Primary Agent - January 2011 - DE Edition

DELAWARE

Freshyear,fresh start

INTHISISSUE:–––––––––––––––

11 resolutionsfor 2011

G18039_Jan2011Cvrs.qxp:Jan2011Primary 12/15/10 7:28 PM Page 1

trust.

acuity.com

G18039_IFC-IBC-OBCJan2011.qxp:Layout 1 12/15/10 7:34 PM Page 1

Insurance for RestaurantsFamily Style, Pizza Shops, Take-Out, Fast Food, Donut Shops,

Diners, Cafes, Bagel Stores, Franchises

Brokers Surplus Agency wants to quote your restaurants!

We have a terrific BOP program that’s packed with the coverages you need.New Ventures eligible!Liquor liability coverage available!

Contact us by phone or email today!(215) 443-9900

Brokers Surplus AgencyP.O. Box 2849

Warminster, PA 18974

Dennis Marsaglia, Ext. [email protected]

Evelyn Frisch, Ext. [email protected]

G18039_01-11PrimAgJan2011.qxp:January2011 12/15/10 7:53 PM Page 1

11 Resolutions for 2011

IA&B simplifies making — and following through on – your resolutions. The next pages detail the top 11 resolutions for agencies and the tips and tools to check them off your list.

Page 12

Employee handbooks ... more than a paperweight

Handbooks are not legally required documents, but they do clarify rules, regulations and practices.

Page 22

12

ContentsP R I M A R Y A G E N T M A G A Z I N E

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

Subscriptions: Non-member price: $2.25 per copy or $15 per year.

All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two monthsprior to publication. Advertising rates furnished upon request.

Address inquiries to:Primary Agent EditorPO Box 2023Mechanicsburg, PA 17055-0763Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347

Periodical postage paid at Mechanicsburg, Pa. and additional entry post office.

Postmaster: Send address changes to above address.Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2011-1) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

4 Chair of the Board’s Message5 Member FAQ6 State News8 Preventing Errors & Omissions10 Coverage Corner11 Glance at Events

25 IA&B Partners26 Technology Update28 Advertisers Index28 Classified Ads28 Last & Least

In every issue

Mission StatementPrimary Agent delivers ideas to helpInsurance Agents & Brokers’ membersnegotiate their unique position asguardians of trust between insuranceconsumers and companies whilefacing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission topreserve and advocate the AmericanAgency System.

That’s

w

With our “A” Rated Treasury Listed bonds wec Why shopa If we can’t writet We specialize in bonding those “less than p

We’ve beenw N And by the way, we’ll even write thatb Call now and get results not excuses.

22


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

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

The place for the hard-to-place Bonds


OfficersDavid Rosenkilde, CIC

Chair of the BoardReisterstown, Md.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-PVice Chair of the BoardWest Chester, Pa.

Kathleen M. Glattly, ChFC, CLU, CPCUImmediate Past Chair of the BoardFactoryville, Pa.

MembersJoyce M. Bailey, CIC, CRM, CPIW

Newark, Del.

Norman F. Basso, CPCUYork, Pa.

Vincent D. “Chip” Boylan Jr., CPCURockville, Md.

Henry “Butch” Bradley, Jr.Crofton, Md.

Timothy P. BurrisThompsontown, Pa.

John T. “Chip” Colwell Jr., CICCorry, Pa.

N. Lee Dotson, CIC, AAIWilmington, Del.

John L. FrankenfieldTelford, Pa.

G. Greg Gunn, CICLemoyne, Pa.

Diana M. Hornung-Momot, ACSRWilmington, Del.

Jocelyn R. Howard-Sinopoli, CIC, CISRButler, Pa.

Robert S. Klinger, LUTCFGermantown, Md.

Michael F. McGroarty Sr.Pittsburgh, Pa.

Ann Gallen Moll, CICReading, Pa.

Scott C. Rogers, CPIAYork, Pa.

Susan A. Sallada, CIC**Ft. Washington, Pa.

David B. Wasson Sr., CICState College, Pa.

James M. Watkins*Dover, Del.

King W. “Kip” White, LUTCFFallston, Md.

* IIABA National Director** PIA National Director

Board of Directors

How to be resolute in achieving resolutions

Welcome to 2011!

Most of us will start this year, like every other, on a positive note.We’ll look ahead and hope for the best: a hardening of the market,a loosening of government’s regulatory grip, a shortening of our to-do list.

And many of us optimistically will tackle New Year’s resolutionswith gusto. We’ll lace up those running shoes, pack salads forlunch and pass up leftover Christmas cookies.

Of course by mid-January, most things will return to the status quo.We’re only human, after all. (And those Christmas cookies hold upsurprisingly well.)

This year IA&B has taken it upon itself to make a few resolutionsfor us. Go ahead, and compare your own resolutions with the onesIA&B outlined for you in this issue of Primary Agent magazine. You likely will find overlap.

Since IA&B has a vested interest in our success, they’ve taken theresolutions one step farther. Each one includes a cheat sheet —tips and links to resources that will give us a leg up on seeing them through.

So put down those stale cookies, and pick up a pen and paper tobegin outlining your approach to tackling these 11 resolutions. You won’t be sorry.

Until next time,

Dave

[ 4 ]

David B. Rosenkilde Sr., CIC

Chair of the Board’sM E S S A G E


?QUESTION: Are there any issues and/or bestpractices on handling certificates with a Blanket Additional Insured Endorsement?

ANSWER:This is an excellent question. Blanket additional insuredendorsements have great advantages, but they can give a false sense of security and should not be handled casually.

The most commonly used endorsements are ISO’s CG 20 33 0704 (“Owners, Lessees or Contractors — Automatic status whenrequired in Construction Agreement with You”), and CG 20 34 0707 (“Lessor of Leased Equipment — Automatic status whenrequired in Lease Agreement with You”).

What’s the upside?Less red tape! The main upside of a blanket additional insuredendorsement is that it limits the administrative work associatedwith frequent requests for additional insured status, since theendorsement grants automatic coverage when agreed to in awritten contract.

What’s the downside?There are a couple of things to keep in mind:

w There must be a written contract requiring the AdditionalInsured to be added to the Named Insured’s policy: nowritten contract (and proper provision), no additionalinsured status!

w Coverage provided by the blanket endorsement may notmeet the contractual requirements. In this respect,particular attention should be paid to the fact that:

• there is no coverage for the Additional Insured’s solenegligence (the endorsement limits coverage to “BodilyInjury, Property Damage, Personal & Advertising Injurycaused, in whole or in part, by the named insured”);

• the CG 20 33 covers ongoing operations only. There isno coverage for completed operations;

• the CG 20 33 excludes professional services.

w Finally, under a blanket Additional Insured endorsement,all Additional Insureds share the same limits.

What about certificates?Obviously, proper handling of certificates includes use of acurrent form, and no alteration of the form.

When a blanket additional insured endorsement is on the policy, here are some suggestions:

w Do not check the additional insured box on the certificate.(Leave it blank.)

w Do not enter anything regarding additional insureds in the DESCRIPTION box.

w Instead, use a cover letter to accompany the certificate,where you can provide a statement such as the following for the certificate-holder:

“Please find attached a certificate of insurance issued for the referenced client. In addition to the coveragesindicated, please note that:

The general liability policy includes a blanket automaticadditional insured endorsement that provides additionalinsured status for ongoing operations. For you to have that additional insured status, there must be a writtencontract between the named insured and the certificateholder that requires such status.”

For more information on certificates of insurance and theirproper use, log on to www.iabgroup.com, select AgencyOperations, then Certificates of Insurance.

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

Member FAQ

[ 5 ]

IF YOU HAVE THE TOOLS,WE HAVE THE INSURANCE.

Residential Contractors with up to 5 employeescan find great deals on liability insurance atBrokers Surplus Agency. We represent Utica First Insurance, one of the largest writers of small contracting firms in the Northeast, and we cangive you a free quote on all your coverage needs!Call or email us today!

Contact: Dennis Marsaglia, Ext. [email protected] Frisch, Ext. [email protected]

Brokers Surplus Agency, P.O. Box 2849,Warminster, PA 18974 � Call (215) 443-9900


Primary Agent | January 2011

State NewsOn the legislativefrontThe Delaware General Assembly beginssession Jan. 11 with one new statesenator and seven new staterepresentatives (four Democrats andthree Republicans).

Of particular interest this session will beDAIAB’s work on:

w workers’ compensation rates

w implementation of health carereform

w growth in the captive market

w protection of agents as small-business owners from potential tax increases

Stay tuned to Primary Agent, AgentHeadlines and DAIAB’s Twitter feed(@IAB_DE) for updates.

Special welcomeIA&B welcomes new public affairscommittee members John Allen, Andrew Cousins, Lee Dotson, John Yasikand Larry Wilson. The committee iscomprised of volunteer member agentslocated throughout the state andprovides guidance and input on DAIAB’s legislative, regulatory andpolitical efforts.

Chow down andscoop up CE withJerry MiltonDAIAB’s Jan. 19membership meeting willfeature breakfast … and Jerry Milton teaching a new three-hour CE class:Certificates of Insurance,Contractual Liability andAdditional Insureds.

Topics:w What do certificate holders usually require

w State statutes and regulationsregarding Certificates of Insurance

w Potential E&O claims for an agent

w Understanding the usualcontractual provisions

w Coverage under the CGL, BusinessAuto & Excess Liability Policies

w “Indemnitees” vs. “Additional Insureds”

w Additional insured misconceptions

When:Wednesday, Jan. 19

8 a.m. breakfast, 9 a.m.-noon CE course

Where: Hilton Wilmington/Christiana

Newark, Del.

Learn more or register:www.iabgroup.com/meeting_de

[ 6 ]

G18039_DEStateNewsJan2011.qxp:Dec2010 12/15/10 7:37 PM Page 2

Become aninsider, join theDAIAB MAPPrimary Agent brings you an insightfullook at the issues affecting yourworkplace, industry and association.These and other issues related toagency operations are brought to lifetwice a year during DAIAB’s MemberAgent Panel (MAP).

A MAP meeting allows associationleadership and staff to elaborate onwhat you read in the pages of thismagazine and becomes a forum to get your input. Agency owners and principals are strongly encouraged to join MAPs to have their opinions heard and to help steer the direction of the association.

All it takes is 12 hours over two years –one three-hour meeting each April and September in Dover.

Learn more:www.iabgroup.com/get_involved

[ 7 ]

New York workers’compensation updatesLate last year the New York Workers’Compensation Board (WCB) relaxedits rules for out-of-state employers.There are now five situations that allow businesses to avoidenforcement actions when New York is not listed in item 3.A of the policy. While far from perfect, this is a vast improvement.

The change may – and should – tempt you to review client files. But if you had placed business with the New York State InsuranceFund (NYSIF) that can now be moved,look out.

The NYSIF requires 30 days’ advancenotice to non-renew a policy … thatis, for the client to notify the carrier.Miss the deadline? Save the sob story:The NYSIF displays little flexibility forproducers and clients who don’t abide.

Producers should familiarizethemselves with these specialprocedures, flag all policies placedwith NYSIF and confirm in writing anydeviation discussed with the NYSIF.

Read more about the New YorkWCB changes:www.iabgroup.com/de/wc/ny

Read more about the NYSIF’s non-renewal policies:www.iabgroup.com/de/wc/nysif

New York commission-disclosure reg affects non-residentsWrite in the Empire State? Then adopt a New York state of mind and address new commission-disclosure requirements. Resident and non-resident licensees are affected by a new producer-compensation regulation, which took effect Jan. 1, 2011.*

The regulation requires that, when aconsumer applies for an insurancepolicy, the producer explains:

w The producer’s role in thetransaction

w Whether the producer willreceive compensation from theinsurer based on the sale

w That the compensation insurerspay may vary depending on thevolume of business done withthe insurer or profitability

w That the purchaser may requestmore information on theproducer’s expectedcompensation

If asked, the producer also mustprovide a more detailed, writtendisclosure of anticipated compensationas well as a description of alternativesand the compensation associated with them.

DAIAB compiled resources to helpmembers comply. These includefrequently asked questions, sampledisclosure language and updates from the New York State InsuranceDepartment and DAIAB’s New York affiliates.

Access resources:www.iabgroup.com/de/ny_disclosure

* As this issue of Primary Agent went toprint, all legal and legislative challengesto the regulation were stagnant. Staytuned to Primary Agent, Agent Headlinesand DAIAB’s Twitter feed (@IAB_DE) for any updates.

News from the north

G18039_DEStateNewsJan2011.qxp:Dec2010 12/15/10 7:38 PM Page 3

PreventingE R R O R S A N D O M I S S I O N S

[ 8 ]

CURTIS M. PEARSALLCPCU, AIAF, CPIA

Curtis M. Pearsall, CPCU, AIAF,

CPIA, president of Pearsall

Associations Inc. and special

consultant to the Utica National

E&O Program, provided this

article.

Insurance Agents & Brokers

Service Group Inc. is the

exclusive agent for the Utica

E&O program in Delaware,

Maryland and Pennsylvania. For

questions regarding your Errors

& Omissions coverage, contact

IA&B at (800) 998-9644 or

[email protected].

WRITING PROFESSIONAL LIABILITY: MAKE SURE YOU KNOW THE LANGUAGE!


While traditional lines ofbusiness (Auto, Homeowners’,BOP, Workers’ Compensation)require a solid understandingof the coverage forms, inmany respects ProfessionalLiability is in a class by itself.

To begin, the coverage istraditionally written on aclaims-made form, asopposed to the occurrenceform used on most other linesof business. In addition, it iswidely acknowledged that notwo forms are the same; thismakes coverage comparisonsvery detailed. Moreover, theterminology is unique, withterms like “retro date,” “fullprior acts,” “extendedreporting period” and“consent to settle,” just toname a few. As you will notein the claim discussed below,mistakes can occur, and theycan be big!

When one thinks ofProfessional Liability,oftentimes the followingclasses of professional

business come to mind: real estate agents, lawyers,medical professionals,accountants and insuranceagents. While these are someof the more common, thereare more than 100 additionalprofessional occupations –including appraisers,engineers, pharmacists, courtreporters, speech pathologists,consultants, therapists andteachers – that have aProfessional Liabilityexposure. With many of these classes, the GeneralLiability carrier will include a Professional Liabilityexclusion as it is not theirintent to protect that segmentof the client’s business.

Regarding the coverage form,most (but not all) ProfessionalLiability carriers provide thiscoverage on a claims-madebasis, which means thatclaims reported during thepolicy period are coveredprovided the actual error(which could have occurredmonths or years ago) was

after any applicable retro date (more on this shortly).On the other hand, anoccurrence policy (yourtraditional GL coverage)covers claims that occurduring the policy period.Therefore, the difference isthat one form factors in whenthe claim was reported, whilethe other form deals withwhen the claim actuallyoccurred.

Retro date vs. fullprior acts This is an extremely importantconcept that will have a hugeimpact on whether the claimis valid. Using agents’ E&O inour example, for a claim to bevalid, the error committed bythe agency (example: failureto put collision on a vehicle)must be after the retro date. If it was before the retro date,no coverage would beprovided. The retro date is typically shown on the face of the policy. If thedeclarations sheet states “Full Prior Acts” or “None”


[ 9 ] [ 9 ]

in the area where a retro date would be noted, this essentiallymeans there is no retro date and the insured is protected for errors made regardless of when they were committed. The following E&O claim illustrates this well:

The agency’s client, a realestate agent, had a claims-made real estate ProfessionalLiability policy which was non-renewed based on losshistory. The real estate agentmade a conscious decision not to replace the coveragedue to pricing concerns, as the premium would have been four times higher with a new carrier. He laterchanged his mind andprocured a new claims-madepolicy with a retro date even with the new policy’sinception date.

The client was sued for a losswhere the alleged wrongful actoccurred during the periodcovered by the expired policyand prior to the new policy’sretro date. The new carrierdisclaimed based on the retrodate, and the client was forcedto spend $211,000 defendinghimself. The agent neveradvised the client to purchasea “tail” for the old policy,which would have covered the loss. In addition, the agentdid not fully explain how the“newer” retro date wouldaffect claims based on olderwrongful acts. The claimagainst the agent was settledfor $200,000.

As this claim also points out, defensecosts in this line of business can besignificant. A word of caution: If yourclient states they want to reduce theirpremium and would be willing to takea “current” retro date, this should beemphatically discouraged as this leavesa significant gap in protection. This isalso strictly prohibited in many states.

Other issues/differences to be aware ofVirtually all of the policy forms aredifferent, even within the same classof business. Therefore, a LawyersProfessional Liability policy withCompany A may be significantlydifferent than a Lawyers ProfessionalLiability policy with Company B. If you are looking to move your client to a different carrier, analyzethe two policy forms and be sure to bring any differences to the customer’s attention.Oftentimes, the new carrier may have a coverage comparison form that will be of benefit.

Defense provision – Policies may be written with “Defense in additionto the Limit of Liability” or “Defensewithin the Limit of Liability.” If theDefense is “within the limit,” anydollars spent defending the customerwill impair (reduce) the limit availablefor any settlement/judgment. Defense(unlimited) in addition to the limit ofLiability is the broadest.

Deductible – This may be on a loss-only basis or on a combinedbasis. With loss-only coverage, theinsured would not participate in anyclaims defense, litigation or claims-handling expenses associated with theclaim; these would be handled by thecarrier. Conversely, with a combined

loss and expense deductible, theinsured would participate in theseexpenses up to the deductible limit.Make sure your customer knows their obligation.

Extended reporting period – This is often called a “tail.” Whilevirtually all claims-made policiescontain this provision, this does notmean there is consistency amongcarriers as to the available options.Using agents as the example, if anagency sells its business to anotheragency, the seller would buy a tail.This provides an additional period of time after the expiration of thepolicy for which valid claims willcontinue to be accepted, provided the wrongful act occurred before the end of the policy period. In theclaim example cited earlier, the agentshould have advised the real estateagent to buy a tail to protect him forany claims that subsequently weremade against him.

Receipt of the policy – When yousend out/deliver the policies, alwaysadvise your clients to review thepolicy to ensure everything is inorder. Obviously, the agency shouldalso review the policy to make sure it matches what was requested.

If you handle Professional Liability(also called Errors and Omissions),understand its uniqueness – the terms and the coverages. It is unlikemost other forms of coverage. Inaddition, educating your customers is recommended and will certainlyhave solid benefits.


CoverageC O R N E R

[ 10 ]

JERRY MILTON, CIC

Jerry M. Milton teaches

and consults on industry

issues. The legal profession

recognizes him as an

expert on insurance

coverages. He is also the

education consultant for

IA&B, working with CISR,

CIC and continuing

education programs.

DOES THE INSURED EVER HAVE TO PAYTHE INSURER BACK FOR DEFENSE COSTSUNDER THE CGL?


The Commercial GeneralLiability (CGL) policystipulates that the insurer has two distinct obligations –the duty to indemnify theinsured for any liabilitycovered under the policy andthe duty to defend theinsured for any suit seekingthose damages even if theallegations are groundless,fraudulent or false. Courtshave traditionally held thatthe duty to defend istriggered whenever thefactual allegations or theclaims in a suit against theinsured present thepossibility that the insuredmay be liable and they arepotentially covered under the CGL.

Courts also have routinelyheld that all doubts as towhether the insurer isrequired to defend are to beresolved in favor of theinsured. Even if only oneclaim of a multi-claimcomplaint creates a potentialcovered liability obligation, the insurer must defend theentire suit.

Jerry’s Sports Center was sued by several organizationsalleging that the firearmsindustry was liable forcreating a public nuisancewhich resulted in injury,death and other damages to many of their associationmembers who were thevictims of firearms. Jerry’sSports Center was an insuredunder a standard CGL policyissued by American AndForeign Insurance Co.(hereinafter referred to as“Royal”). The CGL policyrequired Royal to defendpotentially covered claims,and contained no right of reimbursement ofdefense costs.

Royal provided defense toJerry’s Sports Center under a reservation of rights letterwhich stated that it wouldseek reimbursement for “any and all defense costsincurred in defense of thismatter.” While defendingJerry’s, Royal sought ajudicial determination thatthe claim was not covered by their policy. The trial court

agreed that the claim was not covered since theplaintiffs did not seekdamages for bodily injury to particular individuals. (The Pennsylvania Supreme court later found this ruling “suspect,” but thisissue was never appealed.)The trial court also found that Jerry’s had to reimburseRoyal the $309,216 ofdefense costs the insurer had incurred.

On appeal, the PennsylvaniaSuperior court reversed thetrial court’s ruling on theissue of the right of theinsurer to recover defensecosts. This case was thenappealed to the PennsylvaniaSupreme Court.

First, Royal argued that thereservation of rights lettercreated an implied contract,giving them the right torecover defense costsincurred in a claim that thecourt determines is notcovered by the policy. TheSupreme Court rejected thisargument on the basis that


an insurer “cannot employ a reservationof rights letter to reserve a right it doesnot have pursuant to the contract.”

Second, Royal claimed there was anequitable right to reimbursementbecause otherwise the insured would beenriched unjustly by receiving a defenseit had no right to receive. The SupremeCourt found no merit in this argumentand explained that an insurer has aright, as well as a duty, to defend, andin so doing benefits its own interests aswell as those of the insured. It furtherstated that the duty to defend isextremely broad in Pennsylvania andencourages insurers to defend allactions where there is any potential for coverage.

On Aug. 17, 2010, in American andForeign Insurance Company v. Jerry’sSports Center, Inc., a unanimousPennsylvania Supreme court ruled thatinsurers that issue commercial general

liability policies obligating them todefend any suit seeking damages to which the insurance may apply donot have the right to recover defensecosts from the insured if a court laterdetermines the suit for damages is not covered by the policy.

The Supreme Court further concludedthat to find a right of reimbursement of defense costs would “amount to a reactive erosion of the broad duty to defend” and “would narrowPennsylvania’s long-standing view that the duty to defend is broaderthan the duty to indemnify.”

There is considerable uncertainty on this issue throughout the country. The Supreme Courts of California andMinnesota and the appellate courts ofFlorida and New Jersey have recognizedan insurer’s right of reimbursement ofdefense costs for uncovered claims.However, the Supreme Courts of

Alabama, Hawaii, Illinois, Louisiana,Massachusetts, Texas, Wyoming andnow Pennsylvania have held there is no right of reimbursement. In addition,federal court cases on this issue haveresulted in different opinions.

This opinion is good news forPennsylvania insureds. Maryland and Delaware, your status is uncertain.However, your courts may pay someattention to the Pennsylvania decision.

Y’all take care!

Date Topic Location

19 CISR-Personal Auto Course Hagerstown, Md.

20 CISR-Personal Auto Course Lancaster, Pa.

25 CISR-Agency Operations Course Wilkes-Barre, Pa.

26 William T. Hold Seminar Mechanicsburg, Pa.

27 William T. Hold Seminar Philadelphia, Pa.

Glance at EventsJ A N U A R Y C A L E N D A R

[ 11 ]


ASSOCIATION AT WORK

Fresh year. Fresh start.

IA&B simplifies making —

and following through on —

your resolutions. The next

pages detail the top 11

resolutions for agencies

and the tips and tools to

check them off your list.

Consider tackling one a

month. (And then setting

aside next December

to celebrate.)

11 Resolutions for 2011


[ 13 ]


Resolution #1: Renew your membershipFirst things first. IA&B membership pays for itself throughaccess to programs, products and services. Don’t believe us?Read on and see what membership can do for you in 2011….

Resolution #2: Embrace technologyWhat you don’t know can hurt you, as well as your agency’sproduction, data security and marketing prowess.

Technological advances strike fear in the hearts of manyagency principals, especially those who achieved greatsuccess and built thriving businesses without them. But with these sometimes overwhelming (and questionable,in the case of a few social networking sites) innovationscome opportunity.

Make 2011 your year for due diligence: Look into the waystechnology can benefit your agency. And then make aneducated decision on whether the reward is worth the effort.

Electronic document managementGoing paperless (or as paperless as a business can go) is a challenge relatively few agencies have undertaken.Developing procedures requires thoughtful planning and ongoing review. And implementing them requires multi-level buy-in and thorough training. After all, decades-long daily habits can be hard to break.

But from those brave agencies that have paved the way, we know that the rewards are worth the toil. Think:improved customer service, production and carrier relations and reduced E&O exposure.

If you take the plunge, jump smartly. Know the state and federal regulations that govern what can and can’t bekept electronically and how long files must be retained.

Social networkingEver consider that you, the quintessential networker, might find online social networking second nature? With a little time and exploration, you may discoverthe concept isn’t so earth-shattering after all.

“Social networking is notnew…. [It] is simply a newtool for the communicationyou and your staff havealways done.”

– Rick Morgan,industry expert

on technology and marketing

Record-retention guidelines:

Del.: www.iabgroup.com/de/record_retentionMd.: www.iabgroup.com/md/record_retentionPa.: www.iabgroup.com/pa/record_retention


Not just for the young andyoung at heart, the social Web(YouTube, Twitter, LinkedIn,Facebook and more) istransforming our industry —and nearly all others.Customers expect instantcommunication and completetransparency. And they’remore likely to do business withpeople they know … in personor over the Internet.

Truth be told, socialnetworking doesn’t require ashift in philosophy. It’s actuallyan efficient, productive andcost-effective new way to dobusiness the old way —

building relationships oneclient at a time.

Steve Anderson, an insurancetechnology expert andpresenter at IA&B’s 2010Executive ManagementConference, offers sage advice:Start somewhere, and give it 15 minutes per day.

Even an old producer canlearn new tricks. For guidance,peruse IA&B’s onlineresources, and let yourassociation lead the way.

ASSOCIATION AT WORK

Driving members to distinction

PROVIDING MARKETOPTIONS TO HELP YOURBUSINESS GROWThat’s how we deliver distinction.

With access to specialized markets, IA&B provides programs that increase your agency’s growth potential. Whether its personal umbrella, home business insurance or workers’ compensation coverage, you can write and keep more business without production requirements and access fees. Enroll in IA&B’s Market Options and maximize your growth.

Maximizing your agency’s growth.That’s how we deliver distinction.

FOR MORE INFORMATION ABOUT IA&B’S MARKET OPTIONS PROGRAMS, VISIT IABGROUP.COM OR CONTACT THE IA&B MEMBER SERVICE CENTER AT (800) 998-9644.

Social-networkingresources:

Del.: www.iabgroup.com/de/technology/ other_resources

Md.: www.iabgroup.com/md/technology/other_resources

Pa.: www.iabgroup.com/pa/technology/ other_resources

Join IA&B’s LinkedIngroup and follow us on Twitter:

www.iabgroup.com/soc_media


Private eyes are watching youThink no one will notice a privacytransgression? So did Robert WarrenSpruill when he dumped over 1,000insurance records and documents

into an unlocked dumpster.

A bystander saw the activity,became suspicious and

alerted the media. In the end, Spruill

was down $11,000 thanks

to an OregonDepartmentof Consumer and BusinessServices fine.

Resolution #3: Takedata security seriouslyThink no one’s watching?Think again. As agencies stepup their reliance on electronicdata storage and transmission,the feds are cracking down onbreaches — via legislation andenforcement. In 2009 the firsttwo agents were fined for nothaving written security plans inplace.

The latest hurdles stem fromthe Health Insurance Portabilityand Accountability Act, bestknown as HIPAA. As ofFebruary 2010, agencies sellingeven one health policy must

comply with the HITECHSecurity Rule. Read: an evenmore stringent information-security program.

IA&B’s recently revampedprivacy resources walkmembers down the (many)paths to complete compliance.Start with the online audit, andthen work your way through acustomized plan of attack.


HELPING YOU RETAIN CUSTOMERSWHO NEED PREMIUMFINANCING OPTIONS

Retain your clients and commissions by providing your insuredspayment options to manage their insurance premiums. IA&B’s premium financing program — offered throughPremium Finance Brokerage (PFB) — is your solution forhelping clients control their cash flow and creating additional revenue* for your agency. Enroll in IA&B’spremium financing program today.

Helping independent agencies keep customers.That’s how we deliver distinction.

FOR MORE INFORMATION ABOUT IA&B’S PREMIUM FINANCING PROGRAM, VISIT IABGROUP.COM OR CONTACT THE IA&B MEMBER SERVICE CENTER AT (800) 998-9644.

*Maryland law strictly prohibits producers from collecting fees from either the premium finance company or the consumer as a result of placing an insurance contract with a premium finance company.

That’s how we deliver distinction.

Privacy resources:Del.: www.iabgroup.com/de/privacy

Md.: www.iabgroup.com/md/privacy

Pa.: www.iabgroup.com/pa/privacy



___________________________

“I could not do what I dowithout IA&B’s HRresources. There’s so much all in one place, and that makes it much

easier to stay on top of it.”

– Donna Dates,The Winans

Insurance Agency

___________________________

Resolution #4: Prioritizeemployee managementPutting your own house in orderis key — but often swept underthe carpet thanks to competingpriorities and misunderstandingsof rights.

Human resourcesIn many independent agencies,human resources fall onto theplate of already overworked andstretched-too-thin seniormanagement. But loose endscan unravel an agency from theinside out. Take, for instance,that problem employee whopoisons staff morale. Or thatunfiled I-9 form that carries a daily fine of up to $1,000. Or that position that was never reclassified and nowviolates state and federal wage requirements.

No one, and no agency, has theresources to manage the movingtarget of human resourcescompliance without help.

That’s why IA&B offers HRSolution©, a compilation ofproducts and services to helpmember agencies build a humanresources program. IA&Brecently updated and refined the tools to account for recentlyenacted laws and regulationsand a new human resourcesconsultant’s feedback.

HR Solution includes an audit, customizable employeehandbook, administrative guideand access to services anddiscounts from a contractedhuman resources consultant.Best yet, it’s all included withmembership. (See Resolution #1. Told you renewal gives you a lot of bang for your buck….)

Producer agreementsAll too often members contactIA&B after their key producerdeparts — possibly withproprietary information.Producer agreements are, ofcourse, sweeter deals beforerelationships sour.

IA&B expanded its produceragreement toolkit to better assistmembers in protecting theirbook of business and the book’svalue. The Web-based toolkitwalks members throughestablishing trade secrets,restrictive covenants andcompensation plans andprovides strategies for assessingdamages. Plus, it explains the

pros and cons of the employeeand independent contractorclassifications and includes asample agreement for each.

Resolution #5: Preparefor the worstFires, floods, chemical spills,pandemics … the emergenciesthat could threaten a smallbusiness’s livelihood are endless.And they take a toll: Each yearthousands of small- andmedium-sized businesses suffer a crisis that disrupts their operations.

IA&B members have an ace uptheir sleeve: an emergency andbusiness continuity planningmanual. The turnkey toolconsists of a Web-based inputmodule and a customized output that helps agenciesprepare for, respond to andrecover from an emergency.

___________________________

Disasters cause thousandsof businesses to close each

year. And at least 25percent never reopen.

– Business & Home Safety,a non-profit initiative

of the insurance industry

___________________________

ASSOCIATION AT WORK

[ 16 ]

HR Solution:

http://www.iabgroup.com/HR

Producer agreementtoolkit:

http://www.iabgroup.com/patoolkit


The manual walks agenciesthrough cataloging their businesscontacts, outlining theiroperational needs, prioritizingtheir critical functions andcompleting risk analyses. Thecustomized takeaway includestimelines, implementationguidelines and recommendationsfor agencies in crisis.

And what separates IA&B’splanning manual from the pack?It’s Web-based, so members’plans are stored online wherethey can be accessed anywhereat any time. (Yet another member benefit that reinforcesResolution #1!)

Resolution #6: Refreshyour skillsLooking for a competitive edge?A way to improve your value asan employee, help in yourinteractions with clients andadvance your career? Continuing education could beyour winning ticket.

What’s a designation worth, forinstance? Quite a bit in theinsurance world. It’s a way todevelop knowledge in an ever-changing industry, gain cloutamong colleagues and build trustwith clients.

IA&B offers hundreds ofprofessional development

[ 17 ]

800-334-5579www.gotapco.com

1,000 Strong More than 1,000 classes of P&C businesswritten under binding authority.

The TAPCO Service Pledge

* Available coverages and markets may varydependent upon risk characteristics.

Call. Quote. Bind.

Lessor’s Risk coverage in a five-minute phone call.

Emergency andbusiness continuityplanning manual:

www.iabgroup.com/epm

“When I first received my designation, I was out selling commercial insurance,” says L. Allan Boyd, CIC.“What I learned at the institutes gave me the ability to look at an account, pick it apart and offer an intelligentopinion about what was wrong with it. It enhanced myability to sell insurance.”



opportunities annually — from pre-licensing prep courses to designation programs to E&O seminars,many of them at discountedprices for members.

Resolution #7: Evaluateyour carrier relationshipsCarriers are your partners. Theycan make your job easier — orplace stumbling blocks alongyour daily workflows. And let’sface it: Most of them do both atone time or another.

The key is finding the bestcompany partners for yourclients, your agency and, in the end, your bottom line.

IA&B provides a starting point —the biennial CompanySatisfaction Index. Based on members’ experiences, the tool allows agencies tobenchmark their carrierexperiences against others’,research companies beforeaccepting appointments andfacilitate dialogue with carriers.

The survey rates companies infour categories: products, pricingand underwriting; policy serviceand claims; technology; andagency/company relationship.

Resolution #8:Be heard

“Insurance agents rank at the top as the most influentiallobbyists in any district and are considered a reliable sourceof information,” Rep. BarneyFrank (D-Mass.), chairman of the House Financial ServicesCommittee, once said.

IA&B members: It’s time toprove it.

Legislative advocacy is a toppriority for the organization,thanks to direction from theIA&B boards of directors, as well as input from membersurveys and Member AgentPanels. But to succeed, IA&Bneeds members’ support. Thatmeans responding to grassrootsaction alerts, donating toAgentPAC and, of course,helping to identify theorganization’s priorities (seeResolution #10: Get involved).

Resolution #9: Setyourself apart from the packCompetition is fierce — especiallyagainst direct writers and theiraggressive advertising budgets. So what’s a small, independentinsurance agency to do?

Flaunt what you’ve got! Point out the benefits that you, as anindependent agent, bring to the table that an impersonal 800-number or website cannot.Differentiate through service and expertise.

Communication is key tocultivating meaningful customerrelationships. IA&B members have access to a discounted e-newsletter service that simplifiesstaying top of mind with clients.An additional touchpoint withcustomers, an e-newsletter allowsyou to educate them on coverageissues, mitigate their risks andintroduce new markets.

The e-newsletter service availableto members boasts easy setup,customizable templates, an articlelibrary, simple mailing-listmanagement and real-timereporting.

ASSOCIATION AT WORK

[ 18 ]

Company Satisfaction Index:http://www.iabgroup.com/csi

Professionaldevelopment:

www.iabgroup.com/education

AgentPAC:

Del.: www.iabgroup.com/de/pol_act_ctr

Md.: www.iabgroup.com/md/pol_act_ctr

Pa.: www.iabgroup.com/pa/pol_act_ctr

E-newsletter service:http://www.iabgroup.com/enews


Resolution #10:Get involved An association is only as strong as its members … which is one of the reasonsIA&B is so successful. IA&Bmembers drive the associationthrough groups like MemberAgent Panels (MAPs) and publicaffairs committees.

___________________________

“Any organizationthat wants to be

valuable to its membershas to know

what members think. MAPs provide a

forum to do that.”

– Deb Bellmore-West,

Helmbold & Stewart Inc.___________________________

Make this the year that you havea say. MAPs are forming in 13locations across the tri-state area.Participants, who attend fourmeetings over two years, weigh in and provide direction on theassociation’s activities.

Outcomes from past MAPmeetings led to produceragreements, fiduciary duties andagency termination resources.MAP attendees’ opinions areshared directly with IA&Bleadership and influence decisionsaffecting programs, products andservices.

Public affairs committee membersserve on an alternating two-yearcycle, with the current termrunning through 2011.

Participants meet at criticalpoints throughout the year to provide input on IA&B’slegislative agenda and activities. The next public affairs committees will begin forming in late 2011.

[ 19 ]


MAPs: www.iabgroup.com/get_involved


Resolution #11: Planfor tomorrowIt’s no shocker that theindependent insurance agencycommunity is aging. But the BabyBoomer-dominated field has adilemma on its hands: how toattract new blood.

There is no one simple way to accomplish this feat.Perpetuation requires a cultureshift within the industry. Fromagents to insurers to ssociationslike IA&B, everyone within theindustry must work with an eyetoward tomorrow.

For agents, there must be carefuland calculated planning in theyears leading up to retirement —

whether that involves groomingsomeone internally or securingthe right outside buyer. IA&B’swebsite includes links toperpetuation and agencyvaluation resources.

At the association level, IA&Brecently created ABCs for NewAgencies, a start-up guide forthose entering the industry.

Our goal is to perpetuate theindustry by preparing aspiringagency owners for the challengesahead.

ASSOCIATION AT WORK

[ 20 ]

Perpetuation resources:Del.: www.iabgroup.com/de/perpetuation

Md.: www.iabgroup.com/md/perpetuation

Pa.: www.iabgroup.com/pa/perpetuation

Restaurants, Bars and Taverns

We can help you place a variety of risks: Fine Dining Delicatessens Nightclubs / Gentlemen’s Clubs Risks with Dance Floors Light entertainment Liquor Liability High property values

Tri-State General Insurance Agency1-800-556-7894

We write more than just “Trucking” - visit us at www.tsgia.com

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

Vicki Doane x 241 [email protected]

Fast, Friendly Service Jen Straw x231 [email protected]

Property / Casualty Underwriter

Property / Casualty Underwriter


Frederick Mutual Insurance Company, an AM BESTA- (Excellent), VI property/casualty insurer writing inMaryland and Pennsylvania is currently looking forexperienced property/casualty insurance agents licensedto write personal and commercial lines business inMaryland and Pennsylvania. Frederick Mutual, a nichecompany, specializes in writing Small ArtisanContractors, Mainstreet BOP Business, Homeowners,Dwelling Fire and Personal Umbrella.

Established in 1843, we pride ourselves on our qualityof service and desire to partner with equally dedicatedprofessionals.

Additional background information regarding FrederickMutual is available on our website at www.fredmut.com.

57 Thomas Johnson Drive, Frederick, MD 21702-4301301-663-9522

ecurity in Your Time of Need

nparalleled Customer Service

orporate Integrity

ompetitive Pricing

ase of Doing Business

uperior Financial Strength

ound Products

SSUUCCCCEESSSS

At Frederick Mutual, we adhere to the following

Pillars of SUCCESS

One-Stop Insurance Shopping

Secure coverage for the typical insuranceneeds of small- to mid-sized businesses!

GUARDPlusComp • Businessowner’s • Auto • Umbrella

For employees

Workers’ Comp (DE, MD, PA)

(MD, PA)

(PA)

(MD, PA)

For property and liability

For vehicles and fleets

For added protection

BOP

Commercial Auto

Umbrella

Features:

Increased limits

Coverage extensions

Price discounts

Good income potential

Consolidated billing

Coastal exposures considered

�

�

�

�

�

�

GUARD is seeking qualityagency appointments.

Be one of them.

www.guard.com/apply

800-673-2465, ext 4567A- A.M. Best Rating

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

[ 21 ]


HR HEADQUARTERS

IA&B members haveaccess to HR Solution©, a compilation of productsand services to help themestablish or improve theirhuman resources program.Included are base-levelconsultation services and discountedprofessional services fromMosteller & Associates.

Employee handbooks …more than a paperweight


[ 23 ]


Good grief! Theemployee I was about to terminate says she never received

a copy of our handbook andshe didn’t know the rules. And she’s threatening to sue!

Handbooks are not legallyrequired documents foremployees. But they do clarifythe rules, regulations andpractices you utilize tosuccessfully run your business.And they help support yourposition in the event of a legal process.

You may not be able to pitch a save in the above scenario,but you can certainly dosomething about it in thefuture. If you do issue ahandbook, the short answer,in this case, is to haveemployees sign anacknowledgment statement of receipt and place it in their personnel file.

While handbooks are helpfulin communicating your humanresources practices andprocedures, have you thoughtabout how the agency isrepresented by the handbookto employees? To attorneys?How about to judges? Tojuries? Regulatory agencies(think: the U.S. EqualEmployment OpportunityCommission and the state’sHuman RelationsCommission)?

Legal firms have suggestedusing language that allows forflexibility and gives you theability to manage based on thesituation rather than adheringto a prescribed format. Usingwords such as “should” or“may” rather than “shall” or

“will” throughout thehandbook will help give you latitude. But it’s moreimportant to use clear, concise language that’s easy to understand. Keepprocedures to a minimum in the handbook and referemployees to other resourcesto help them navigate thehow-to component.

What’s the minimum I need tocover if I provide a handbook?

There are a few policies andpractices that ought to beconsidered as basic tohandbooks:

w Handbookacknowledgment receipt

w At-will employmentstatement

w Equal employmentopportunity

w Harassment, includingsexual harassment

w Accommodations fordisability (ADA) or religion

w Leave programs (FMLA) orother medical time-offarrangements

w Attendance

w Paid time-off programs

w Company or intellectualproperty

w Benefits eligibility

w Background checks anddrug testing

w Handling confidentialinformation

w Payroll practices and pay policies

How do I get fromhere to there?w Review your currentpractices, including the unwritten.

w Determine what’s legally required.

w Check reliable resourcesfor model documents.

w Consider electroniccommunication andaccess for employees.

w Get input from othermanagers or employees as they review the draft handbook.

w Or, check IA&B’swebsite for the HRSolution© modelhandbook.

Editor’s note: HR Solutioncontains a compilation ofproducts and services,including a ready-to-useassociate handbook template.Access to HR Solution isincluded with IA&Bmembership but is limited tothose individuals designatedas agency administratorswithin the IA&B database.

To access HR Solution, visit www.iabgroup.com/HR.To add an agencyadministrator, contact IA&B’s Member Service Center at 800-998-9644,option 0.

________________________Jeffrey W. Gerhart, CEBS, MBA,provided this article on behalf ofMosteller & Associates, IA&B’scontracted human resourcesconsulting firm.

G


Platinum Profile

Ohio Casualty is one of the eightsuper regional companies thatcomprise Liberty Mutual

Agency Corporation (LMAC). Thecompany’s market focus is small andmid-sized commercial lines. Over thepast ten years, Liberty Mutual hasassembled an impressive lineup ofcompanies and products forindependent agents across thecountry. LMAC, the largest businessunit of Liberty Mutual, writes businessexclusively through independentagents and brokers. Agentspositioning for the future aredeveloping strong relationships withthe organization to share in thecompany’s growth and success.

LMAC has a unique business model inthe industry. The Regional Companiesprovide responsive front-line serviceto agents as they work togetherclosely in local markets while theLMAC national backbone provides theback office support such as systems,finance, product development andspecialty claim expertise bringing thebenefits of national scale to regionalcompanies.

As a result of these and other actions,Liberty Mutual has moved up theFortune 100 list to number 71 basedon 2009 revenues. The companypromises to be a major force in thecoming years.

For agents in Pennsylvania, Delaware,and Maryland, a contract with OhioCasualty is also the gateway toconnections with Liberty AgencyUnderwritersTM, Liberty InternationalUnderwritersTM, Liberty MutualGlobal, and Liberty SuretyFirstTM.These specialized divisions writemonoline Umbrella and ExcessCasualty, Ocean Marine, Bonds, and other specialty products. Ohio Casualty also has dedicatedunderwriting units for specialty Inland Marine, Schools and Farms.

While Liberty Mutual is a relativenew-comer to the IndependentAgency system, the company hastaken strong positions to defend the independent agencycompensation model.

Insurance Agents & Brokers proudly recognizes

Ohio Casualty™ as one of itsPlatinum Partners.

IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNEROhio Casualty™

CHIEF EXECUTIVE OFFICERMike Winner, President & CEO

COMPANY HEADQUARTERSFairfield, Ohio

REGIONAL OFFICESFairfield, Oh.; Lexington, Ky.;

Camp Hill, Pa.; Columbia, Md.

UNDERWRITING OFFICESColumbia, Md.; Delaware Valley, Pa.;

Pittsburgh, Pa. & Camp Hill, Pa.

A.M. BEST RATING“A” (Excellent)

WEBSITEwww.ohiocasualty-ins.com

Ohio Casualty works hard toprovide the tools IndependentAgents need to be successful.

“We feel so strongly about ouragency-focused culture that wetrademarked the tag line Vested in Our Agents’ SuccessTM to showour dedication and commitment to our agent partners.”

Mike WinnerPresident & CEO


WHAT IS IA&BPARTNERS?The IA&B Partners

program gives company

and allied businesses

the opportunity to

demonstrate their

commitment of support

to independent agents

and receive maximum

market exposure. As an

IA&B Partner, you will

also realize the benefits

of IA&B membership to

help you succeed in

the insurance industry.

DO YOU SEEYOUR NAME?To become an IA&B Partner,

choose the sponsorship

package that matches your

commitment of support.

Contact the Member Sales

Center at (800) 998-9644,

(717) 795-9100 or visit us

online at www.iabgroup.com

to get started.

Listed below are those companies that strongly support the independent agency

system and Insurance Agents & Brokers.Thank you for your continued sponsorship.

PLATINUM LEVELACUITYBerkley Mid-Atlantic GroupErie Insurance GroupHarleysville InsuranceInsurance Agents & BrokersService Group IncMillers Mutual GroupMillville Mutual Insurance CoMutual Benefit GroupOhio CasualtyPenn National InsuranceSelective Swiss ReThe Main Street America GroupTravelersUtica National Insurance Group

GOLD LEVELAllied InsuranceMMG InsuranceProgressive

SILVER LEVELAccess Insurance Company American Mining Insurance CoCumberland Insurance GroupDonegal Insurance GroupFrederick Mutual Insurance CoHarford Mutual Insurance CoJuniata Mutual Insurance CoPSBA Insurance TrustThe Motorists Insurance GroupWestfield InsuranceZenith Insurance

BRONZE LEVELAegis Security Insurance Co

Agency Insurance Company

Auto-Owners Insurance Company

Briar Creek Mutual Insurance Company

Builders Insurance Group

Chubb Group of Insurance Companies

Encompass Insurance

First General Services

Foremost Insurance Group

Goodville Mutual Casualty Company

Grange Insurance Companies

Hanover Fire & Casualty Insurance Company

Insurance Alliance of Central PA Inc

Insurance Placement Facility of PA

Keystone Insurers Group Inc

Lebanon Mutual Insurance Company

Mercer Insurance Group

Merchants Insurance Group

Mercury Casualty

Penn Millers Insurance Company

Penn PRIME Municipal Insurance

Reamstown Mutual Insurance Company

Rockwood Casualty Insurance

State Auto Mutual Insurance Company

TAPCO Underwriters Inc

The Brethren Mutual Insurance Company

The Mutual Service Office Inc

Tuscarora Wayne Insurance Company

Primary Agent January 2011


Primary Agent | January 2011 TechnologyU P D A T E

[ 26 ]

MAUREEN WALLBENTLEY

Maureen Wall Bentley is

executive vice president of

brand strategy for Aartrijk, an

insurance industry branding

firm. Maureen prepared this

article for ACT and can be

reached at [email protected].

For more information about

ACT, contact Jeff Yates, ACT

Executive Director at

[email protected]. This article

reflects the views of the author

and should not be construed as

an official statement by ACT.

Sometimes the problem with“the next big thing” is that allthe buzz around it can drownout the legitimate value hiddenbeneath.

Take social media. Manyindependent agents havebecome so overwhelmed bythe constant clucking about this“must do” marketing tool thatthey simply have dismissed itas non-essential and faddish –and then promptly gone backto business as usual. And, in a sense, these agents are half-right: Some of the socialnetworking communities willbe lost in a blink, overtaken by the next “next big thing.”

But many will be with us for along while. And underneath allthe tweeting, friending andgeolocating is a valid core thatindependent agents shouldheed: Relationships increasinglyhave a digital component andlearning to effectively use thesetools can enhance your offlinerelationships and build youragency brand.

So, how can you sift throughall the noise to leverage thetrue benefit of social media? In short, think strategically and use some common sense.Herein, a few thoughts to getyou started.

Have a plan. If you don’t have a holisticmarketing-communicationsplan for your agency, you’realmost certainly wasting moneyand you probably have no ideawhat’s working or why. Draft aplan that outlines the followingelements, and include anysocial media efforts; don’tseparate social networkingfrom your overall activities.

Goals. Be as specific aspossible. For example, “Increasenew middle market accounts byx percent” is better than “Growcommercial lines revenues.”

Budget. The best agenciesbudget between 3 and 5percent of revenues formarketing (1 to 3 percent for very large firms), with more

fundsallocated in

years with big projects, such asa major rebrand. Keep in mindthat Web development is far less expensive than it usedto be and that social media can be virtually free.

Audiences. Building a profile of your targeted buyer willenable you to better identifygood vehicles (publications,websites, etc.) and developmessaging.

Messaging. List all the pointsyou want to convey in yourplan, realizing that not everymessage is appropriate forevery audience, campaign oroutlet.

Vehicles. Identify the variouspublications, radio stations,websites, etc. that you want touse for advertising, and whichyou might target for PR efforts(they may not be the same).Include any direct marketingefforts as well as social mediaand blogging.

YOUR DIGITAL


[ 27 ]

Responsible parties. It is best to haveone person internally supervising all theefforts, but identify all contributors,including those posting to social media,blogging, drafting bylined articles orbeing interviewed for local press.

Metrics. Include short-termmeasurements such as Google analytics,incoming calls and readership numbers,but consider long-term goals, as well,such as new business from currentclients, increased commercial revenues and retention.

Assign a community monitor. Keeping track of your agency’s onlineposts and followers’ responses can taketime – but you don’t have to do ityourself. Assign the task to someonewho enjoys social networking and “gets”the immediacy of it. While this may be ayoung producer or college intern, don’trule out older employees, as socialmedia use is growing leaps and boundsamong Boomers.

Follow offline rules. You wouldn’t (or shouldn’t) go to aChamber of Commerce dinner and talknon-stop about yourself or your agency.Rather, you’d engage other people in amore personal way – ask about theirbusiness or kids or new car, orcommiserate over last week’s loss forthe home team. And, most important,you’d listen. These same standards ofconduct should be followed online aswell. If you don’t – just like in the offlineworld – people will avoid you.

Be brand consistent. Your social media presence shouldshare the look, feel and messaging ofyour agency’s other touch points. So, ifyour website promotes your agency ascommercial-lines oriented, then yourtweets should be in sync. And if youragency’s color palette is typically grayand green, don’t dress up yourFacebook page in blue and gold. Thinkboth strategically (Are we telling thesame story in our online and offlinetouch points?) and tactically (Does ouravatar (online representation) reflect ourlogo?). Conducting an image assessmentevery few years is a great way to alignall the pieces that communicate yourbrand.

Think service – and listen. Some of the most successful social mediaadopters use their online presence morefor service and customer communicationsthan for marketing. One agent, forexample, posts weather warnings andother local news on his Facebook andTwitter accounts. Because he’s notspamming with promotional material,he has developed a healthy following –and the appreciation of those whoavoided the downed tree or theflooded byway because of his tweet.Such low-key posts reinforce hisposition as a good guy in thecommunity, which helps his agency brand.

Esurance, the online auto provider,pays careful attention to any onlineconversations about its brand so that it can respond in real time to unhappycustomers or other malcontents. Thinkof your social networking sites as arolling customer survey. (And don’tthink that these negative comments

won’t happen if you’re not listeningonline; they will, but you’ll be nonethe wiser.)

Don’t expect miracles. Anyone who tells you they arequadrupling sales through socialmedia is likely blowing smoke. Thatmay sound like an excuse to toss asidea social media effort altogether, butit’s not. Social media, like manybranding vehicles, can be powerful inkeeping your agency front of mind,and it is wonderful for humanizingyour firm. But you wouldn’t (orshouldn’t) expect one ad in the localpaper to transform your business, andyou should be equally realistic aboutsocial media.

Editor’s note: For more information about strengthening your online presenceand using websites and social mediaeffectively, visit www.iabgroup.com andselect “Technology” from the left-handnavigation menu and then “OtherResources.”

When it comes toUmbrella or EquipmentBreakdown CoverageWe have fast, competitive quotesfor you, with the service you deserve.• Designed for Condos, Co-ops, Townhouses,

Apartments, HOAs, PUDs, HabitationalAccounts, and Lessor Risk Only Exposures

• Limits from $1 Million to $50 MIllion• Coverage Includes Excess, G.L., D&O, & Auto• Minimum premiums as low as $350

For additional information or quotes call:

888.548.2465And ask for a New Business Underwriter or [email protected]

Visit our website atwww.umbrellaprogram.com

JGSService is our specialty; protecting you is our mission®

®

I N S U R A N C E

A subsidiary of


ACUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IFC

Brokers Surplus Agency . . . . . . . . . . . . . . . . .1, 5

Commonwealth Ins Co . . . . . . . . . . . . . . . . . . . .3

Frederick Mutual Ins Co . . . . . . . . . . . . . . . . . .21

Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

IA&B Partners Program . . . . . . . . . . . . . . . . . . .25

IA&B Series Ad . . . . . . . . . . . . . . . . . . .14, 15, IBC

Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC

Penn National Insurance . . . . . . . . . . . . . . . . . .19

Preferred Property Program . . . . . . . . . . . . . . .27

TAPCO Underwriters . . . . . . . . . . . . . . . . . . . . .17

Tri-State General Ins Ag . . . . . . . . . . . . . . . . . .20

Ad Index

ClassifiedA D V E R T I S E M E N T S

SOUTHEAST PA PRODUCERS & AGENCIES

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

If you would like to place a

Classified Advertisement, simply

fax your ad on company letterhead

to (717) 795-8347, and we will take

care of the rest.

[ 28 ]

Steelers star safetylets his hair downFollowing in a long line of celebrity bodyparts (e.g. Heidi Klum’s legs, Keith Richard’sleft-hand middle finger, Santa’s beard), TroyPolamalu’s hair now is insured.

Shampoo brand Head & Shoulders took outa $1 million insurance policy in connectionwith becoming the “official shampoo of theNFL.” Lloyd’s of London wrote the policy. Sources: Pittsburgh Post-Gazette;www.troyshair.com----------------------------------------------------------------————The Last & Least column is dedicated to theindustry’s oddities — from creative claims and kookycoverages, to (tasteful) jokes and strange stories.Submit yours to [email protected], subject line: Last & Least. The editor will happily protect sources’anonymity upon request.


LET’S PUT OURHEADS TOGETHER

THE MEMBER AGENT PANEL (MAP) IS YOUR FORUM TO TELL IA&B HOWTO BEST SERVE YOUR NEEDS.

MAPs bring members together to discuss issues affectingtheir agencies and how IA&B may be able to help addressthose concerns. IA&B is now recruiting members for a new two-year term (a total of four meetings held in yourregion). Please consider nominating yourself for thisrewarding opportunity.

LEARN MORE ABOUT MAPS AND HOW YOU CAN VOLUNTEER AT IABGROUP.COM/GET_INVOLVED, OR CALL THE IA&B MEMBER SERVICE CENTER AT (800) 998-9644.

That’s how we deliver distinction.




Primary Agent - January 2011 - DE Edition

Documents