance Agents & Brokers of America. Jeff Yates can be reached at jeff. yates@iiaba.net. ACT’s many reports and business improvement tools can be found at www.independentagent.com/act. This article reflects the views of the author and should not be construed as an official statement by ACT.

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South Carolina Agent & Broker • Spring 2010

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Business Coalition Continues Pursuit of Civil Justice Reform in South Carolina

I

By Lee Ruef IIABSC Director of State & Governmental Affairs

t has been seven years since a coalition of businesses and professional associations—The South Carolina Civil Justice Coalition (SCCJC)—began pursuit of civil justice reform in South Carolina, a pursuit that has had some success but needs to continue, possibly for years.

Significant reforms in civil justice were enacted by the General Assembly in 2005. Then the coalition took on worker’s compensation, which led to significant reform in 2007. But in both cases not all of the reforms needed were accomplished.

SCCJC is an organization of 40 individual companies and nearly every major business association in the state. IIABSC supports the coalition by working closely with the American Insurance Association, a coalition board member, which is the oldest and largest national property and casualty insurance company association.

In 2005, the coalition’s successful lobbying for tort reform resulted in South Carolina’s Hampton County being removed from the American Tort Reform Foundation’s “Judicial Hellholes” list. Unfortunately, the coalition had to “take caps off the table” to win victories on joint and several liability, venue, statute of repose and a reduction in the post-judgment interest rate.

In 2007 workers’ compensation reform phased out the Second Injury Fund, set new guidelines for some compensation awards and repealed several troublesome court decisions. But the coalition had to take a very important issue “off the table” to achieve these reforms. That issue was the use of American Medical Association Guidelines in determining awards.

SCCJC also successfully pushed a Senate audit request

18

South Carolina Agent & Broker • Spring 2010

of the Workers’ Compensation Commission that is underway on the issues of consistency of awards and reasonableness of attorney’s fees.

The work on tort reform is not done because South Carolina continues to receive high rankings from the US Chamber of Commerce for its unfair lawsuit climate. Currently, South Carolina is ranked 43rd for its legal environment, which puts our state just seven from the bottom.

Also, punitive damages reform remains a top issue with the state and national business community especially in light of a recent SC Supreme Court decision. In this case, the plaintiff was awarded $186,000 in compensatory (actual) damages.

Plaintiff was also awarded $15 million in punitive damages.

On appeal, the Supreme Court considered the appropriate ratio between punitive and compensatory damages that should be applied. The Court reduced the punitive damage award to $10 million. The Court bent over backwards to award $10 million in punitive damages by (a) using the highest possible single-digit ratio that would still comport with due process requirements, and (b) by using the “potential harm” to the plaintiff instead of the actual damages to justify the award.

S.C. House Speaker Bobby Harrell (R-Charleston) and Senator Larry Martin (R-Pickens) laid the groundwork for tort reform last year by introducing House Bill 3489 and Senate Bill 350.

South Carolina’s business community’s position is united in support of these bills, which seek to restore common sense to the courtroom. S.350 and H.3489 are comprehensive bills that include 11 specific changes sought by the civil justice coalition.

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The highlights of these reforms are:

•

Punitive damages standards—North Carolina and Georgia both already have limits • Full and fair noneconomic damages • Admissibility in civil actions of nonuse of seat belts • Making it law that building code violations do not eliminate the Statue of Repose • Limit appeal surety bond requirements to reasonable limits, • Immediate appellant review of certification of class actions, • Make it clear that a judgment against a corporation is a prerequisite to bring a claim to seek personal liability against individual officers or directors of the corporation. Incorporating this into the current agenda is a result of a recent SC Supreme Court decision.

• Private Attorney Retention Sunshine Act—Provides for accountability and standards for hiring outside legal counsel by the State of South Carolina Cam Crawford is Executive Director of the coalition, and has done a masterful job of leading diverse business entities into very organized fights with clear agendas and good information to back up what the coalition asks the General Assembly to do.

Of 2010’s effort on civil justice Crawford said: “If we are going to get serious about competing for business and industrial development in the Southeast then we need more reform of our civil justice system in South Carolina. For example, we are one of the few states in the Southeast that does not have a cap on punitive damages.”

South Carolina Secretary of Commerce Joe Taylor said “fundamental issues like tort laws and workers’ compensation play a key role in every location decision” by companies looking for new expansion locations.

Crawford also points out that further civil justice reform is needed to protect small business from being crippled by one lawsuit.

So far it appears that there is momentum building to move about half of the coalition’s civil justice agenda this year: caps on punitive damages, admissibility in civil actions of use of seat belts, on Appeal Bonds establishing a cap of $25 million for large businesses and $1 million for small businesses and changes in the Statute of Repose law to close a loophole regarding building code violations.

When bills supporting the coalition agenda face key votes, grassroots help is vital to success. IIABSC is dedicated to advancing the coalition agenda. Members should stand ready to respond to grassroots alarms on tort reform when they are sounded.

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South Carolina Agent & Broker • Spring 2010

We believe in the strength of independent agents.

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Spring 2010 • South Carolina Agent & Broker

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Some things never change.

haels, 1964 George Mic

Stable, reliable, consistent for 45 years.

Times change, challenges change, but our purpose remains steadfast: to be the people who make the insurance experience better.

“ Working with George has been great.

He has helped our agency on many occasions with some really tough problems.”

– R. Wayne Bray, Harry E. Bray Insurance Founded in 1964, Insurance House is a managing general agency for personal, commercial and E & S business. Insurance House proudly serves independently owned retail agencies with underwriting expertise and access to carriers rated A- or better by AM Best.

www.insurancehouse.com

Delaware | (301) 439-4700

D. C .

(301) 439-4700

| Georgia | Maryland (770) 952-0080

(301) 439-4700

You can count on me.

George Michaels, 2009 Vice President, Insurance House North Carolina Branch Manager 919.383.9439, Ext. 1113 gmichaels@insurancehouse.com

| N o r t h C a r o l i n a | S o u t h C a r o l i n a | Te n n e s s e e | V i r g i n i a (919) 383-9439

(919) 383-9439

(770) 952-0080

(919) 383-9439

If it floats . . . we write it!

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Serving I

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Providing quick quotes and competitive rates for all of your Personal and Commercial Marine Accounts FEATURING: u All boat types, ages, and sizes to include: jet skis, charter boats, tug boats, and multi-million dollar yachts u Occasional charter coverage on a personal form for qualifying risks u Coverage for 6-pack charters and rental operations u Our policies offer extended navigations and increased liability limits u J&J writes with both admitted and non-admitted carriers u Extended coverage not offered by listing a boat on a homeowner’s policy

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800.487.7565 Marine & Recreation Department ext. 5023

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RLI Claims Scenarios

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ot all disasters are weather related. Before you read the brief examples below of REAL claims scenarios that have been submitted to RLI PUP and covered in the past few years, ask yourself the following questions: 1. How many people do you know who have at least $500,000 put aside for emergencies?

2. How many of your current customers are without Personal Umbrella coverage?

3. In the claims stories, if these people had not been offered the RLI Personal Umbrella by their agent and found out it had been available, who do you think they would be calling next?

4. What should you be doing differently?

Scenario #1: The 76-year old insured pulled forward out of her driveway to make a left turn into the path of a motorcycle approaching from her left, which was coming out of a curve.

The operator of the motorcycle applied his brakes and “laid it down” but struck the quarter panel of the insured’s vehicle. The insured was cited for traffic violations.

The motorcycle passenger (wife of the motorcycle operator), died at the scene. She is survived by her husband, four children (ages 7 to 15), her parents, grandparents and several siblings.

The motorcycle operator suffered a fractured finger and abrasions and had a valid “bystander’s claim” under state law.

The RLI Personal Umbrella policy contributed $640,000 in addition to the primary policies.

Scenario #2: Shortly after sunset, Mrs. Insured was driving her minivan on a two-lane roadway near an intersection when she hit a bicycle driven by a 14-year-old girl (Girl #1), who suddenly crossed in front of her. The accident occurred on the 26

South Carolina Agent & Broker • Spring 2010

roadway adjacent to a park where football and soccer practice had just let out.

There were six witnesses to the accident, including the girl’s best friend (Girl #2), who was riding with her. Had they ridden to the next intersection, they could have crossed with a light and crosswalk, but because they were in a hurry, they decided to cross where they did.

Witnesses saw both girls initially start across the road, but then Girl #2 stopped. Girl #1 kept going and was struck. Girl #2 would not say why she stopped, but did say that she did not think Girl #1 looked before she crossed the road.

All witnesses agree that the insured van was traveling well within the 45 mph speed limit, and the insured maintains that she was going approximately 35 mph. The witnesses also agree that the insured did not apply her brakes or take any evasive action nor did Girl #1 look both ways before crossing the road.

With the exception of one witness, who is a close friend of Girl #1’s family, the remaining four witnesses are consistent in their testimony that the insured probably did not have time to avoid the accident.

The insured driver is now 70 years old and had initially given a statement. She later provided a doctor’s note stating that forcing her to testify about the incident would be detrimental to her health and cause severe emotional distress. Her initial statement confirms that she never saw Girl #1 until she hit her.

Girl #1 was hit by the van on the front passenger side corner, indicating that she was almost all the way across the lane when she was hit.

Girl #1 was not wearing a helmet and was thrown onto the hood, hit the windshield and was launched into the air, landing in a ditch, where she was found unconscious. She suffered a brain stem injury, head fracture, brain hemorrhage and multiple compound fractures of the right leg. She remained in the hospital for 90 days. She was released with weakness of all four limbs and was in minimally responsive states, requiring maximum assistance with all activities of daily living. She remains on a feeding tube and school records show that she

attends a special education program.

The defense position was that the insured’s failure to act was reasonable in that she had no time to see and react to the sudden movement of the bicyclist. A suit was filed and the final decision was that the insured should have had time to observe the plaintiff, Girl #1, and take evasive action. The claim was ultimately closed with RLI paying $681,000.

Scenario #3: The claim arises out of a boating accident.

Policyholders are the owners of a speedboat, which is considered a “family” boat and made available to other members of the family for recreational use.

Several family members were camping at a lake near the policyholders’ residence. One of the policyholders allowed them to use the boat during their stay. The policyholders’ 15-year-old grandson was allowed to take three other family members (all minors) out on the lake to go tubing. The 10year-old claimant had just finished tubing. The tube and tow rope were placed in the stern of the boat and the claimant was sitting next to them.

The conditions on the lake suddenly became very choppy and windy. The claimant was ejected from the rear of the boat along with the tube and the tow rope. The tow rope wrapped around the claimant’s neck, causing a significant injury. The occupants of the boat recovered the claimant and headed for the dock, flagging down the Sheriff’s patrol boat on the way. The claimant lost consciousness and the deputy had to administer CPR several times. She was airlifted to the hospital.

The claimant suffered an injury to her neck, her trachea, esophagus and a fracture of the second cervical vertebrae. She was in ICU for almost a month and on a ventilator for 96 hours.

Later, she developed serious complications to her pancreas, colon and gall bladder and suffers from ongoing extreme hoarseness with continued pulmonary troubles with her breathing. The RLI Personal Umbrella Policy contributed $700,000 in addition to the primary coverages.

Scenario #4: The PUP insured’s 26-year-old daughter was driving the insured vehicle, pulled out from a stop sign and struck the claimant’s vehicle that did not have a stop sign. The insured’s daughter was cited for failure to yield. The Plaintiff (age 17) sustained multiple fractures to her jaw, scarring to the forehead, severed left ear and a dental injury. She spent seven days in the hospital and hospital records confirm memory loss and a combative disposition.

Underlying auto limits of $250/$500 were in place and the insured’s daughter was listed 28

South Carolina Agent & Broker • Spring 2010

specifically on the RLI PUP application as a driver. RLI ultimately paid $500,000 under the PUP policy.

Scenario #5: The insured, age 59, was employed to care for an 8-month-old infant. While attempting to negotiate a curve in her car, she crossed the center line and struck head-on a pickup truck pulling a trailer carrying construction equipment.

The only witnesses are the two 19-year-old occupants of the truck. They both state the insured vehicle appeared to be traveling too fast for road conditions. The insured has no memory of the event. There are indications that the insured had experienced blood-sugar-level problems in the past. A Hypoglycemic attack may have contributed to this accident.

The infant died later that same day at a children’s hospital from injuries received in this accident. Her medical bills were approximately $60,000. Her parents are college-educated, and the mother is in the insurance industry. They contend that their daughter would have obtained at least an undergraduate degree and earned at least $80,000 per year from ages 24-62. The two 19-year-old occupants of the truck were injured, but their claims settled within the underlying auto policy. The claim was ultimately settled, with the RLI PUP portion at $550,000.

For more information about offering a stand-alone Personal Umbrella Policy to your clients, contact Charlene Bernotas, IIABSC Agency Administrator, at 803.731.9460 x22 or cbernotas@iiabsc.com.

There’s no business like small business…

And we know small business.

AmTrust North America provides your clients the excellent workers’ compensation coverage they need for their small business—it’s our primary focus. We offer:

• • • •

A- (Excellent) rating from A.M. Best A fast, convenient online system for submitting business Personal attention from experienced underwriters In-house, paperless claims processing

Have you submitted business with AmTrust lately? Call 877.528.7878 or visit www.amtrustnorthamerica.com for more information about what AmTrust can offer you.

We’re (sm)all business.SM Spring 2010 • South Carolina Agent & Broker

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Insurance

A

– Reduction and Reformation of Coverage

s I started this article I had to remind myself that most independent retail insurance agents do not specialize in writing Flood Insurance. However, many write flood insurance as an accommodation to those property owners located in Special Hazard Areas. As a result we may not pay quite as much attention to some obscure policy conditions and rules such as the title of this article.

I ran into an interesting situation a few weeks ago and felt it was worthy to share. I’m sure any insured that had this happen would have wished someone had shared it with them. Let’s look at the story…

An insured purchases a home that is located in a Special Hazard Zone. The Flood Zone was A8 with a base flood elevation of 15. This simply means that in order to qualify for flood insurance at reasonable cost (in this situation about $400) there can be no enclosed area below the 15′ mark that is not adequately vented and meets all National Flood Insurance Program construction rules. The insured obtained an Elevation Certificate and inspection showing that all conditions were met.

The agent wrote the flood insurance policy accordingly and all was well.

About two years later the insured decides to convert the back portion of the garage into two bedrooms. I know what you are thinking: Why in the world would they have done that?

The reason is simple—they didn’t know the flood insurance implications.

When this situation arises, the “Reduction and Reformation of Coverage” policy language is activated. There are two situations we need to address. When we find out about the changes: (1) before the loss takes place, or (2) after the loss has taken place.

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By Terry Tadlock, CIC, CPCU, CRIS CIC Education Consultant

South Carolina Agent & Broker • Spring 2010

Before the loss The policy states: 2. The policy can be reformed to increase the amount of coverage resulting from the reduction described in G.1. above to the amount you requested as follows: a. Discovery of insufficient premium or incomplete rating information before a loss. (i) If we discover before you have a flood loss that your premium payment was not enough to buy the requested amount of coverage, we will send you and any mortgagee or trustee known to us a bill for the required additional premium for the current policy term (or that portion of the current policy term following any endorsement changing the amount of coverage). If you or the mortgagee or trustee pay the additional premium within 30 days from the date of our bill, we will reform the policy to increase the amount of coverage to the originally requested amount effective to the beginning of the current policy term (or subsequent date of any endorsement changing the amount of coverage). (ii) If we determine before you have a flood loss that the rating information we have is incomplete and prevents us from calculating the additional premium, we will ask you to send the required information. You must submit the information within 60 days of our request. Once we determine the amount of additional premium for the current policy term, we will follow the procedure in G.2.a.(1) above. (iii) If we do not receive the additional premium (or additional information) by the date it is due, the

For more information please contact Gary Cornell at 866-669-0937 ext 25404, or at gcornell@primeratepfc.com

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Adam H. Phelps Phone: 803-609-4498 Fax: 864-542-0723 aphelps@cscagentnet.com www.cscagentnet.com Spring 2010 • South Carolina Agent & Broker

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amount of coverage can only be increased by endorsement subject to any appropriate waiting period.

As you can see there is no great risk if this situation were discovered before any loss takes place. The insured would simply notify the carrier that the rating information has changed due to the enclosure and they would have 30 days to pay the additional premium. The problem is going to be the amount of the additional premium. In our situation it was about $3,000. If the insured fails to pay the premium then the policy can only be changed by endorsement and would have to comply with the 30-day waiting period. If the additional premium is not paid the policy would remain unchanged, and if a loss occurs the following rule would apply.

After the loss The policy states: b. Discovery of insufficient premium or incomplete rating information after a loss. (i) If we discover after you have a flood loss that your premium payment was not enough to buy the requested amount of coverage, we will send you and any mortgagee or trustee known to us a bill for the required additional premium for the current and the prior policy terms. If you or the mortgagee or trustee pay the additional premium within 30 days from the date of our bill, we will reform the policy to increase the amount of coverage to the originally requested amount effective to the beginning of the prior policy term. (ii) If we discover after you have a flood loss that the rating information we have is incomplete and prevents us from calculating the additional premium, we will ask you to send the required information. You must submit the information before your claim can be paid. Once we determine the amount of additional premium for the current and prior policy terms, we will follow the procedure in G.2.b.(1) above. (iii) If we do not receive the additional premium by the date it is due, your flood insurance claim will be settled based on the reduced amount of coverage.

The amount of coverage can only be increased by endorsement subject to any appropriate waiting period.

As you can see this is not as simple. If the insured has a loss 32

South Carolina Agent & Broker • Spring 2010

they will be notified that the policy was rated incorrectly. They will then be given 30 days to pay the deficient premium for both the current year as well as the previous year (In our situation that would be approximately $6,000). This may seem harsh, but there are few policies that let you pay a premium after the loss and receive full policy benefits.

Now to the worst news! If the premium is not paid the loss will be settled based on the amount of coverage the premium paid will purchase if the rating was correct. In other words, in our situation, how much coverage would the $400 premium buy if the policy were rated correctly based on the home with alterations? The answer is almost none! This situation leaves the insured with virtually no flood insurance or a very large additional premium to pay before the loss will be paid. Either situation will result in an insured that is in a bad mood.

There is one additional phrase in the “Reduction and Reformation of Coverage” policy language that concerns me.

It is very subjective, but could result in the claim being denied outright.

3. However, if we find that you or your agent intentionally did not tell us, or falsified, any important fact or circumstance or did anything fraudulent relating to this insurance, the provisions of Condition B. Concealment or Fraud and Policy Voidance apply.

This language would allow the NFIP to deny the claim entirely if they feel the insured or the agent intentionally concealed the fact the home was altered and the carrier was not notified.

What should we make of this tale? When writing flood insurance where elevation could become an issue it would not be a bad idea to notify the insured that the “Reduction and Reformation of Coverage” provision may result in significant penalties if the home is altered in a way that changes the base flood elevation. I just don’t want the insured coming back to the agent after the loss and blaming them for not explaining this penalty. Then document the file and hope for the best.

Just what you needed… one more thing to worry about!

Terry is the education consultant for the CIC program in North and South Carolina. He is also a member of the CIC National Faculty. He is currently the President of Florida Insurance Educators, Inc., an insurance education and consulting firm that provides a variety of education courses and consulting services.

In addition, Terry has spoken at state conventions and has written several publications for state and national associations.

CAUTION:

ROADC WORK N O I T U AHEAD A C AUTION

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C

here are certain things we do in life that require an extra degree of caution and attention to detail, like driving an icy road, handling poisonous snakes, choosing an engagement ring, walking on hot coals and in extreme cases, writing coverage for general contractors.

Contractors present a number of potential risks to insurers and their agents; this we have always known. Today’s insurance environment for this class, however, is not what it used to be.

If you want to dabble in something try oil painting or rock tumbling rather than insurance for construction contractors.

Writing this line of business without a good sense of the market, a keen eye for exclusions and a willingness to know and communicate in writing with your customer can be treacherous.

Given the current economy, contractors have been forced to wear many hats, resulting in frequent changes in exposure for the carrier. The cost of doing business, materials and the complications with sub-contractors has forced this group to become more streamlined. One day your roofing contractor is a framer and then again could be doing electrical work. Not wanting to get caught with exposures they did not have the opportunity to underwrite and price, insurers have developed niche exclusions such as the limitation of coverage to declared class codes and another for declared job sites. Being aware of these nuances, communicating them to your customer along with written documentation of the discussion is a must for writing a profitable book of contracting business and avoiding serious E&O claims.

While some admitted carriers will provide minimal coverage for this class, approaching the non-admitted sector requires an even greater degree of care. Exclusions such as no coverage for prior completed or abandoned work are standard.

This means that if your contractor’s work was completed prior to the effective date you wrote their policy, there is no coverage for bodily injury, property damage and personal and advertising injury. The same goes for work abandoned by the contractor prior to the effective date of coverage. Why did this exclusion come about? It’s similar to an exclusion for prior claims; insurers are not willing to pick up unknown or sleeping exposures that may be lingering within a job site that have not been previously underwritten by them. They are also 34

South Carolina Agent & Broker • Spring 2010

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IO T U A

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not willing to cover abandoned job sites (for fairly obvious reasons), but also because of the Montrose rule wherein all carriers in all policy terms must participate in a construction defect claim.

How about coverage for subcontractors? After 1986, ISO forms provided coverage for construction defect caused by subcontractors, unless excluded by endorsement. This was known as Broad Form Property Coverage. The intent was to provide general contractors with defense and indemnity in the event of a construction-related lawsuit. This is rarely the case anymore. Insurers, particularly non-admitted carriers, regularly attach their own exclusions to the policy with respect to subcontractors. Due to the lack of enforced regulation, nonadmitted carriers have the freedom to amend their policies without notice. Or, they may report changes one time, leaving you to stay on top of the most current coverages available. As with many claims, edition dates can make or break you as the marketplace quickly adapts and evolves.

The contracting business has many moving parts, and so does coverage for it. Has anyone ever told you not to forget your umbrella? This is good advice. In a recently settled lawsuit, an agency wrote the General Liability coverage for a very large real estate developer. The primary carrier’s policy did not contain an exclusion for completed operations, but the umbrella policy did. In moving the client’s umbrella coverage, the agent failed to notice the exclusion, the broker failed to inform the agent, and the carrier was under no obligation to point out that the umbrella was not a follow-form type. The allegation against the agency, which ultimately resulted in a large settlement, was failure to place coverage with an adequate broad form policy. A good portion of the settlement dollars fell on the agency for what was determined to be an error in not obtaining proper coverage.

If you’re looking to spend some quality time with a policy form and can sort through the exclusions, you are an excellent candidate for selling contracting business. If you’re willing to discuss these exclusions and special coverage scenarios with your client and document those discussions in writing, you just might escape the perils of a serious E&O claim. If not… well, may the road ahead of you be sunny and clear.

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IIABSC Construction Risk and Insurance Specialist Classes start in June The Construction Risk and Insurance Specialist (CRIS) program is a specialized curriculum focusing on the insurance and risk management needs of construction projects and contractors. To obtain the CRIS certification, you complete five courses on construction risks and insurance.

• Designed especially for insurance contracting risks.

• Classes can be taken in any order.

• Exams are open book and taken at your leisure (NOT in class).

• Each course filed for 6 hours P&C credit,

$150 members/ $180 nonmembers

Property Insurance for Contractors June 15, Columbia This course examines the coverage provided by three types of property insurance policies: commercial property policies, builders risk policies, and contractors’ equipment policies.

Commercial Auto, Surety, CIPS & Miscellaneous Lines September 28, Columbia This course begins with a description and brief analysis of the typical structure and format of a contractor’s insurance program. It provides an overview of various additional coverage needs of many contractors. In addition, this course provides an overview of two special areas of importance for contractors-consolidated insurance programs (CIPs) and surety bonds.

Contractual Risk Transfer in Construction October 28, Columbia This course provides a general overview of contractual risk transfer in construction contracts and subcontracts, with specific attention to those provisions that present risk and insurance implications for contractors.

Commercial Liability Insurance for Contractors July 15, Columbia This course examines each of the three coverage parts of the commercial general liability (CGL) policy-bodily injury and property damage (Coverage A), personal and advertising injury (Coverage B), and medical payments (Coverage C) including the insuring agreement and exclusions.

Workers Compensation for Contractors August 18, Columbia This course is designed to provide detailed information on workers compensation and employers liability insurance.

Spring 2010 • South Carolina Agent & Broker

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Build a Web Presence Worthy of 2010 Think of your agency’s web site as another door to your office. Clients and prospects “stop in” to find out more about business, meet your staff and decide whether they want to talk more. By taking a few steps to encourage them to “come on in,” you can attract new business.

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By Matthew Marko Marketing Process Manager, Progressive Insurance

he day you hung your first sign outside of your office you took the step to say, “We’re here.” By taking the same pride in building an agency web site, you tell online visitors that you are open for business.

Auto insurance is one of the most shopped-for products on the Internet, and interest is growing. Seventythree percent of people use the Internet to search for insurance information, but 67 percent still prefer to buy from a local agent1. It should be clear that locals are searching for your agency. If they can’t find you, they may call an agency down the street.

Start by building a quality site Whether you develop a site on your own or use an outside resource, your site should: •

•

Reflect your agency’s brand. Clearly set your agency apart from others in your area. Show your logo, local office and team members’ faces rather than generic stock photography. Talk about what makes your agency unique. Include customer testimonials.

Show all of the ways customers can interact with you. Include real-time online quoting, phone number, address with a map, an e-mail address and a short

1 ComScore, April 2009

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South Carolina Agent & Broker • Spring 2010

contact form. Our company, as well as others, offers a real-time online quoting banner agents can place on their site. Some comparative rating vendors offer tools you can put on your site to enable consumers to get online multiple quotes that then feed into your agency rater.

•

Provide easy ways for customers to make selfservice changes. This can be as easy as providing a link to your carriers’ online self-service sites or a form for your customers to fill out that is automatically routed to you.

•

Incorporate search engine optimization (SEO). SEO is the technical term for moving your listing up the ladder on sites like Google, Yahoo, Bing and others.

The higher your listing appears on the page when someone types in “[Your City] insurance,” the more likely people will click on that link. We’ll talk more about SEO in the next section of this article.

•

Be built with measurement in mind. Google Analytics, a free service, can tell you how people arrived to your site, what pages received the most attention, the key words people typed in search engines to find you and other valuable information. A professional Web development partner can link Google

coverage to bring you

this commercial.

....................................................................................

we interrupt our regular

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ries.

m entucky, nnessee.

Spring 2010 • South Carolina Agent & Broker

37

Analytics to your site or you can do it yourself by visiting www.google.com/analytics.

•

Be personal and be local. Your neighbors are looking for a hometown resource. Your site should have links to other local businesses and organizations. Reference the areas you serve and clearly show that you are committed to your community.

•

Be updated regularly. No prospect or customer wants to visit an outdated web site, and, just as importantly, search engine rankings reward sites that are frequently updated.

Try to post new content to your site at least once a month.

Better yet, start a blog on your site where you answer common insurance questions, describe your agency’s involvement in the community or share local news and events.

Broaden your reach A quality web site is a necessary first step. It is your agency’s Internet “hub,” the place you want online users to eventually reach—whether they get there from an Internet Yellow Pages listing, a search engine, a carrier web site or a social media site like Facebook. But it’s equally important that you constantly work to attract people to your site.

When someone types in a business name or “[Your City]

insurance” into Google or Yahoo, some of the top listings that show up are “local listings.” Try it. Type your agency name and city into one of those sites and see where you end up on the list—if at all.

Local listings are like Internet phone books that show your company’s phone number, address (sometimes even a visible map of your area), background information and web site. These listings are free, but you have to claim them and check them for accuracy and consistency.

Our company [Progressive] has run agent surveys indicating that fewer than 1 in 5 of independent agencies have claimed free online local listings. Don’t let your agency miss this high-impact opportunity.

To start, claim your free local listings at Google, Yahoo! and Bing. (Tip: to get started on Google, for example, type “Google local listing” into the Google search engine and select the Google Local Business Center.) Make sure your agency information is consistent and accurate, that each listing links back to your agency web site and that you choose appropriate business categories and keywords. Take note of how your highest-ranking local competitors are listed and mirror that format.

Your agency also should claim free listings at localeze.com, infousa.com, yellowpages.com and superpages.com—the more listings your agency claims, the better.

S E C U R I T Y

T

he National Security Group has always been committed to helping others feel secure in times of need, and we’ve been doing just that for over sixty years. Our relationship with our policyholders is only equaled by our relationship with our agents, providing them with a partnership profit sharing program and an award-winning web site that enables 24/7 realtime policy info, fast online quotes, and endorsement and policy dec page printing to name a few. Talk with us today and discover why thousands of policyholders depend on us to insure their world. Call 1-800-239-2358 or visit us on the web at www.nationalsecuritygroup.com.

Dwelling Fire • Limited Homeowners • Mobile Homeowners • Vacant Dwelling Life and Health • Partnership Profit Sharing

38

South Carolina Agent & Broker • Spring 2010

NOW E! L A AV ILABnt Vaca g Dwellin

Attract “searchers” Next, help people find your web site when they perform searches on sites like Google and Yahoo! for common insurance terms. That’s called “Search Engine Optimization” and it’s driven by two main factors: your content and web sites that link to yours. You can control both.

Use Google Analytics and Google Keywords to better understand the words people use to search for insurance in your area. For example, if you have an agency in Boca Raton, Fla., and you discover that people search for “Boca Raton insurance” most, those three words need to be integrated into your home page copy.

To boost SEO: • Create separate pages for each product line.

•

Write for humans. Tell people exactly what you offer and why you’re the best. Integrate search terms, but don’t repeat them.

•

Work with a local Web development partner that can improve your SEO. Behind-the-scenes metatags, linkbuilding strategies, keyword optimization and other tactics can improve your search engine rankings. Ask for local references of any partners you consider.

•

Link to carrier sites and ask carriers to link to yours.

For example, all of our agents can be linked to and from our agent locator site.

•

Start a Facebook “fan” page and be sure to have a listing on LinkedIn. These social networking sites also feed search engines.

Keep them coming back Agents most successful on the Internet are those who invest ongoing time and money in their online presence. These agents respond quickly to online inquiries. They designate team members to keep content fresh and regularly check online listings for consistency. And, most of all, they measure their results with online analytics and by the business generated through Internet activities.

[Editor’s Note: Please visit the “Websites & Social Media” quick link at www.iiaba.net/act for more tips on web sites, search engine optimization, blogs and other social media issues.]

Matthew Marko is a Marketing Process Manager for Progressive Insurance. He works to provide local marketing strategies, tools and co-branded collateral to help independent agencies grow their businesses. E-mail him at matthew_marko@progressive.com.

For more information about ACT, contact Jeff Yates, ACT Executive Director at jeff.yates@iiaba.net. This article reflects the views of the author and should not be construed as an official statement by ACT.

Spring 2010 • South Carolina Agent & Broker

39

Conducting an Image Audit

B

efore an agency can successfully improve its brand, it is important to understand that brand’s present value. One key means of benchmarking your agency’s current reputation is through a careful and objective review of your reputation within the context of your marketplace. This must-do activity will help you identify the strengths and weaknesses of your agency’s brand through three activities: 1. Constituent surveys.

2. Assessment of “image bearers.”

3. Competitive analysis.

Constituent surveys Begin by assessing your agency’s reputation through the eyes of customers and stakeholders. Don’t assume that you know what it is; what you believe likely is different from the opinions of customers and partners. Ask your customers—favorites and not-so-favorites—what they think your agency does well and what needs improvement. Ask former clients why they left and get beyond price. Quiz your staff, especially those who interact daily with customers, prospects and partners to learn what people say about your agency when they call or visit. Also, ask the thoughts of colleagues in your area’s business community, and don’t forget to ask insurance company partners their opinions.

Mailed or online questionnaires can be used to collect this data, but the best approach is one-on-one interviews. Focus groups can be helpful if they are facilitated by a professional, to ensure that some participants don’t dominate the conversation (and thereby, the findings).

Once you get the data, organize it into key descriptive phrases. Such as, do people think your agency is: · Solid and steady or fly-by-night? · Old-fashioned or cutting-edge? · A generalist or a specialist? · Apathetic or customer-focused?

40

South Carolina Agent & Broker • Spring 2010

By Jay G. Taylor, CIC IIABSC Trusted Choice Committee Chairman ®

· · · ·

Solid and steady or fly-by-night?

Old-fashioned or cutting-edge?

A generalist or a specialist?

Apathetic or customer-focused?

Using key phrases—instead of reams of feedback—will make the next two steps more manageable.

Image Bearers Now study your agency’s “image bearers”—anybody or anything that communicates something about your agency to customers, prospects and partners. This includes employees, your offices and all promotional vehicles.

Start with promotional items: signage; brochures; stationery; calls-on-hold messages; web site; calendars; radio, TV and print ads; and even logo items such as golf shirts and coffee mugs. Lay them out on a table and evaluate their accuracy, currency and presentation consistency. Check for outof-date information, such as company partner lists, staff names, phone numbers and e-mail and web site addresses.

Now look to see if there is consistency in colors, layouts, typefaces, logos, slogans and quality of materials. If your promotional items look like they represent different businesses, it’s time to start over. Tip: Effective brand communication tools must have consistency in look-and-feel and messaging so customers and prospects intuitively think of your agency.

Consider which items are effective communicators, which fit the image you’d like your agency to have and get rid of the rest.

Now check out your agency offices. Examine the space closely. Is the outside welcoming, and does it convey success? Inside, is it clean, professional and organized, or are desks cluttered and the plants halfdead? Are the magazines in your reception area two years old, or do the publications reflect that the agency is professional and current on insurance and financial services issues? Remember, how your office appears will affect how your employees behave—and ultimately how they will treat customers.

Speaking of staff, look at their appearance, too. Has the casual dress code slipped, or do your employees look professional? Your staff must communicate the image you want your agency to have. In all the research the Big “I” has conducted, the employees of an agency rank as the most important element in building customer trust. Thus, all your communications materials should show off your staff: principals, producers and service staff. Even if it means you’ll have to reprint items as staff changes, it’ll be worthwhile.

Once you’ve established your agency’s image, determine how it holds up against your branding goals and the 10-point Trusted Choice® Pledge of Performance.

Is your agency’s reputation close to your ideal and the Pledge, or do you have significant “repair work” to do?

Are your goals realistic given your agency’s resources and current image?

Competitive Analysis To fully comprehend your agency’s image, you should not consider it in a vacuum, but as compared to your competition. Identify your firm’s primary competitors and ask: How do these agencies describe themselves in their “image bearers” (web site, advertising—anything you can get your hands on)? How do others view them? Ask your producers what kind of feedback they are getting when they lose accounts. Ask your business colleagues what they hear about these other firms. Use Google, Yahoo or other search engines to see where they show up in the media.

When you’ve gathered this information, consider how you measure up to these competitors. Will the attributes you’ve chosen to build your brand around overcome their position in the marketplace?

How you answer these questions will help you determine what steps you should take internally and which communication vehicles to use in your agency’s branding efforts. See Trusted Choice® Zoom into Branding (available for download off www.trustedchoice .com) for ideas.

Spring 2010 • South Carolina Agent & Broker

41

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Spring 2010 • South Carolina Agent & Broker

43

Calendar For course descriptions and full 2010 calendar, see our Education & Event calendars at www.iiabsc.com

May

September

6

CISR Personal Residential, Greenville, 7 hrs P&C

11

Business Practices & Procedures, Charleston, filed for 6 hrs. P&C or L&H 2

Surplus Lines Markets & Practices, Bluffton/ HHI, 6 hrs. P&C

12

SC Agent Technology Conference, Columbia

15

CISR William T Hold Commercial Lines, Charleston, 8 hrs. P&C

13

Business Practices & Procedures, Columbia, filed for 6 hrs. P&C

16

CISR Personal Auto, Greenville, 7 hrs. P&C

18

AAI – 81A, Columbia, 7 hrs. P&C or L&H

21

CISR Commercial Property, Bluffton/HHI, 7 hrs. P&C

19

Surplus Lines Markets & Practices, Columbia, 6 hrs. P&C

28

CRIS Auto, Surety, CIPs & Misc. Lines, Columbia, 6 hrs. P&C

20

CISR Personal Auto, Charleston, 7 hrs. P&C

29-30

CIC Agency Management (days 1&2), Myrtle Beach, 16 hrs. P&C

26

Commercial Lines Nuts & Bolts, Columbia, filed for 6 hrs. P&C

or L&H and 4 hrs. Ethics

27

Commercial Lines Nuts & Bolts, Columbia, filed for 6 hrs. P&C

28

Commercial Lines Nuts & Bolts, Columbia, filed for 6 hrs. P&C

June

1

CISR Agency Operations, Columbia, 6 hrs P&C or L&H, 1 hr. Ethics

October 1

CIC Agency Management (day 3), Myrtle Beach, 16 hrs. P&C or L&H, and 4 hrs. Ethics

3

CISR Personal Auto, Bluffton/HHI, 7 hrs. P&C

6

AAI – 82A, Columbia, 7 hrs. P&C

15

E&O Risk Management, Greenville, 8 hrs. P&C or L&H

7

CISR William T Hold Personal Lines, Columbia, 8 hrs. P&C

15

CRIS Property Ins for Contactors, Columbia, 6 hrs. P&C

13

CISR Agency Operations, Greenville, 6 hrs. P&C or L&H, 1 hr Ethics

16

AAI – 81B, Columbia, 7 hrs. P&C

14

CISR Commercial Casualty, Rock Hill, 7 hrs. P&C

16

Workers Compensation, Greenville, 4 hrs. P&C

24-26

Annual Convention, HHI

16

Certificates of Insurance, Greenville, 3 hrs. P&C

28

CRIS Contractual Risk Transfers, Columbia, 6 hrs. P&C

23

CISR Commercial Property, Columbia, 7 hrs. P&C

23-25

CIC Personal Lines, Charleston, 20 hrs. P&C

November

28-29

SC Trusted Choice Big “I” National Championship, Orangeburg

3

Surplus Lines Markets & Practices, Columbia, 6 hrs. P&C

4

CISR Personal Residential, Charleston, 7 hrs. P&C

9

E&O Risk Management, HHI, 8 hrs. P&C or L&H

CISR Commercial Casualty, Greenville, 7 hrs. P&C

9

CISR William T Hold Commercial Lines, Greenville, 8 hrs. P&C

15

Surplus Lines Markets & Practices, Myrtle Beach, 6 hrs. P&C

10-12

CIC Personal Lines, HHI, 20 hrs. P&C

20

CRIS Liability Ins for Contractors, Columbia, 6 hrs. P&C

16

AAI – 82B, Columbia, 7 hrs. P&C

21

AAI – 81C, Columbia, 7 hrs. P&C

17

CISR Personal Auto, Columbia, 7 hrs. P&C

21

CISR Commercial Property, Charleston, 7 hrs. P&C

18

CISR Personal Auto, Myrtle Beach, 7 hrs. P&C

22

CISR Personal Residential, Rock Hill, 7 hrs. P&C

29-31

Young Agents Conference, Myrtle Beach

®

July 14

August

December 8

CISR Commercial Casualty, Columbia, 7 hrs. P&C

9

CISR Agency Operations, Charleston, 6 hrs. P&C or L&H, 1 hr Ethics E&O Risk Management, Columbia, 8 hrs. P&C or L&H AAI – 82C, Columbia, 7 hrs. P&C

4

CISR Personal Residential, Columbia, 7 hrs P&C

14

10

CISR Personal Residential, Myrtle Beach, 7 hrs P&C

16

11

CISR Personal Auto, Florence, 7 hrs P&C

18

CRIS Workers Comp for Contactors, Columbia, 6 hrs. P&C

25-27

CIC Commercial Casualty, Columbia, 20 hrs. P&C

31

E&O Risk Management, Myrtle Beach, 8 hrs. P&C or L&H

44

South Carolina Agent & Broker • Spring 2010

DON’T GET BITTEN

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DON’T BE ON THE HOOK FOR: Failing to procure coverage requested by the client Not adequately identifying client exposures Failing to provide timely notice of a claim to the carrier

Log on today to fish for E&O claims frequency data, real-life case studies and analysis, sample client letters, sample agency procedures, agency E&O self assessments, podcasts on important E&O topics, and much more.

Misrepresenting or not explaining policy provisions Providing inaccurate information to carriers Failing to properly add additional insureds or loss payees

Spring 2010 • South Carolina Agent & Broker

45

2010 Board of Directors

Executive Committee Chairman Kathy D McKay, CIC, CPIW McKay Stelling & Assocs Mt. Pleasant, SC kmckay6681@aol.com Chairman Elect/ Treasurer W. Ashley Brady, CIC First Charter Co., Inc Marion, SC abrady@firstcharterins.com

Secretary Kenneth A. “Ken” Finch, CPCU, CIC, CRM, AAI Countybanc Insurance Greenwood, SC kfinch@ecountybanc.com

Immediate Past Chairman Julius J “Jules” Anderson, Jr., AAI Anderson Ins Assoc Charleston, SC janderson@aiasc.com

National Director John R Braddy, CIC, AAI Braddy Insurance, Inc. Dillon, SC jbraddy@braddyinsurance.com

Directors Thomas M. Bates, Jr. (Tom) Herlong Bates Burnett Insurance Greenville, SC tom@herlongbatesburnett.com

R. Scott Moseley Irmo Insurance Agency Irmo, SC scotirmo@bellsouth.net

Faye R. Bradham, LUTCF Bradham Ins Agency Conway, SC fbrayins@aol.com

Edward S. Spivey, CIC, AAI (Spider) Howard B. Smith Agency Mullins, SC espivey@hbsmithagency.com

David A. Cyphers, CIC, AAI Sifford-Stine Insurance Clover, SC dcyphers@sifford-stine.com

James G. “Jay” Taylor, Jr., CIC Kinghorn Insurance Agency of Beaufort Beaufort, SC jtaylor@insurancebeaufort.com

Larry G. Joyner, CIC, AAI CWS Ins Agency Spartanburg, SC larry@cwsinsurance.com Charles Paul Midgley, Jr. Midgley Agency Bennettsville, SC cpmidgley@mecsc.net 46

South Carolina Agent & Broker • Spring 2010

Christopher “Chris” T. Tidwell, CPCU, CIC Tidwell Agency Lexington, SC chris@tidwellagencyinc.com

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