By: Mallory Cornell, IIAW Vice President

How an agency operates, should never feel like a guessing game for anyone. Too often we see owners assuming workflows exist, staff finding workarounds for cumbersome tasks or inconsistent methods of completing operational processes. Whatever the obstacle, there is a fun and helpful navigation tool to create smooth and efficient workflows.

Workflow Mapping is an exercise that provides a visual representation that can be used to drive consistency, identify areas to add technology, pinpoint inefficiencies and even improve customer service. By providing a top-down view of the agency, decision making is easier than ever due to the clarity provided an ease of creating a targeted approach to operational change.

The exercise of workflow mapping can be as high level or in-depth as you choose. It can be done internally or with an outside consultant. There are a few important points to be mindful of when it comes to successfully mapping your agency workflows:

1. This is NOT a process to create a procedure manual

2. The workflow must have a defined scope (rabbit holes are everywhere!)

3. The end goal should be defined prior to starting the exercise

4. Everyone must be given an opportunity to provide feedback

5. Have fun!

Workflow mapping may seem challenging or time-consuming, but it is a great way to build collaboration, invoke positive change and redefine the work of the agency. An agency’s operations have likely been challenged and will continue to be. For this reason, it is essential to check and adjust and make sure everyone involved in the operations has a voice in the adjustments.

If you would like more information on Workflow Mapping, please feel free to reach out with questions,

mallory@iiaw.com!

Brad Reitzner, M3 Insurance - 

Q. What do you hope to accomplish while on the IIAW Board of Directors?

A. I will be an advocate for the independent agent model and grow the industry with the next generation.

Q. What do you currently see as the biggest challenge and opportunity facing the IA channel currently or in the future?

A. Consolidation in the IA channel along with clients post-COVID looking for advisors and more data-driven solutions is a challenge, but also one of the greatest opportunities.

Q. Any life advice or favorite quote?

A. Work hard, play hard.

Q. A book you recommend people read?

A. “Outliers: A Story of Success” by Malcolm Gladwell

Q. A non-insurance prediction for 2021-2022?

A. People will start traveling internationally again.

-----------------------------------

Matt Frank, Robertson Ryan & Associates - 

Q. Tell us a little about yourself

A. I’m coming up on my 10th year in the industry. Time flies! For the past five years, I have worked as an insurance advisor at Robertson Ryan & Associates. Prior to that, I was a commercial underwriter at Liberty Mutual. When I’m not thinking about insurance, I enjoy spending time with my wife, Susie.

Q. What do you hope to accomplish while on the IIAW Board of Directors?

A. I’m excited about the opportunity to continue to network with my peers along with growing as a professional.   Being a part of the Big I has already been extremely beneficial towards my development.  It really is a great place to meet peers and to learn what’s going on throughout the industry.   

Q. What do you currently see as the biggest challenge and opportunity facing the IA channel currently or in the future?

A. In my opinion, the biggest opportunity for the IA channel involves the implementation of technology and digitalization.  To be specific, how do we evolve as an industry so that we can stay connected with our clients especially future generations.

Q. Any life advice or favorite quote?

A. Never get too high or too low. This is especially important for those in sales.

Q. A book you recommend people read?

A. If you are interested in Milwaukee and its history, “The Making of Milwaukee” by John Gurda is great.

Q. A non-insurance prediction for 2021-2022?

A. Bucks will win another championship - back to back!

Welcome to the IIAW board! We are excited for the year ahead. 

By: Chris Boggs, Executive Director Risk Management and Education, Virtual Big I University 

Within ISO’s Building and Personal Property Coverage Form (CP 00 10), a 180-day limitation applies to three situations:

• Within the Additional Coverage – Debris

   Removal. Simply stated, debris removal

   expenses, up to the eligible limit, are paid only

   if they are reported within 180 days of the direct

   physical loss.

• Within the Additional Coverage – Pollutant

   Clean-up and Removal. Like coverage for debris

   removal, the forms states that is pays for

   eligible expenses only if reported in writing

   to the carrier within 180 days of the date of the

   Covered Loss.

• As part of the requirements of the Optional

   Coverage – Replacement Cost. This use of the

   180 day “limitation” in the ISO form is the

   subject of this article.

ISO Coverage Form Language

To begin this discussion, let’s review the relevant “180-day” wording found within the Replacement Cost provision of ISO’s CP 00 10:

c. You may make a claim for loss or damage covered by this insurance on an actual cash value basis instead of on a replacement cost basis. In the event you elect to have loss or damage settled on an actual cash value basis, you may still make a claim for the additional coverage this Optional Coverage provides if you notify us of your intent to do so within 180 days after the loss or damage.

Key terms and conditions within this language must be reviewed to understand how this provision applies:

• “You…”: The very first word of this provision

    points to WHO gets to make what decision.

   The “you” is the named insured. From the

   beginning it is clear that the named insured is

   making a decision.

• “…actual cash value basis…”: What does the

   “you” or the named insured get to decide?

   The named insured is given the option to make

   a claim on an actual cash value (ACV) basis

   rather than on a replacement cost basis as

   allowed when the insured choses this optional

   coverage.

• “In the event…”: Means, “If.”

•“…you may still…”: The you/named insured

   has the option to change his/her/its mind.

• “…notify us…”: If the you/named insured

   changes his/her/its mind, the insurance carrier

   must be notified.

• “…within 180 days after the loss or

   damage.”: Although the you/named insured

   has a right to change his/her/its mind regarding

   ACV versus Replacement Cost, that right

   expires 180 days after the loss.

What does this mean? Simply, the INSURED (not the insurance carrier) has the option to settle the property loss on an ACV basis rather than a replacement cost basis when this optional coverage is chosen.

However, this provision gives the INSURED (not the insurance carrier) the right to change its mind and seek recovery on a replacement cost basis – provided the insurance carrier is notified of such intention within 180 days of the loss.

All decisions within this provision are those of the INSURED. None of these decisions are given to the insurance carrier.

What This Provision Does NOT Allow

Insurance carriers misapply this provision regularly, and in many unique ways. This provision does NOT allow:

• The insurance carrier to deny replacement cost

   if the damage is not discovered until more than

   180 days after the loss occurred. Note again

   that all the decisions within this provision

   lie with the insured and NOT the insurance

   carrier. If, upon discovery of the damage, the

   named insured makes it known that repair or

   replacement is desired, the insurance carrier

   owes replacement cost. The only caveat to this

   may be the insured initially stating that they

   have no intention to repair or replace and

   changing their mind later. Past the 180 days,

   the insured does not have the ability to flip-flop

   on the ACV vs. Replacement Cost decision. But

   again, if it’s stated up front that replacement

   cost is desired, it doesn’t matter how long after

   the loss the damage is discovered, replacement

   cost is owed.

• The insurance carrier to deny replacement

   cost because repairs or replacement took

   longer than 180 days. Nowhere in this provision

   is there a specified time limit for repairs. The

   only requirements for payment on a

   replacement cost basis are: 1) Adequate

   coverage amounts; 2) The Replacement Cost

   optional coverage has been chosen; and 3)

   Actual repair or replacement of the damaged

   property. While the policy does state that repair

   or replacement must be completed “as soon as

   reasonably possible,” the policy does not place

   a time limit on what this phrase means.    

There are times when a damage may not be discovered for more than 180 days (i.e., hail damage). Nothing in this provision allows the carrier to avoid paying replacement cost. Time to repair or rebuild often takes more than 180 days, especially for a major loss. If the carrier was able to deny replacement cost simply because the repair/replacement took more than 180 days, replacement cost coverage in the commercial property policy would be almost illusory (sometimes it takes longer than 180 days just to dig the first hole for the replacement building.

Proper Application of the 180-Day “Limitation” for Replacement Cost

First, note who gets to make what decision. The named insured (not the insurance carrier) gets to decide whether or not he/she/it wants coverage on an ACV or replacement cost basis. Second, IF the “you” initially chooses ACV rather than replacement cost, that same “you” has the ability to change its mind and chose replacement cost – if such choice is made within 180 days of the loss. Lastly, if the named insured chooses replacement cost within the specified time period, there are adequate coverage limits, and repairs or replacement actually occurs, the insurance carrier owes replacement cost.

Nothing within the 180-day “limitation” allows the insurance carrier to make any decisions or take any action; it only allows the insurance carrier to respond to decisions made by the insured.

All this provision does is allow the insured to change its mind!

By: Chris Boggs, Executive Director Risk Management and Education, Big I Virtual University

“Can a certificate of insurance limit the breadth of protection provided by the insurance policy and endorsements?”

This has to be the weirdest certificate of insurance (COI) question I have ever been asked. Generally, the question goes the other way, asking if language on a COI can broaden coverage.

Technically, the answer is the same regardless of whether the COI language “broadens” or “narrows” coverage – no, the COI does not alter coverage. However, and there is always a “however,” the practical answer can be “yes, the COI does alter the breadth of coverage” IF the holder is harmed due to detrimental reliance on the information contained in the COI.

Somehow, it seems unreasonable to assert that the holder can be harmed by detrimental reliance if wording in the COI narrows the breath of protection. Because detrimental reliance does not seem to be an issue, the answer is back to no, the COI does not affect the breadth of coverage provided by the policy. (Besides, the concept of “detrimental reliance” is for the benefit of the holder.)

Even the disclaimer language contained within the COI supports the idea that coverage is not altered. The COI (ACORD 25) specifically states:

“THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.”

According to the COI language within the form, coverage is not amended in any way. Seems relatively clear that, short of detrimental reliance, nothing in the COI alters the reality of the policy language.

Back to the initial question, and the reason for this review, “Can a certificate of insurance limit the breadth of protection provided by the insurance policy?” Obviously, the COI cannot narrow the clear policy language any more than it can expand it.

Why, then, is this a question to consider? When the insurance carrier tries to get out of paying a claim because of information contained on the COI.

How absurdly ironic. It is understandable for a carrier to attempt to avoid paying a claim because the COI expands coverage. But it seems incredibly ridiculous (maybe not quite to the level of bad faith, but close) for the insurance carrier to then use the COI to claim that the policy doesn’t respond because the COI narrows the breadth of coverage.

The carrier cannot have it both ways. Either the COI affects coverage or it does not!

Let’s use the Automatic Additional Insured endorsements as an example. For this example, the narrower of the two available ongoing operations automatic additional insured endorsements is used, ISO’s CG 20 33 - Additional Insured-Owners, Lessees or Contractors-Automatic Status When Required in a Written Construction Agreement With You.

This is considered the narrower of the CG 20 33 and CG 20 38 because it requires “privity of contract,” meaning that to be an additional insured, the party must be the contracting party. The CG 20 38 automatically extends AI status to any party requiring such status in the contract, not just the contracting party. (Irrelevant to this article, just for information.)

ISO’s CG 20 33 extends additional insured status to, “any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.”

“Any” is a relatively broad term – it means any. The wording extends AI status to “any person or organization” the insured is performing operations when a written contract requires AI status be extended to that contracting party. There is very little doubt of the intent. If the contract requires AI status be extended to the party with privity of contract, AI status is extended.

How could the COI possibly be used to narrow this grant of protection? Many agents are in the habit of listing the relevant project in the Description of Operations; or possibly such listing is required by the contract, but does listing the wrong project in the COI negate the grant of AI status found in the endorsement?

Assume the insured works on many projects for the upper tier contractor, each under separate contracts, and all contracts require AI status. Presently the insured is working three projects:

• Johnson Project at 123 Main Street;

• Smith Project at 321 King Street;

• Jones Project at 456 Meeting Street.

The agent issues a COI for each of the project but forgets to change the project name within the COI’s Description of Operations. Does the listing of the Johnson Project in the COI for the Smith Project change the grant of AI status?

Don’t laugh! This is a real possibility, especially if the loss is large enough.

Let’s answer three questions:

• What does the endorsement require for a party to be

   an AI? A written contract. As was already stated, each

   project was under separate contract. But even if all

   projects were on the same contract, there is still a

   written contract in place requiring AI status.

• Does the endorsement reference any documents

   OTHER THAN the written contract? Well, no. The

   only document referenced in the endorsement is the

   contract. The COI isn’t contemplated in the application

   of the endorsement.

• Does the COI alter coverage? Seems this has already

   been addressed. Technically no, unless the HOLDER is

   harmed by detrimental reliance.

This leads to the ultimate question, does having the wrong project and/or address affect the extension of AI protection to the upper tier contractor? No!

Certainly no insurance carrier would attempt to use a COI to limit coverage when they are endlessly stating that a COI does NOT expand coverage. This would be the height of irony and an ethical low point.

As we mentioned in last week's Big I Buzz, October is Breast Cancer Awareness Month. Throughout the month, it's important to be showing support by wearing pink throughout the month, donating to cancer research and reminding yourself of the importance of performing self-exams throughout the entire year!

Raising breast cancer awareness is especially important for all of us at the IIAW. Recently, Trisha Ours, our Director of Insurance Services was diagnosed with breast cancer. A message from Trisha: "My cancer diagnosis is still new (end of September), but so far it appears to be stage 1A triple positive invasive ductal carcinoma. However, I've been told that I can be re-staged multiple times during my battle with breast cancer and at any time can have a recurrence of metastatic disease. This is why it is so important to do self-exams and schedule your mammogram screenings. If I had not been doing self checks or just brushed it off instead of contacting my doctor right away, I could be looking at a much more dire situation."

As the IIAW team raises awareness for breast cancer, we have started a fundraiser for metastatic breast cancer research in Trisha's honor. METAvivor is an organization dedicated to the specific fight of women and men living with stage 4 metastatic breast cancer. If you would like to donate, please head to our team page: donate.metavivor.org/team/383943. 100% of every donation to METAvivor goes into their research grant. 

Consumers are Splurging on Diamonds. Signet Jewelers Just Hiked Its Full-Year Outlook - Again

For the second time in weeks, Signet Jewelers have raised their fiscal 2022 forecast, as consumer demand increases before the holidays. According to the company, they're not experience any supply chain disruptions unlike many other stores in the retail industry. As consumer demand for diamonds are expected to grow throughout the holiday season, this could be a great time to push insuring expensive jewelry and gifts. 

Feel free to right-click and save this image to share on your social media feeds to encourage followers on Facebook to contact you about insuring their expensive jewelry and gifts throughout the holiday season. If you don't follow our Facebook page already, head to facebook.com/iiaofwi to see our daily posts that you can share onto your own page. 

Insurers in Illinois Now Required to Report Dog Bite Claims

Starting January 1, 2022, home and renters insurance companies must provide certain information regarding dog bites. The new Illinois insurance code asks all insurance companies to document and report information including, "

1. The breed of the dog and whether the identification was made visually, or by the owner, adjuster or insured; 

2. Where the owner of the dog obtained the dog from, such as pet store, breeder, animal shelter or rescue organization, a friend or acquaintance, or if they found the dog or it was a stray; 

3. The sex of the dog and whether or not it was neutered or spayed; 

4. Whether or not the person injured by the dog was observed teasing, tormenting, battering, assaulting, injuring or otherwise provoking the dog; 

5. The type of injury that was sustained by the victim, such as fall or bite; 

6. Whether the injury occurred on the insured's property or at another location, and

7. Whether the dog had received any sort of obedience training, or there have been previous claims or past complaints against the dog." This information must be collected for a two-year period starting January 1, 2022. Read more here: https://www.propertycasualty360.com/2021/10/11/illinois-to-require-insurers-to-report-all-dog-bites-414-211070/

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list. We hope that everyone has a great rest of their week!