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

For almost 400 years commercial property underwriters have used the same general information when evaluating a property risk:

• Construction;

• Occupancy;

• Protection; and

• Exposures.

Collectively, these are known as the “COPE” data. Although the VU has written and taught sessions on all four parts of COPE, this article provides a general overview if just one part – Protection.

Local fire departments, sprinkler systems, fire extinguishers, alarm systems, and fire doors/fire walls are the five main property protection features potentially available to property owners. Each of the five features is classified as either:

• Public or private; and

• Active or passive.

Public Protection

Fire departments are the only protection feature considered as “public” protection. Fire departments are funded by local governments and protect somewhat large areas, responding to fires and other public emergencies.

Each fire department is inspected and assigned a grade – its public protection class (PPC). Most fire departments are inspected and graded by Insurance Services Office (ISO), but some are inspected and graded by the state Departments of Insurance. Upon inspection, each department is assigned a number grade ranging between 1 and 10. The lower the number, the more effective ISO (or other jurisdictional authority) considers the department.

Public protection grades are based on factors such as fire department response times, water supply, personnel training, available equipment, communications, and mix of paid versus volunteer personnel. Countrywide, the most common PPC grade is 5. Not surprisingly, the least common, and most coveted, class is 1. (Note: Public Protection Class 10 is assigned to locations more than five miles from the closest responding fire department.)

Occasionally fire departments are assigned two PPCs. These are referred to as split classification departments. The ultimately assigned classification is a function of the closest fire hydrant or other creditable water supply. If the closest hydrant or other creditable water source is within 1,000 feet, the lower (better) PPC is used; if over 1,000 feet, the higher class is applied.

Historically, split classes were listed as 6/9 or 5/9 (examples only). However, in 2013, ISO changed how split classes are assigned. Now an “X” or “Y” replaces the historical “9” or “8B” assignments. For example, an historical 6/9 split classification is now shown as 6/6X; an historical 5/8B is now a 5/5Y.

Beyond these split class changes, ISO also created a new PPC 10 option – 10W. A “10W” is assigned to properties located more than five miles but less than seven miles from the closest responding fire department AND less than 1,000 feet from a creditable water source. According to ISO, properties meeting these parameters are a lower fire risk than is indicated by the traditional PPC 10. If these conditions aren’t met, the property is assigned the traditional 10.

North Carolina is the only state that has not adopted either classification change.

Private Protection

Alarm systems, sprinkler systems, fire extinguishers, and fire doors/fire walls are limited to one location or one property, thus each is considered private protection. No party other than the building owner benefits from these protection features.

However, simply having any or all of these protection features is not enough. Does the protective feature adequately protect the location or provide any benefit?

Alarm Systems.Fire, burglar, carbon monoxide, medical emergency, and other alarm systems are readily available to protect property and persons. Whether an alarm system is adequate is a function of several factors:

• Who receives the alarm? Does it sound locally or is

   it monitored by a central station? Is the central

   station listed by Underwriters Laboratory (UL)?

• What type of external communication is used? Is a

   tape dialer still in use or is it digital?

• What protection exists if the power is off?

• Are there any unprotected areas?

• Are there any special features?

• Is the system installed properly?

Sprinkler Systems. Having a sprinkler system is beneficial, but simply “having” a sprinkler system isn’t always enough. Can the system meet the demands of the current operation?

Over time, buildings may be repurposed. What was originally built and used as an office with minor assembly may now be a cabinet shop. Unless the sprinkler system was updated to account for this increased fire load, it may not be effective; it certainly won’t be as effective as a system designed for a woodworking operation.

Sprinkler systems must be inspected thoroughly to assure the system can do what it was designed to do – controlling and, maybe, extinguishing a fire. Proper evaluation of a sprinkler system requires review of:

• The type of system (wet, dry, deluge, pre-action,

   foam, chemical, etc.);

• The system’s condition (in good working order or

   with deficiencies);

• The water supply (adequate to meet the needs of

   the occupancy);

• The system’s ability to meet the current fire load;

• Any non-sprinklered areas:

• Clearance below the heads (any materials too close

   to the sprinkler heads retarding its flow); and

• Any high-rack storage (are there in-rack sprinklers).

Fire Extinguishers: Like sprinkler systems, fire extinguishers are great to have; and like sprinklers, just having a fire extinguisher is not enough. To gain any benefit from a fire extinguisher requires:

• Using the correct type. Different types of fire

   extinguishers are needed for different exposures.

   There are five primary classes of fire extinguishers

   based on the types of fire on which they are

   intended to be used:

• Class A: Used to extinguish anything

  producing ash (thus an “A” classification).

  This is for materials such as wood, paper,

  furniture, etc.);

• Class B: Used to extinguish anything that

  “boils” (thus “B”). Class B extinguishers are

  used to fight flammable and combustible

  liquid fires;

• Class C: Used to extinguish anything that has

  a “charge” (thus “C”). Class C extinguishers

  are used to battle electrical fires;

(Note: A, B, and C are often combined into one extinguisher.)

• Class D: Used to extinguish combustible

  metal fires (no good way to get to “D”). 

  Metals such as magnesium, titanium,

  sodium, and potassium burn when not in

  solid form (such as a pile of shavings or other

  loose form). No other class of extinguisher

  can be used on these fires. Class A, B,

  and C extinguishers can spread these fires or

  react negatively; and

• Class K: Used to extinguish kitchen fires (thus

  “K”). Class K extinguishers can be handheld

  or part of what is often referred to as “Ansul

  systems.” Class K extinguishers and systems

  are used to extinguish grease-laden fires.

• Having the correct size. An undersized extinguisher

   puts the user in danger more than it helps

   extinguish a fire.

• Training employees on how to properly use the fire

   extinguishers.

• Placing fire extinguishers in the natural path of exit.

   Users and potential users should be able to access

   the extinguishers as they are leaving the area; they

   should not have to go into the room (fire) to find an

   extinguisher.

• Properly locating fire extinguishers. Extinguishers

   should be hung at eyelevel with no more than 75

   feet of travel distance from any point.

Fire Walls and Fire Doors: The size of a building has a direct effect on the difference between the structure’s Maximum Possible Loss (MPL) and Probable Maximum Loss (PML). One method to lower the PML is to divide the building into smaller sections (compartmentalization) by constructing fire walls and using fire doors.

Compartmentalizing a building using fire walls and fire doors reduces the possibility – or probability – of widespread fire damage, ultimately lowering the PML.

Fire walls and fire doors are effective only when minimum standards are met. Lacking in any of these standards makes such walls and doors nothing more than fire stops or merely an obstacle that slows the fire. For a wall to qualify as a “fire wall,” it must:

• Be one continuous masonry wall;

• Be a minimum of 6 or 8 inches thick (the difference

   in thickness is a function of the materials used);

• Come into direct contact with fire resistive masonry

   or noncombustible walls and roof; and fully pierce

   “slow-burning” or combustible walls and roof;

• Have any openings protected by self-closing, 3-hour

   rated fire doors (aka Class “A” doors). If such a door

   is blocked open or unable to fully close, the wall is

   no longer considered a fire wall; and

• Protect any openings through which HVAC ducts

   pass with a 1 ½ hour rated damper.

Active vs. Passive Protection

Does the protection feature act or react in the absence of humans or is human intervention or action required? This is the difference between “Active” and “Passive” protection.

Active protection features don’t require human presence to do what they are designed to do. However, humans must eventually react to an active protection feature to successfully mitigate the situation.

Sprinkler systems and alarm systems are the two active (self-actuating) protection features.

Even when no one is around, a sprinkler system “reacts” (provided it is in good working condition). Likewise, an alarm system sounds or sends a notice when a monitored situation occurs. Ultimately humans must do something, but they are not required to activate either of these systems.

Passive protection features are the local fire departments, fire extinguishers, and fire walls/fire doors. They are just “there.”

• Fire departments stand ready to respond to

   emergencies, but since the fire department is away

   from the building and human action is required (

   the firefighters have to get suited up, get on the

   trucks, and drive to the scene), a fire department is

   considered passive protection.

• Fire extinguishers are fully passive. An extinguisher

   is of no benefit until a human takes it, pulls the

   safety pin, and applies the extinguishing chemicals

   onto the fire.

• Fire walls and fire doors are truly just there – the

   ultimate in passive protection. Fire walls and fire

   doors don’t act in any way; they exist solely to get in

   the way of the fire.

Property Protection

Effective property protection requires use of the appropriate protection options. Which protection features are necessary is a function of the building and the operations. Although every building is protected by a responding fire department, not every building requires a sprinkler system. Likewise, every building should be supplied with the proper fire extinguishers, but a particular building may not require compartmentalization by use of a fire wall/fire door combination.

Regardless the protection features in use, every worker on the premises must know and understand the need for and the use of the protection features present.

By: WAHVE Work at Home Vintage Experts

Leaders often use the phrase, “This [insert project name] isn’t a sprint. It’s a marathon.” When applied to business strategy, the phrase means that change takes time. Be patient. Don’t rush. Prepare. Train. At the finish line, you’ll break through the tape victorious. While the phrase is intended to remind everyone that big changes don’t happen overnight, there’s a flaw in its wisdom for today’s leaders and employees – because it implies that there is a finish line.

These days, it might be better to take a note from Nike’s 1977 print ad campaign that said, “There is No Finish Line.” Think about that for a minute. Do you approach strategic imperatives as if there’s a finish line? Or do you acknowledge that in an age of continuous disruption, there can be no finish line? Put another way, are you planning your future as if there’s going to be a return to status quo, or are you building a culture of adaptability?

When leaders plan as if there’s a finish line, they tend to focus on tactics and rigid rules that will get everyone to a final destination. The problem is, by the time they reach the final destination, everything has shifted again, and the original solution doesn’t address the current problem.

So, why do leaders often default to this type of thinking? For one thing, there’s pressure for leaders to have “the right answer” or the “final solution”. There’s comfort in driving toward a finish line.  It’s the model we know. Surely, we all want to understand where we’re headed and feel a sense of accomplishment when we reach our destination. This isn’t to say that tactics and goals aren’t important. They are. But they are point-in-time solutions to situations that are temporary.

In a recent McKinsey & Co. study, researchers refer to this type of short-term thinking as “the finish-line effect”. When leaders fail to build a culture of adaptability, it can increase attrition and dissatisfaction.

Employees want to work for companies that can stay ahead of the curve rather than be drowned by the next rising tide.

Many leaders today are grappling with how to address the changing work environment. A finish line approach is to launch a policy that defines specific days that employee must be in the physical office. An adaptable approach means meeting your workforce where they are today and leaving room for the policy to quickly adjust if you need to bring employees into the office daily or if you need to enable them to all work remotely again. You could even decentralize decision making and let teams decide how to best to accomplish their jobs as projects, people, and tasks change over time.

Making adaptability part of your overall strategic mindset requires change and practice. If you want to build an adaptive culture but you (or your team) are resistant to change, it won’t work.

What does an adaptable workplace look like?

1. They accept that uncertainty is here to stay.

2. They hire diverse team members.

3. They hire leaders who are adaptable.

4. They present several possible paths to a solution.

5. They are open to experimentation, interpretation, and

    failure.

6. They are not rule bound. There’s a navigational north

    star, but it doesn’t define the paths you take to reach

    and surpass it.

7. They think beyond near-term tactics to longer-term

     goals.

8. They encourage constant learning.

Stop thinking about the sprint. Stop thinking about the marathon and finish line. Build a culture of adaptability. To quote another famous Nike ad campaign, “Just Do It.”

Happy Wednesday! In this week's Big I Buzz we're discussing a new Trusted Choice campaign, what to expect when traveling this Thanksgiving and US consumer inflation. 

Choose Local Trusted Choice Campaign

As you know, independent insurance agents not only serve their community and local businesses, but are local, small businesses themselves. Encourage your community to remember their local Trusted Choice Independent Insurance Agents when shopping local. Agents are encouraged to use this campaign year-round. You can visit the Trusted Choice website to request customized print ads and social media posts! Currently, agents can access ads and graphics and request a window cling on the Trusted Choice website here. 

What to Expect When Traveling This Thanksgiving

A new report from AAA finds that 2021 Thanksgiving travel is expected to return to pre-pandemic levels despite high gas prices. More than 53.4 million people are expected to travel, 48.3 million of those traveling by automobile. However, if you're one of the 4.2 million Americans expected to take flight for the holiday, these are the Thanksgiving foods you can bring through TSA. 

According to Next Vacay, most food can be carried through a TSA checkpoint. These items are safe to bring in your carry-on to eat mid-flight or when you get where you're going: 

• baked goods

• meats

• stuffing

• casseroles

• mac & cheese

• fresh veggies & fruit

• candy

• spices

These foods will need to be checked and unpacked later upon arrival: 

• cranberry sauce

• gravy

• alcohol

• canned fruit or veggies

• preserves, jams and jellies

• maple syrup.

Additionally, you'll have to leave the turkey carving knives behind or other sharp tools, as those won't clear security. Instead, make room in your checked luggage for these serving items and your favorite gravy.Read the AAA travel predictions here. 

America's Prices Are Surging More Than They Have in 30 Years

If you've been to the grocery store lately, you've probably noticed higher prices on everything from fresh herbs to meats. The Bureau of Labor Statistics reported that there is no end in sight for these higher prices, as the US consumer price inflation surged even higher again in October. According to WKOW, "Over the past 12 months, prices climbed 6.2% -- the biggest increase since November 1990. The overall price index rose 0.9% in October alone, adjusted for seasonal swings, significantly more than the 0.6% economists had predicted and overshadowing the somewhat more tepid 0.4% increase from September. Read more here. 

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!

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!

By: Misha Lee, IIAW Lobbyist

Former Lieutenant Governor Rebecca Kleefisch officially launched her anticipated gubernatorial campaign setting in motion a high stake, competitive race for Wisconsin Governor next year. Kleefisch, 46, is the first known Republican candidate to join the race in a challenge to first term incumbent Democratic Governor Tony Evers, who announced that he’s running for re-election. Kleefisch served as Lieutenant Governor under former Governor Scott Walker from 2011 to 2019. The only other announced GOP candidate so far is businessman Jonathan Wichmann, a relatively unknown name in the race. Other names mentioned as possible Republican primary contenders are State Senator Chris Kapenga of Delafield, State Representative John Macco of Green Bay and 2018 U.S. Senate candidate Kevin Nicholson. But Kleefisch is clearly the heavy favorite among Republicans where she has a strong statewide name ID and has been traveling the state for the past year talking about her policy priorities.

The 2022 midterm elections are traditionally a challenge for the political party in the White House and Wisconsin’s race for Governor will be one to watch closely considering those headwinds will be strong.

The partisan primary election is on Tuesday, August 9, 2022 and the general election is on Tuesday, November 8, 2022.

Gov. Evers Signs Bill Freezing UI Tax Rates Through 2023

As employers continue to deal with challenges brought about by the COVID-19 pandemic, the Wisconsin Republican-controlled state legislature and Democratic governor have found some common ground this legislative session to help try and ease the burden on businesses. Governor Tony Evers signed legislation this past summer that prevents an increase in Unemployment Insurance (UI) contribution rates on employers through 2023.

This is a positive development for businesses all throughout Wisconsin.

Assembly Bill 406, now known as 2021 Wisconsin Act 59, passed both houses of the state legislature unanimously with no opposition. The newly enacted legislation:

• Prevents the increase of unemployment insurance

   tax rates on employers by ensuring the state remains

   in Schedule D for tax years 2022 and 2023; and

• Requires $60 million of General Purpose Revenues

   (GPR) to be transferred into the UI trust fund in each

   fiscal year of the 2021-23 biennium to offset any lost

   revenue

By way of a little background, under state law most private employers are required to make regular payments to the Unemployment Insurance (UI) program at a rate determined by state statute. State law requires two types of payments - contribution payments and solvency payments. Both types of payments are tied to one of four schedules (A-D) with Schedule A containing the highest rates for employers to pay and Schedule D containing the lowest rates. The balance of the Unemployment Reserve Fund on June 30th of each year determines which schedule will be in effect for the next calendar year. State law specifies that Schedule D is in effect for any calendar year whenever, as of the preceding June 30th, the fund has a cash balance of at least $1,200,000,000. Schedule D is in effect for calendar year 2021.

See new employer Schedule D Unemployment Insurance tax rates for 2021 at

https://bit.ly/Oct21GovAffairs.