Primary Agent - July 2010 - PA Edition

PENNSYLVANIA

INTHISISSUE________________

Hidden hunting exposures

Cheat sheet: insuring college kids

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Hunting leases: What are the exposures?Hunting for a way to round out accounts and reduce E&O exposure? Then set your sights on insureds who hunt or lease land to hunters. Here, Jerry Milton takes his best shot at tracking down the exposures andcoverages of hunting season.

Page 12

Insurance coverage for children in collegeA question parents and their college-aged children don’t ask, but we need toask, is, “Will these college students be covered under their parents’Homeowners’ and Personal Auto policies while they’re living away from home and attending school?”

The answer may be, “Yes.” However, the answer may be, “No.” And,sometimes the answer could be, “Maybe….”

Page 18

Workers' Comp: Who, what, where, why and whenCan't get enough of Jerry Milton -- author of this month's feature articles?Then read about IA&B's upcoming Workers' Comp seminar ... developed andtaught by the coverages guru himself.

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

Copyright 2010. 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 # 2010-7) 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 Corner15 Glance at Events

17 IA&B Partners24 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.

G15276_01-11.qxp:July2010 6/16/10 6:52 AM Page 2

For All That Matters

www.acuity.com

A.M. Best A+

Get Ready Pennsylvania.Here Comes ACUITY !

For All That Matters

Interested in an agency appointment?Please contact Territory Director

Steve Harris at 717.756.9983

www.acuity.com

G15276_01-11.qxp:July2010 6/16/10 6:52 AM Page 3

OfficersKathleen M. Glattly, ChFC, CLU, CPCU

Chair of the BoardFactoryville, Pa.

David Rosenkilde, CICVice Chair of the BoardReisterstown, Md.

Robert J. “Buc” Cawley, AAIImmediate Past Chair of the BoardWexford, Pa.

MembersNorman F. Basso, CPCU

York, Pa.

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

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

Timothy P. BurrisThompsontown, Pa.

M. Scott Clemens, CIC, CPCU, CLU, ChFC Souderton, Pa.

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

G. Greg Gunn, CICLemoyne, Pa.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-PWest Chester, Pa.

Diana M. Hornung-Momot, ACSRWilmington, Del.

Linda A. McCann, AAI, CPCU, CPIWSalisbury, Md.

Michael F. McGroarty Sr.Pittsburgh, Pa.

Scott C. Rogers, CPIAYork, Pa.

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

William D. Schneider, CPCU, ARM*Pittsburgh, Pa.

Robert A. Walbeck, CICHomer City, Pa.

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

James M. Watkins*Dover, Del.

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

John S. Yasik, CICNewark, Del.

* IIABA National Director** PIA National Director

Board of Directors

Falling out of summer

Doesn’t it seem like summer gets shorter every year? Maybeit is those back-to-school ads that spring up before we evenhit the beach. Or the football fans who cannot help but wishJuly and August away. Or perhaps the season just feelsshorter compared to our carefree (read: workfree)childhood.

Like it or not, fall is just around the corner. Which makesnow the right time to think about autumn exposures.

IA&B’s coverages guru, Jerry Milton, lent his expertise to thisissue of Primary Agent magazine. In addition to his monthlycolumn, he contributed seasonal feature stories on insuringhunting leases and college students. Take a look and givesome thought to which of your customers could benefit.Reviewing their file for gaps is a smart way to round outaccounts and reduce your E&O exposure.

Want more Jerry? Log onto iabgroup.com and visit the“Coverages” section of the Web site. Or register for one ofJerry’s state-specific seminars on Workers’ Comp, whichbegin next month.

In the meantime, get out there and enjoy the remainingsummer….

Until next time,

Kathleen

[ 4 ]

Kathleen GlattlyCPCU, CLU, ChFC, AIM

Chair of the Board’sM E S S A G E

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?QUESTION: Where can I findcopies of current or new lawsenacted in my state?

ANSWER: Let’s distinguish betweennew laws and current laws.

1) New lawsBills introduced before the legislatureand later approved by the governor aregenerally accessible in each statethrough that state’s bill-tracking Website. There, the bill’s language, and anyamendments to the bill, can bereviewed. Here are our three states’ Web sites:

DE: http://legis.delaware.gov/LIS/LIS145.nsf/home?openform

MD: http://www.mlis.state.md.us/

PA: http://www.legis.state.pa.us/cfdocs/legis/home/session.cfm

w Also remember that IA&B getsinvolved in a number of differentissues in the legislature every yearand monitors many more. To viewIA&B’s position on particular issuesthat are expected to impactindependent agents, go towww.iabgroup.com, select PoliticalAction Center, and choose “ReadCapitol Connection” or “Learn andTake Action.” Generally, you canview the bill’s language right fromIA&B’s Web site.

2) Current lawsOnce the bills become effective, they are incorporated into the relevant statestatute. Each state may or may not make the entire statute available onlinefree of charge.

DE: http://www.michie.com/delaware/lpext.dll?f= templates&fn=main-h.htm&cp=decode

MD: http://www.michie.com/maryland/ lpext.dll?f=templates&fn =mainh.htm&cp=mdcode

PA: Pennsylvania does not provide itslegal library online. An individualsubscription to an online legalresearch service provider isnecessary.

For Delaware and Maryland, your searchcould start by selecting the chapter, ifyou know where to find what you arelooking for (as an example, insurance isfound under Title 18 in Delaware; inMaryland, it is codified under the“Insurance Article”).

w Note: These tools are extremelyconvenient when looking for theexact language in the law. It is,

however, not a substitute for anattorney’s legal opinion or even aregulator’s view.

Regardless of your state, remember thatIA&B can help you in any and allresearch that deals with your activities asan independent agent. If you have tolook for it, chances are we’ve had tolook for it, too!

DO YOU HAVE AQUESTION? E-mail it to us at [email protected] use “Primary Agent FAQ” in thesubject line of your message. You canalso fax your question to (717) 795-8347.We look forward to answering yourquestions!

Member FAQ

G15276_01-11.qxp:July2010 6/16/10 6:52 AM Page 5

State NewsPrimary Agent | July 2010

[ 6 ]

Producers writing contractors alreadyknow that Pennsylvania courts have upsetthe long-standing interpretation of CGLcoverage for faulty workmanship.

The Kvaerner Metals case ruled that thesubcontractor’s faulty work is not an“occurrence” under the contractor’s CGLpolicy, disregarding the exception to theexclusion built into the policy. TheGambone case went one step further andconcluded that if faulty work was not anoccurrence, consequential damage wasipso facto excluded as well … leavingeveryone to wonder what a CGL is for.

Luckily, a number of carriers started filingendorsements to restore coverage.However, based on a review of severalendorsements, it appears that many onlyexpressly restore coverage for asubcontractor’s faulty work and itsconsequential damage. Specific languagerestoring consequential damage resultingfrom the insured’s faulty work is notalways included.

What this means:Most likely, carriers that have taken the trouble to file an endorsement tocorrect Kvaerner intend to cover property damage caused by thecontractor as well. However, you can’tjust rely on an assumption.

Producers must review theseendorsements carefully and discusscoverage with their carriers and with their clients.

Carriers: If there’s no endorsement, you have a problem. If there is a “partial” endorsement, talk to the carrier.If the carrier confirms to you in writingthat they will provide coverage, or hasissued a memo to that effect, you will bemore comfortable about the coverageyou’re selling.

Clients: Once you know who covers and who doesn’t, you must discuss thisissue with your clients. Some companiesare deliberately relying on the court cases and will not provide any coverage.In these cases, the agent’s E&O exposureis substantial.

Members can learn more by visitingwww.iabgroup.com/pa/faulty_work.

CGL — Check the endorsement redefining “occurrence”

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Sprinkler mandateopens door forinsufficient HOcoverageReminder: The new sprinkler-systemmandate (effective Jan. 1, 2010 fortownhomes and Jan. 1, 2011 for single-family homes) leaves thepotential for insufficient coverage on existing homeowners’ policies. And that opens the door for “ordinanceor law” and “increased cost ofcompliance” coverage.

To learn more, visit IA&B’s onlineresource at www.iabgroup.com/pa/ordinance_law, which includes:

� an overview of the coverages(including an article by Jerry Milton),

� a synopsis of the latest sprinkler-system mandates,

� a look at how it affects existingand new business and

� a link to a sample ordinance orlaw letter for insureds.

The Pennsylvania Builders Associationis fighting the regulation — legally and possibly legislatively. IA&B willupdate members on the status of the challenge.

Red Flags RuleenforcementdelayedAffected agencies have additional timeto get their consumer-protection ducksin a row. The FTC at the eleventh hourpostponed enforcement of the RedFlags Rule from June 1 until Dec. 31.

IA&B members can determine if theywill be impacted — and learn how tocomply — by visitingwww.iabgroup.com/pa/red_flags.

Note: Several professional trade groupshave filed suit against the FTC arguingthat their members should be excluded,and a bill is pending in Congress thatwould exempt many of these trades.IA&B will continue to monitor theoutcome of these — and theimplications for insurance agents.

[ 7 ]

New MembersW E L C O M E

Gary E. Faye & AssociatesLigonier, Pa.

CompanySatisfaction Indexsurvey openthrough July 31IA&B’s biennial member survey oncarrier relations is open. All memberagency staff are encouraged toevaluate at least their top threecarriers in the Company Satisfaction Index.

The benefits? Strengthening agent-company relations and improvingcommunication and workflows. Thetool is used by members to gaugetheir carrier relationships and tobenchmark companies beforeaccepting appointments. Carriers useit to learn what they’re doing welland what needs work.

The Company Satisfaction Indexsurvey will be open through July 31.Results will be released in October.

Members can participate by visitingwww.iabgroup.com/pa/csi.

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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 contributed

this article on behalf of Utica

Mutual Insurance Company in

Utica, N.Y.

Insurance Agents & Brokers

Service Group Inc. is the

exclusive agent for the Utica

E&O program in Delaware,

Maryland and Pennsylvania.

For questions regarding this

article or your Errors &

Omissions coverage, contact

IA&B at (800) 998-9644 or by

e-mail at [email protected].

WHAT IS THE RIGHT PROPERTY LIMIT? NOT AN EASY QUESTION TO ANSWER, IS IT?

Primary Agent | July 2010

As I travel around the countryand talk to agents atconferences and seminars,resolving the “right” propertylimit appears to be one of thetop five issues agents facetoday. Whether for thebuilding or contents coverage,it seems to be morechallenging than one maythink. The focus of this articleis the commercial propertyexposure, and the problem isthat the limit on the policy isnot an area of concern untilthere is a claim – but by then,it’s too late to do anythingabout it.

Many approachesThere are many approachesto securing a property limit. Inno particular order:

Using the companyapproximator tool. Thiscould be one they designedthemselves or one of themore common industry toolssuch as MSB. Using one ofthese is a good starting point,and proper use should resultin a quality output.

However, incorrect inputs willresult in questionable outputs.Ensuring that you have fulland correct information is key.Without this, errors couldoccur. Whether it’s inputtingan inaccurate square footage,picking potentially incorrectconstruction components orassessing the quality of theconstruction, this can lead toan output drastically off thecorrect mark.

Just because you used acompany “approximator”does not guarantee the carrierwill honor that number. Willthey turn their back on you?It’s happened before!

Using the limit on thecurrent policy. The problemwith this approach is that itassumes the correctcalculation was done by theprior agent.

Asking the customer whatlimit they want. While thereare some scenarios where this is not advisable, I believecommercial clients are moresophisticated regarding

rebuilding costs thanhomeowners’ clients. Thus,this approach has a degree of merit.

Assist them in understandingthe terms unique to propertycoverage like co-insurance,Actual Cash Value,Replacement Cost, AgreedAmount, etc. Are there some agents/CSRs on yourteam who might struggle with explaining what theseterms mean and what theimpact could be in the event of a claim? It’s not a bad idea to include examplesin your proposal on howthese terms work.

Relying on the customer toprovide a limit seems like theagent may be shirking theirresponsibilities. At the time ofthe claim, if the customerdoes not receive fullcompensation, my guess isthat they will not be veryhappy. Whether this results ina claim against you is difficultto say, but losing thecustomer is probably a given.

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Requesting that the customersecures a professional appraisal.This is probably the best overallapproach. These cost money, butthere is no doubt that they are worth it.

Pulling the information from variousWeb sites. I do not suggest thisapproach as there is no guaranteethat these sites reflect current andaccurate information.

Using what you think is accurate,with the presumption that thecarrier will inspect it and catchyour errors. This is not arecommended approach. Everycarrier has its own guidelines on whatthey will inspect, and there are veryfew carriers that inspect everylocation. In the event of a claimagainst your agency due to an errorin the property limit, a defense usedby most E&O carriers would involvebringing the carrier in and stating thatthey had either inspected the locationor had a chance to inspect it and thatthey should have advised your agencyof a problem. This does have somemerit, but a stronger focus on tryingto calculate the right number upfrontis preferred.

A moving targetFor business new to your agency, takethe time to secure the necessary datato perform the calculation. Thisshould involve a visit to the locationby the producer/agency loss-controlspecialist to help secure the correctinformation. Take measurements andask the necessary questions regardingconstruction. This will enable you tomore accurately determine theinsurance to value. DO NOT simplypull up the key input information

from the current policy, as this mightnot be accurate and will probablyresult in a questionable output due toless-than-quality inputs.

As you can imagine, there have beena significant number of E&O claimsdealing with the policy property limits.For example:

The client owned a bowling alley thatburned to the ground and claimedthe agent procured insufficient limits,resulting in a shortfall of $3 million.The agent stated that the clientprovided the figures for the building,and further said the client wasadvised they should consider usingan appraisal service. The client saidthe agent affirmed the coverageamount was the proper coverage.The agent denied this.

In that particular state, there is noduty to inform a client how muchcoverage they should have. The clientmade the argument that the agentassumed a duty (regarding limits)when he told the client the coveragewas sufficient. This was a classic wordvs. word scenario, with nothing inwriting to back up either side. Thedamages were also in dispute, as theclient was claiming replacement costvalue, even though the vacant lot wasfor sale. The claim eventually settledfor $1 million.

Lesson to be learned: Be carefulhow you respond if the customer asksyou if their property limit is sufficient.In the event of an underlying claimwhere it is resolved that the limitswere inadequate, the client will allege they relied on your advice totheir detriment.

Calculating the right property amount is somewhat of a “movingtarget.” Secure as much of the correct information as possible. The time you spend up front mayjust save you time later if you are hitwith an E&O claim.

GoodvilleMutualNew Holland, Pa.

Contact Fred Macy, [email protected]

Partnering with the finest independent agentsfor over 80 years

G15276_01-11.qxp:July2010 6/16/10 6:52 AM Page 9

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.

MULTI-MILLION VERDICTS


In March 2010 The NationalLaw Journal published apaper titled “Top 100 Verdictsof 2009.” This paper wascompiled by VerdictSearch, an organization that relies on submissions fromattorneys, court decisions,other legal publications andInternet searches in order topresent a comprehensive listof jury verdicts.

The verdicts are ranked onthe basis of the gross award.They do not reflect anyreductions for comparativenegligence or assignment offault, or attorney fees andcosts (unless awarded by thejury). If the awards weretripled or doubled by statestatute, the tripled or doubledamount determined the rank.

The publication included thefull details of the top 21 casesin 2009. In addition, theyreported that in 2009premises liability awardsincreased 16.4 percent to anaverage of $242,782, motorvehicle awards jumped by38.8 percent to an average of

$48,480, and wrongful claimsaveraged $2,185,000.

The number one award for2009 involved a girl who waskilled in a car crash with adrunken driver who ran astop sign.

On April 12, 2007, ShelbyHagman, a 13-year-oldstudent, was riding in hergrandparents’ KIA Sedona vanwhen Christopher Marconeran a stop sign and hit thevan. Shelby suffered a fatalbrain injury in the accident.Marcone, whose bloodalcohol level measured .207,pleaded guilty to DUImanslaughter and three otherrelated charges.

Angela Stone, Shelby’smother, sued Marcone fornegligent operation of amotor vehicle. She also suedKIA, the van’s manufacturer,claiming the seat belt Shelbywas wearing was defective.The case against KIA is still pending.

The case of Estate of Hagmanv. Marcone was heard in

Hernando County, Florida.The jury rendered a verdict of$330,516,483. I promise you, Ididn’t make a mistake. Over$330 million is correct! Thisaward is believed to beamong the largest DUIwrongful-death awards evermade in the United States.

Number 21 involved acontestant in a radio contestwho died from waterintoxication. This case wasStrange v. EntercomSacramento, LLC and washeard in Sacramento County,Calif. The jury verdict was amere $16,577,118.

Pennsylvania had one case inthe top 21, Maryland hadnone, and Delaware hadnone. The Pennsylvania casewas Mendez v. City ofPhiladelphia and was numbersix on the list. The caseinvolved a tree collapsing on a vehicle and paralyzingthe driver.

On a rainy and windy July 28,2006, Natalia Mendez wasdriving her car onCheltenham Avenue in

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Philadelphia, when a curbside treeuprooted and fell on top of her car. The tree was adjacent to the property of Cornelius Burgess, Jr. who had hired Jesse Williams And Sons Cement Work to replace the property’ssidewalk in August 2005. The sidewalkpresented a hazard to pedestriansbecause it was uneven due to the rootstructure of the tree. The renovationsincluded cutting the tree roots and re-cementing the sidewalk.

Mendez sued Burgess and Williams, aswell as the Fairmount Park Commissionand the City of Philadelphia. Burgesssettled for his policy limits of $100,000.Williams failed to appear and defaultjudgments were entered against himand his business.

Burgess said that he had talked to cityofficials and the park commission aboutthe condition of the tree to no avail. Sixdays before the accident, Burgessclaimed he noticed the tree leaning andan opening crack in the groundbetween the tree and the new sidewalk.

The jury verdict for Mendez and against the City of Philadelphia was$61,000,000.

You know the age-old question, “How much liability coverage do I need?” I don’t know about you, but as for me, the answer is, “Gosh, I really don’t know.”

Y’all take care!

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COVERAGES

Hunting for a way to roundout accounts and reduceE&O exposure? Then setyour sights on insureds whohunt or lease land tohunters. On the followingpages, Jerry Milton takes his best shot at trackingdown the exposures and coverages of hunting season.

Hunting leases: What arethe exposures?

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In my youth I was an avid hunter — deer, quail, turkey,squirrel, rabbit, dove … you name it. By the way, youdon’t hunt dove. You go on a dove shoot. You andseveral other hunters stand around the edge of a field

and wait for the dove to fly over and around that field. Then you try to shoot them without spraying another hunterwith buckshot.

One of the most feared cries on a dove shoot is, “Low bird!”That means a dove is flying over the field and is only three orfour feet above the ground. When you hear that cry, you hitthe ground because there’s always one sorry rascal who willtake a shot at that bird. If you’re in the line of fire, you mayfind yourself picking buckshot out of your legs, arms or otherparts of the body. And the rascal who took that shot will notbe invited back!

Back in the ‘60s, ‘70s and ‘80s, I had my hunting buddies. We would load up early in the morning and head to thewoods. If it was quail season, loading up included the dogs.We had families and friends who owned land. We knew afew farmers who didn’t mind if we hunted on their land.When we asked them if we could go hunting on theirproperty, their usual response was, “Y’all be careful!”

Arrangements and exposuresNot any more. Today, unless you or your family owns land,it’s tough to find a place to hunt. Why? Farmers and otherlandowners have discovered that hunters are willing to payfor the privilege of hunting on their land. They typically waitfor an individual or a group of individuals to step forwardand offer them money for the exclusive rights to hunt ontheir land. In other words, they lease their land to others forhunting purposes only.

You may have insureds who own land and allow others to hunt there. Do they charge or do they allow family and friends to hunt for free? Why is this important? If free, it’s a personal exposure. If they charge, it’s probably acommercial exposure.

Very likely you have one or more insureds who have leasedland for hunting purposes. Did they lease the landindividually or as part of a group? These groups ofindividuals usually call themselves “hunting clubs.” If theyare a “hunting club,” did they create a paper entity such as apartnership or a limited liability company? Probably not.Most don’t. They simply operate as a group of individualswho contributed a few hundred dollars each and thereforeare permitted to hunt on a specific plot of land. In addition,

You may have insureds who

own land and allow others to

hunt there…. If free, it’s a

personal exposure. If they

charge, it’s probably a

commercial exposure.

I

G15276_12-17.qxp:July2010 6/16/10 7:01 AM Page 13

these “clubs” usually allow themembers to invite their familyand friends.

Will the Homeowners’ policycover these exposures? If not, isa Commercial General Liabilitypolicy needed? Unfortunately,the answers to these twoquestions depend on theparticular circumstances. Is thehunting free or does it cost? Isthe “club” a paper entity(partnership, LLC, etc.) or is itjust a group of individuals?These questions have to beresolved before we candetermine whether theHomeowners’ policy will applyor if a CGL is needed.

_______________________________

Persons who lease land for hunting

purposes have liabilityexposures for any

injuries or damages. _______________________________

Land leasersLet’s discuss the exposures ofthose persons who, individuallyor as a member of a huntingclub, lease land for huntingpurposes. They have liabilityexposures for any injuries ordamages to others arising out oftheir activities or a conditionthat exists in the leased land.

For example, if they accidentallyshoot another hunter or thefarmer’s cow, that’s a personalactivity and should be covered

by their Homeowners’ policies.What type of injuries or damagecould result from a condition ofthe premises? Another huntermay fall out of a tree, slip off alog crossing a creek or step in apothole and break a leg. Couldthat other hunter file a claimagainst the individual or groupof individuals who lease theland, alleging they failed toproperly maintain that land?Possibly. Will the Homeowners’policy respond to this type ofclaim? Maybe.

The Homeowners’ policydefines eight “insuredlocations.” This definition of an“insured location” includes:

1. Any part of a premises not owned by an insuredand where an insured istemporarily residing. (This definition could applywhile the insured is presenton the premises if theleased land has a cabin ora mobile home. The keyword is “acquired.” Does a lease constituteacquisition?)

2. Vacant land, other thanfarm land, owned by orrented to an insured. (Iwouldn’t want to rely onthis definition. First, theland is probably not“vacant.” Secondly, muchof the land that is leasedcould include land that is farmed in the spring and summer.)

3. Any part of premisesoccasionally rented to an

insured for other-than-business use. (The key tothis definition is“occasionally.” Land leasedon a long-term basis oryear after year on a short-term basis probably wouldnot qualify.)

In addition, the Homeowners’policy excludes liability andmedical payments to othersarising out of premises ownedby an insured or rented to an insured that is not an“insured location.”

Relying on an unendorsedHomeowners’ policy to coverthe leased land as an “insuredlocation” is not a good idea.The safest method is toschedule the leased land as an“Additional Insured Location —Section II.”

If the group of individualsleasing the land have formed apartnership, LLC or any otherpaper entity, they shouldpurchase a CGL. A CGL is alsoneeded if the individual orgroup of individuals who leasethe land do not form a paperentity, but charge others a fee tohunt the land.

Land ownersWhat about those folks whoown land and lease that land toothers for hunting purposes?Can they rely on theirHomeowners’ policies or, ifthey’re farmers, on theirFarmowners’ policies forliability coverage? Again,maybe, maybe not.

COVERAGES

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The Homeowners’ policyexcludes liability and medicalpayments to others arising outof premises rented to othersthat is not an “insured location.”Is the leased land part of theirresidence premises or is it usedin connection with theirresidence premises? Is it vacantand not used for farming? If theanswer to either of thesequestions is yes, the land couldbe considered an “insuredlocation.” But what about theHomeowners’ businessexclusion? I think it wouldapply. Therefore, no coverage.

The Farmowners’ policy alsohas a business exclusion.However, the exclusion doesnot apply to farming or

ranching activities or activitiesthat are incidental to farming or ranching activities. Couldleasing land for huntingpurposes be consideredincidental to farming orranching activities? That’squestionable.

If the landowner’sHomeowners’ or Farmowners’policy cannot be endorsed toclearly cover the leasing of landfor hunting purposes, we againmust recommend a CGL. Somelandowners have begunrequiring Certificates ofInsurance from the groupleasing the land. Not a bad idea.But it’s always dangerous tototally depend on someoneelse’s insurance for coverage.

We have two parties involved ina hunting lease – the landownerand the individual or group thatleases the land. If either partyrelies on their unendorsedHomeowners’ or Farmowners’policy to fully cover theirliability exposures for thisarrangement, they could be introuble. If the Homeowners’ orFarmowners’ policy cannot beendorsed to cover theseexposures, then bite the bulletand purchase a CGL. Better safethan sorry!

Y’all take care!

________________________________

Jerry M. Milton, CIC


Date Topic Location

6 CISR-Commercial Casualty Altoona, Pa.

7 CISR-Commerical Casualty Mars, Pa.

8 CISR-Commercial Casualty Monroeville, Pa.

13 CISR-Commercial Casualty Reading, Pa.

14 CISR-Commercial Casualty Frederick, Md.

14-17 CIC-Personal Lines Cranberry Township, Pa.

20 William T. Hold Seminar Hanover, Md.

Mistakes That Lead to E&O Claims Wilkes-Barre, Pa.

21 CISR-Commercial Casualty Mechanicsburg, Pa.

21-24 CIC-Life & Health King of Prussia, Pa.

22 William T. Hold Seminar Lancaster, Pa.

27-29 P&C Licensing Study Course Langhorne, Pa.

28 Dynamics of Service Canonsburg, Pa.

Pennsylvania Compliance Pitfalls Erie, Pa.

29 Pennsylvania Compliance Pitfalls Altoona, Pa.

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

[ 15 ]

G15276_12-17.qxp:July2010 6/16/10 7:01 AM Page 15

FEATURED PARTNERMutual Benefit Group

CHIEF EXECUTIVE OFFICERSteven C. Sliver, President and CEO

COMPANY LOCATIONHuntingdon, Pennsylvania

A.M. BEST RATING “A-” (Excellent)

WEB SITEwww.mutualbenefitgroup.com

Insurance Agents & Brokers proudly recognizesMutual Benefit Group as one of its Platinum Partners.IA&B Platinum Partners dedicate the highest level ofsponsorship to our organization.

The snow flew, the windblew, and the claims grew. As record-breaking storms peltedtowns across Pennsylvania andMaryland in February, MBG’sadjusters found themselves tacklingtriple the number of claims theywould handle during a normal week.Yet they remained focused ondelivering The MBG Experience.

“As the results of our quarterly claimsservice surveys began to roll infollowing the storms, it was gratifyingto read the comments and know thatour claims staff stood the test undersignificant pressure,” commentsMutual Benefit CEO Steve Sliver. “Anumber of our policyholders wereimpressed, and felt compelled to say‘thank you’ for The MBG Experience.”

At the heart of The MBG Experience isan uncommon commitment toresponsiveness. More than 250independent agents and 95,000

policyholders can count on MBGemployees to go the extra mile,whether it’s handling a catastrophicclaim; building an online ratingsystem that meets the needs ofagents; reassuring an elderlypolicyholder that her payment hasarrived on time; or offeringunderwriting flexibility on acommercial account.

Employees themselves can count onan uncommon level of response fromone another as they work together toget the job done. They can also counton uncommon support from MBGmanagement; this past year, MutualBenefit was named one of The BestPlaces to Work in Pennsylvania. Andthe community can count onresponsive corporate citizenship yearafter year as Mutual Benefit reachesout, even in difficult economic times,to support local hospitals, firecompanies, and colleges.

The word “experience” came upnumerous times in February’s claimsurvey comments: “This was anexcellent, professional experience”...“I’m grateful for the trouble-freeexperience”… “Outstandingexperience!”… “My first experiencewith Mutual Benefit was excellent” …“We’re glad to be long-timepolicyholders. We’ve never had a badexperience with Mutual Benefit”…“The best experience I ever had withan insurance company!” But thecomment that perhaps best capturesthe responsiveness that is The MBGExperience came from a gratefulpolicyholder in Baltimore: “Youradjuster’s compassion alone was atremendous reassurance that myinsurance company works for me. I have told all of my friends what a wonderful company Mutual Benefit is, and how fortunate I feel.You were there for me, and I reallyappreciate that.”

Platinum Profile

Mutual Benefit Group Claims Staff

G15276_12-17.qxp:July2010 6/16/10 7:01 AM Page 16

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Primary Agent July 2010

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

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Countryway Insurance Company

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

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Rhoads & Sinon LLP

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State Auto Mutual Insurance Company

TAPCO Underwriters Inc

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The Mutual Service Office Inc

The Philadelphia Insurance Companies

Tuscarora Wayne Insurance Company

UPAC Insurance Finance

G15276_12-17.qxp:July2010 6/16/10 7:01 AM Page 17

COVERAGES

A question parents andtheir college-aged childrendon’t ask, but we need toask, is, “Will these collegestudents be covered under their parents’Homeowners’ and PersonalAuto policies while they’reliving away from home andattending school?”

The answer may be, “Yes.” However, the answermay be, “No.” And,sometimes the answercould be, “Maybe….”

Insurance coverage forchildren in college

G15276_18-23.qxp:July2010 6/16/10 7:07 AM Page 18

[ 19 ]


So, why don’t you and I spend a few minutes togetherand review how the parents’ Homeowners’ andPersonal Auto policies cover their children whenthey’re away at college.

Let me caution you. This discussion is based on the wordingof the Insurance Service Office’s (ISO) Homeowners’ andPersonal Auto forms. You know better than I do that manyinsurers have their own company-specific forms, and theirpolicy provisions may not be identical to those found in theISO forms. As always, consult your insurers’ forms todetermine if their terms and conditions are the same,broader or more restrictive than the terms and conditionswe’ll discuss today.

The Millers’ 21-year-old son, Buster, and their 18-year-olddaughter, Princess, have loaded their cars and are headed tocollege. Buster is entering his junior year, and Princess willbe a freshman. Buster is sharing an apartment with three ofhis fraternity brothers, and Princess will live in the dormitory.

Homeowners’ policyWill their “stuff” – clothes, computers, TVs, music systems,books, etc. – be covered under their parents’ Homeowners’policy? Will they have liability coverage if they cause injuryor damage to another person? The Homeowners’ definitionof “insured” includes “a student enrolled in school full-time,as defined by the school, who was a resident of yourhousehold before moving out to attend school, provided thestudent is under the age of 24 and your relative.”

Therefore, as long as Buster and Princess satisfy threerequirements — full-time student, resided at home before attending school, and under the age of 24 — they’re considered an insured under their parents’Homeowners’ policy.

What if it takes Buster five or six years to complete hisundergraduate degree or Princess decides to attend graduateschool? If they reach the age of 25 before completing school,they’re no longer insureds. However, there is an ISOendorsement, Additional Insured – Student Living Away Fromthe Residence Premises (HO 05 27), that can be used toextend coverage under the parents’ Homeowners’ policy tothe student who is age 25 or older.

Since Buster and Princess are insureds, their “stuff” will becovered for the same perils as the personal property locatedin their parents’ home. However, it could be limited. TheHomeowners’ policy’s limit of liability for “personal propertyusually located at an ‘insureds’ residence, other than the

As long as Buster and Princess

satisfy three requirements,

they’re considered an insured

under their parents’

Homeowners’ policy.

S

G15276_18-23.qxp:July2010 6/16/10 7:07 AM Page 19

‘residence premises,’ is 10percent of the limit of liabilityfor Coverage C, or $1,000,whichever is greater.”

Therefore, if the Millers’ homeis insured for $200,000 and theyhave a personal property limitof $100,000, the “stuff”belonging to Buster andPrincess is limited to $10,000.This may be enough for Buster,but probably not for Princess.(I’ve raised a son and adaughter!) Again, there is anISO endorsement to addressthis problem. The PersonalProperty at Other Residencesendorsement (HO 04 50) allowsyou to purchase an additionalamount above the 10 percent ofCoverage C limitation.

_______________________________

One area where theHomeowners’ policy

provides broader coveragefor a student’s personalproperty than for their

parents’ personal propertyis if the loss is due to theft.

_______________________________

One area where theHomeowners’ policy providesbroader coverage for a student’spersonal property than for theirparents’ personal property is ifthe loss is due to theft. Underthe peril of theft, theHomeowners’ policy excludesloss caused by theft “that occurs

off the ‘residence premises’ ofproperty while at any otherresidence owned by, rented to,or occupied by an ‘insured,’except while an ‘insured’ istemporarily living there.”However, this exclusion thenstates, “Property of an ‘insured’who is a student is coveredwhile at the residence thestudent occupies to attendschool as long as the studenthas been there at any timeduring the 60 days immediatelybefore the loss.” This exceptionto the exclusion providescoverage for the personalproperty of college studentswhen they’re home betweensemesters.

One last comment onHomeowners’ coverage forcollege students. If they’re livingin an apartment rather than adormitory or a fraternity orsorority house, and qualify,purchase a Tenant Homeownerspolicy (HO-4). It’s worth the few extra dollars. I’ve beenthere, too!

Personal Auto policyBuster and Princess probablyhave their own cars. After all, itwould be un-American to senda child off to college todaywithout their own automobile.Are there any concerns here?Could be.

Who owns the cars? If titled inthe kids’ names, then they needtheir own Personal Autopolicies. What limits will theybuy? Probably minimum. Sincethey’re “family members,” willthey have any coverage under

their parents’ Personal Autopolicy? No. The Personal Autopolicy excludes liability for “theownership, maintenance or useof any vehicle, other than ‘yourcovered auto,’ which is ownedby any ‘family member.’”

If the Millers have a PersonalUmbrella, will Buster andPrincess be insureds under thatpolicy? Probably. However, inthe event of a serious liabilityclaim against Buster orPrincess, there could be a majorgap of no coverage since Busterand Princess did not purchaseand maintain the underlyingauto liability limits required bythe Personal Umbrella insurer. I think this is a problem thatfrequently exists when the kidsown the cars, buy the insuranceand expect to have coverageunder their parents’ PersonalUmbrella policy. Unfortunately,I’ve also been there.

What if the cars driven byBuster and Princess are ownedby the parents? No problem aslong as they keep those carslisted on the Millers’ PersonalAuto policy.

But, what if Mr. and Mrs. Millerare tired of paying those highpremiums for the car driven byBuster and they tell him, “Whenyou get settled in school, find alocal agent and buy an autopolicy in your name.” TheMillers then remove that carfrom their Personal Auto policy.

What liability limits will Busterbuy? Minimum. That’sguaranteed! Remember, theparents still own the car. A

COVERAGES

[ 20 ]

G15276_18-23.qxp:July2010 6/16/10 7:07 AM Page 20

good agent will probablydiscover whose name is on thetitle and list the Millers asnamed insureds on thisminimum limits policy. A sorryagent may issue this policy inBuster’s name.

_______________________________

In order to transfer theauto risk, you have to

transfer the title.

_______________________________

If Buster is involved in anaccident, if the Millers are thenamed insureds, they will havethose minimum limits. If theMillers are not named on thepolicy purchased by Buster, theycould still be covered as “familymembers.” However, be carefulhere. Buster is probably insuredwith a nonstandard insurerwhose terms are not as broadas the ISO Personal Auto policy.

What about coverage undertheir Personal Auto policy thathas a liability limit of $300,000?No coverage there. ThePersonal Auto policy excludesliability for “the ownership,maintenance or use of anyvehicle, other than ‘yourcovered auto,’ which is ownedby you.” Again, a gap before thePersonal Umbrella responds.

Too often parents of collegekids think if they transfer theauto insurance to the kids,they’re getting rid of theexposure. Not true. In order totransfer the auto risk, you haveto transfer the title.

Cheat sheetLet’s wrap this up….

� Make sure your insureds’children who are away atcollege are still considered“insureds” in theHomeowners’ policies you write.

� Increase the 10 percent ofCoverage C limitation onthe student’s personalproperty, if necessary.

� Write a TenantHomeowners’ policy forthe student, if possible.

� If the parents still own thecar being driven by thestudent, that car should be

insured under the parents’Personal Auto policy.

� If the parents want to takethe student off of theirPersonal Auto policy tosave money and have thestudent purchase theinsurance, they shouldtransfer the car to thestudent.

Will those college students becovered under their parents’policies? That’s up to you!

Y’all take care!

________________________________

Jerry M. Milton, CIC

[ 21 ]


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[ 22 ]

COVERAGES

Workers’ CompLearn the who, what, where, why and when

Can’t get enough of JerryMilton — author of thismonth’s featurearticles? Then register

for IA&B’s upcoming Workers’Comp seminar … developedand taught by the coveragesguru himself.

IA&B teamed up with Milton toproduce state-specific Workers’Comp seminars, which will beheld throughout Delaware,Maryland and Pennsylvaniaover the next two months. (Seesidebar for locations and dates.)

The course covers classificationand rating, experience-ratingplan, and federal compensationand liability laws.

Attendees will learn:

� How to pinpoint andcorrect errors onexperience-ratingworksheets in order tokeep and write moreaccounts;

� How to review commonclaims involvingindependent contractors,statutory employer issuesand extra-territorialconditions to reduce E&Oexposure; and

� What state-specific lawsgovern Workers’Compensation.

Registration is available byvisiting www.iabgroup.com/education/sp_work_comp.html.

Seminar locations, datesand times:

Erie, Pa. Aug. 24

Pittsburgh, Pa. Aug. 25

Hagerstown, Md. Aug. 31

Mechanicsburg, Pa. Sept. 1

Dover, Del. Sept. 2

Allentown, Pa. Sept. 28

King of Prussia, Pa. Sept. 29

Hanover, Md. Sept. 30

Registration: 7:30–8 a.m.

Seminar: 8 a.m.–5 p.m.

Register: www.iabgroup.com/education/sp_work_comp.html

CJERRY MILTON, CIC

G15276_18-23.qxp:July2010 6/16/10 7:07 AM Page 22

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Through AgentPAC, IA&B can work to elect legislators whounderstand you. IA&B is a strong advocate for you, but even thestrongest advocate cannot succeed unless there are legislators who

understand the issues faced by independent agents — that is where your support matters!

Help IA&B support legislators who understand independent agents. Contribute to your state AgentPAC.

VISIT IABGROUP.COM OR CALL THE IA&B MEMBER SERVICE CENTER TOLL FREE AT (800) 998-9644 OR LOCALLY AT (717) 795-9100, OPTION 0 FOR MORE INFORMATION.

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G15276_18-23.qxp:July2010 6/16/10 7:07 AM Page 23

A BALANCED APPROACH TO AGENCYMARKETING

Primary Agent | July 2010 TechnologyU P D A T E

[ 24 ]

Insurance agency marketing andsales are being transformed rightbefore our eyes. Daniel Burrus, a technology forecaster, said inhis January 2009 Technotrendsnewsletter:

We are now at the dawn ofa profound technology-driven transformation thatwill make the changes wehave experienced over the

past 25 years seems smalland slow. We are about totransform how we sell,market, communicate,collaborate, innovate, watchTV, learn and, as you mightguess, much more.

The implications of this“technology driventransformation” for insuranceagencies are significant. The

marketing activities that agencieshave relied on for many years toretain existing clients andgenerate new business are notgoing to continue working aswell as they have in the past. The new consumer is using theInternet for researching all types of purchases, includinginsurance policies. New mobilecomputing platforms, including

STEVE ANDERSON

Steve Anderson has been

involved with the insurance

industry for over 30 years and is

an active participant in ACT. He

is a frequent speaker before

agent and industry groups,

consults with insurance agencies

and publishes numerous

reports, as well as the monthly

“The Anderson Agency Report.”

Steve can be reached at

[email protected].

Steve prepared this article for

ACT. 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.

G15276_24-28.qxp:July2010 6/16/10 7:12 AM Page 24

iPads, iPhones and other mobile devices, are redefining what it means to“stay in touch.”

Yet, even with all the new “stuff” thatpeople are using in their daily lives,people still want to buy from people. Andthis is why independent agencies shouldnot be afraid of this transformation.Agencies can take advantage of thistransformation and grow their agencies,if they are willing to think differentlyabout marketing and sales.

Six key elements of asuccessful strategyThe keys to building a profitable book ofbusiness are:

� A balanced approach to marketingand sales

� Fixing an agency’s follow-up failure

� Create high-touch activities usinghigh-tech tools

� Creating processes and systems

� Commit to the long haul

� Constant attention

Ross Dik owns Knight Dik Insurancelocated in Worchester, Mass. Thisindependent agency focuses on personal lines and small commercialaccounts. They have 12 employees andare located on the ninth floor of adowntown office building (with a securityguard), which means they don’t get a lotof walk-in traffic. Dik realized five yearsago that in order to continue to grow theagency he needed to create processesthat would generate profitable business.He started working on creating processesthen and there.

Understanding that technology was a keycomponent of creating these processes,we began working together four yearsago and combined our skills to “crack the

code” of creating a high-margin,profitable book of personal lines andsmall commercial business.

A balanced approachMost agencies focus their time andresources on obtaining new business. As we began to work, we realized that abalanced approach is the key to creatinga profitable book of business. A balancedapproach includes these four pillars of profitability:

Keep: This is simply retention. Being ableto “keep” the accounts you already have.Agents have heard for years that it iseasier and more profitable to retain anexisting client than it is to generate a newone. Yet many agencies don’t haveprocesses in place to actively retain theseimportant clients. The renewal processshould start immediately after the firstpolicy is sold. This is very different fromthe renewal event, which takes place six


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G15276_24-28.qxp:July2010 6/16/10 7:12 AM Page 25

TECHNOLOGY UPDATE

or 12 months later. A renewal processactively builds an ongoing relationshipwith that new client from the verybeginning of the relationship.

Upgrade: Every agency has additionalrevenue sitting in their existing book ofbusiness that is just waiting to beextracted. A simple example of upgradeswould be identifying those individualswho have automobile liability limitsbelow the agency’s recommended level.Dik created a process where individualswith lower limits would receive in themail prior to their renewal a copy of theirauto Dec Page with a big red stamp on itstating: “Your policy has coverage limitsless than we suggest.” Everyendorsement to raise limits representsadditional profit for the agency with very little effort. It also significantlyenhances the agency’s E&O protection.There are many opportunities to upgradeexisting business.

Round out: It’s common knowledge thatthe more policies written per account, the longer that account will stay with you.By creating a process that identifiesopportunities for additional business, this important marketing activity is notleft to the whim of a CSR rememberingto ask to quote a policy the agency doesnot yet write.

Get more: Generating new business isimportant in order to have a healthyagency. Yet, new business is specificallylisted last on purpose. While mostagencies focus on generating newbusiness, it is actually more profitable tofocus on the three other pillars ofprofitability first — keep, upgrade andround out. Creating a “get more” processhelps generate a constant flow of newbusiness into the agency. Once that newbusiness is put on the books, the otherprocesses will help make that newbusiness as profitable as possible.

Benefits There are many benefits to building abalanced approach like the onedescribed above. It creates more revenuefor the agency and builds a higher-margin book of business. Activelypursuing upgrades and rounding outaccounts helps build a much better bookprofile, which generally translates intobetter loss ratios for that book that helpincrease agency contingency payments.All of this makes for happier insurancecompanies who are then more willing toinvest in and provide additionalresources to the agency so that they can continue to grow.

The long haulWe said above that one of the keys toprofitability is being willing to commit tothe long haul. This is not a quick-fixprocess. It takes time and discipline toimplement and make sure it continuesrunning. Those agencies, however, thatare willing to commit to the process willsee results – over time.

5-by-5 processWe believe a reasonable goal is what wecall the “5-by-5 process.” When yougrow the following five areas by 5percent over five years, you will thenexperience balanced growth. The fiveareas are:

Average policy premium: An activeupgrade process will help you increaseyour average policy premium.

Average policies per account: An activeround-out process can’t help but increaseyour average policy per account.

Retention (.5 percent each year):We understand that it is really hard toaffect retention, so we cheated here alittle bit. If you can grow your retentionrate by half a percent per year, you aredoing well.

New clients: An active marketingprogram will help you generate newbusiness so that you can create 5 percentnew clients each year.

Overrides and bonuses: Finally, youshould have at least 5 percent of yourrevenue being generated from overridesand bonuses received from yourinsurance companies.

An exampleTo illustrate these points, let’s turn toKnight-Dik Insurance again.

The agency began experimenting withgenerating new business by purchasingInternet leads. They started bypurchasing 100 leads per month. Theydetermined that they needed an 8percent close ratio to break even. Dikwas skeptical at first about the quality ofthese leads: “They are just looking for acheap price; they won’t convert; theywon’t stay.” But even with thesereservations, Dik committed to workingon creating a system for several months.

The marketing process Dik created wasmanaged by individual CSRs within theagency. When a lead was received, it wasimmediately entered into the marketingsystem, and an e-mail was generatedautomatically to tell the prospect that theagency was working on a quote. Whenthe quote was completed, they sent an e-mail with the quote to the prospect. Theythen created several follow-up steps tocontact that prospect by e-mail andphone. One of those follow-up stepsincluded an e-mail with a video of theproducer talking to the prospect.

They continued to track results and refinethe initial contact and follow-up process.After some experimentation, they addedan additional step to the follow-upprocess which ended up doubling theresponse. They printed out a form letterand mailed it with an agency brochure tothe prospect. This simple step increasedthe number of people who responded to

[ 26 ]

G15276_24-28.qxp:July2010 6/16/10 7:12 AM Page 26

their follow-up requests. This is anexample of how to combine high-techand high-touch into the process.

We mentioned above that the renewalprocess should start immediately after thepolicy is sold. Every new client to theagency is started immediately on a “NewClient Welcome” process. The first e-mail(or letter) goes out welcoming the newclient to the agency. Eight other touchesthen are automatically sent to the newclient over the next 90 days. That clientshould feel very welcomed to the agencyand will hopefully not bother to shopwhen the policy comes up for renewal.

Knight-Dik continues to purchase Internetgenerated leads. Today their close ratioon this business has been as high as 20percent with an average of 11-15 percent.They started purchasing personal autoleads but now focus primarily on

homeowner leads. They have found thehomeowner leads are generally betterquality, and they avoid direct competitionwith GEICO and Progressive Direct.Because they have an active round-outprocess, they work on picking up theautomobile later.

ConclusionGenerating a profitable, high-marginbook of business requires a balancedapproach to marketing and sales – builton processes that are sustained over thelong haul. Creating a solid foundation foryour agency requires that you keep thebusiness you have (retention), upgradecoverages so that you can extract themoney sitting in that book (and providebetter E&O protection), round out eachaccount with as many policies as you can,and get more business by takingadvantage of the transformation that isoccurring in agency marketing.

_______________________________

Editor’s note: You can subscribe to Steve Anderson’s free weekly e-mailed newsletter, “TechTips,” by visitingwww.steveanderson.com/act. Tech Tips is a quick read andhighlights one new “thing” thatwill help your organizationincrease its productivity andeffectiveness.

Members can hear more fromSteve Anderson at IA&B’s 2010Executive ManagementConference, Oct. 26-27 inLancaster, Pa. He is acting as anadvisor for curriculumdevelopment and will speak atthe event. Look for conferencedetails in Agent Headlines e-newsletter and at iabgroup.com.


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IA&B Series Ads . . . . . . . . . . . . . .23, 25, 27, IBC

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

Millers Mutual Group . . . . . . . . . . . . . . . . . . . .11

Preferred Property Program . . . . . . . . . . . . . . . .5

TAPCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Tri-State General Ins Ag . . . . . . . . . . . . . . . . . .23

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.

LOOKING TO BUY!

Agency in Snyder, Union andNorthumberland Counties. All inquiries kept confidential.Call Gary at (570) 524-7670.

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

[ 28 ]

Insuring the wedding season:When love isn’t in the air

Runaway brides and grooms, take heart

Cold feet and empty pockets need not go hand inhand. Many insurers have adopted riders that covertherapy sessions for couples coping with postponed orcancelled nuptials. And Fireman’s Fund recently addedprotection for changes of heart to its wedding andprivate-events policies.

Source: examiner.com

Payouts for break ups

A University of Illinois professor hasdetermined that divorce is aninsurable risk. Following the 2000U.S. Census, Professor Westlandfound enough information todetermine someone’s risk ofdivorce. From there, he sketchedactuarial tables and determinedcompanies could offer divorceinsurance.

North Carolina-based SafeguardGuaranty Corporation jumped atthe idea and has plans in the worksto offer coverage.

Source: insurancejournal.com

----------------------------------------------------------------———————-------The Last & Least column is dedicated to the industry’s oddities —from creative claims and kooky coverages, to (tasteful) jokes andstrange stories. Submit yours to [email protected], subject line: Last & Least. The editor will happily protect sources’ anonymityupon request.

G15276_24-28.qxp:July2010 6/16/10 7:12 AM Page 28

IMPROVING YOURCARRIER RELATIONSHIPS

PARTICIPATE IN THE 2010 COMPANYSATISFACTION INDEX (CSI) TO MAKE ITTHE BEST COMPANY BENCHMARK AVAILABLE.

The 2010 CSI survey provides the foundation for a powerfultool that allows IA&B members to compare carriers andcarrier experiences with other agents and to select newcarriers. The tool, developed by IA&B exclusively formembers, gives you key information about your current and future companies.

Your participation makes this benchmarking tool possible.

Look for participation instructions in IA&B’s AgentHeadlines, and watch for the survey results in October 2010.

Insurance Agents & Brokers. Driving members to distinction.

FOR MORE INFORMATION ON THE IA&B COMPANY SATISFACTION INDEX SURVEY, VISIT IABGROUP.COM OR CALL THE IA&B MEMBER SERVICE CENTER AT (800) 998-9644.

That’s how we deliver distinction.



Let Interstate help you reap the abundance of summer opportunities.

Ripe For the Picking

Your clients with outdoor businesses need extra protection for the unique risks that the summer season brings. Interstate can cover:

• Amusement Parks, Batting Cages, Kiddie Rides, Go-Karts & Bumper Boats• Festivals, Special Events, Parades and Carnivals• Hole-in-One and Fishing Contests and Bowling Tournaments• Sports Camps and Instructors• Horse Clubs, Boarding, Shows and Races• Pet Groomers, Kennels and Trainers• Outdoor Guides and Out�tters

Interstate also o�ers coverages for a variety of other seasonal and non-seasonal businesses with special coverage needs including:

• Flea Markets and Vendors• Driving Ranges• Beauty and Barber Shops• Health and Fitness Clubs• Bars, Taverns and Restaurants• Lawn Care and Landscaping Contractors• Janitorial and Window Cleaning Services• Power Washers• Garbage and Refuse Haulers

In Pennsylvania, Maryland, Delaware, West Virginia & Virginia 2307 Menoher Boulevard • Johnstown, PA 15905814-255-7878 • 1-800-452-0297 • Fax: 814-255-6010In Ohio, Indiana & Kentucky663 Park Meadow Road • Suite E • Westerville, OH 43081614-794-0800 • 1-800-701-5587 • Fax: 614-794-0840interstate-insurance.com

Call Interstate for the best coverages for all your hard-to-place risks.


Primary Agent - July 2010 - PA Edition

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