In the final days of its 2019-20 term, the Supreme Court issued a decision with potentially vast implications for religious organizations.  In Our Lady of Guadalupe School v. Morrisey-Berru, the Court ruled that parochial school teachers do not, for the most part, enjoy protections under federal employment laws.  This decision, and the potential for the Court to expand on it in the years to come, could have a major impact on insured claims against religious institution employers.

The Our Lady of Guadalupe School Case and Decision

The Our Lady case is actually a combination of two employment discrimination cases brought by Catholic school teachers in the Los Angeles area.  In both cases, the teachers argued the schools terminated them for discriminatory reasons.  The first plaintiff, Agnes Morrisey-Berru, claimed her former employer fired her based on her age.  The second plaintiff, Kristen Biel, argued her former school terminated her because she had breast cancer.

Before delving into the Court’s opinion in Our Lady, however, it is necessary to discuss a bit of background.  In 2012, the Supreme Court considered a similar case in which a terminated parochial school teacher sued her former employer for discrimination under the Americans with Disabilities Act.  In that case, the Court recognized a “ministerial exception” to federal employment laws rooted in the First Amendment’s protection of the free exercise of religion.   Specifically, the Court dismissed the plaintiff’s suit, holding that the ministerial exception precluded her claim given that she had received extensive religious training, was considered a minister of her church, and her firing fell into a category of decisions religious institutions make that are essential to their central mission.

Despite important differences between the two cases, the Court reached the same decision in Our Lady as it did in 2012.  In the 2012 case, the Court ruled the ministerial exception barred the teacher’s ADA claims based on evidence that the fired teacher had extensive religious training and was considered by her church to be a “minister.”  The same could not be said for the Our Lady plaintiffs, as the two teacher plaintiffs in the case did not have any specific religious education credentials, and one of them testified that she was not even a practicing Catholic.  However, according to the Court’s majority opinion, whether a teacher has religious training is

inconsequential to the ministerial exception analysis.  What mattered in Our Lady was that the teachers taught religious curriculum, prayed with their students, and accompanied them to mass.  Ultimately, in dismissing the teachers’ claims, the Court held that the schools had initially made the determination that the teachers knew enough about Catholicism to teach the subject, and “judges have no

warrant to second-guess that judgment.”

Now What?

Despite the fact that both the Our Lady decision and the 2012 case involved teachers, the rulings could have much broader implications.  In her dissent, Justice Sotomayor criticized the majority, arguing it had destroyed the existing standard of review for the ministerial exception and replaced it with a single consideration: “whether a church thinks its employees play an important religious role.”  Not only could this “strip[] thousands of schoolteachers of their legal protection,” according to Sotomayor, it could also extend to “countless coaches, camp counselors, nurses, social-service workers, in-house lawyers, media-relations personnel, and many others who work for religious institutions.”

If you or your agency have religious institution clients, this decision, and its progeny, could have a considerable impact on the scope of potential employment-related claims and litigation.  If lower courts consistently (or even more 

broadly) apply the holding from Our Lady, it could greatly reduce the amount (or at least the success) of employment discrimination claims against religious institutions. Moreover, if Justice Sotomayor’s dissent proves prescient, the opinion could serve as the backbone for future decisions dismissing discrimination claims brought by any employee of a religious organization, or even claims brought by parishioners involved in community outreach or charity work.

Conclusion

In Our Lady of Guadalupe School v. Morrisey-Berru, the Supreme Court expanded the ministerial exception to employment discrimination claims brought against religious institutions.  While the case involved teachers at parochial schools, the decision may impact claims brought by any employees of religious organizations.  Keep an eye on this column and updates from the IIAW for related developments.

In this week's Big I Buzz we are covering Allstate's push into the independent space, pro sports players associations stance on the Senate Republican stimulus proposal and we look into the states ranked by uninsured rates. 

Allstate's $4 billion push into the independent space

Allstate has announced that it will acquire National General Holdings for $4 billion in their attempt to step into the independent agent channel. According to Insurance Business America, "There is talk that Allstate is in the middle of a major restructuring that would see thousands of staff being laid off. News of a major acquisition deal despite Allstate's alleged internal issues raises more questions than answers, and some may wonder why the insurer went through with this deal."

Pro sports players associations come out against key McConnell stimulus priority

The executive directors of the NFL, NBA, NHL Major League Baseball and Major League Soccer players associations signed onto a letter raising concerns about the liability protections included in the Senate Republican proposal introduced last week. Read more about the proposals from both the Republican and Democratic parties here. The players associations were opposing the structure of the proposal because the legislation does not explicitly provide liability protections for those who engage in willful misconduct or grossly negligent behavior, providing a tighter scope on the bill's safe harbor than the players association asserts, according to CNN. 

States ranked by uninsured rates

Becker's Hospital Review has ranked the states by their uninsured rates. This report compared uninsured rates in 2018 to rates in May 2020 with information from the U.S. Bureau of Labor Statistics and the Urban Institute. Texas ranked at the top with the highest uninsured rate in the U.S - with 29 percent of adults uninsured as of May, according to a report from Families USA. The total number of uninsured in the U.S. climbed to 21 percent due in part to layoffs tied to the COVID-19 pandemic in recent months, according to Becker's Hospital Review. Wisconsin's uninsured rate sits at 10 percent at the time of this report. 

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 mailing list. We hope that everyone has a great rest of their week!

2020 has become the year of the remote worker, courtesy of the coronavirus pandemic. Is your business one of the many that has transitioned to remote operations? Have you considered how that change affects your insurance liabilities as a business owner?

Your Trusted Choice Independent Insurance Agent® can help you reassess your risk picture. Managing a remote workforce may be new to you, but independent agents have rich expertise in helping business owners manage risk — whether employees work from home or on-site. And because they represent multiple insurance companies, Trusted Choice agents can offer you and your business customized coverage based on your unique and changing needs.

In addition, your Trusted Choice agent can offer you resources and advice for developing your company’s remote work program. It should address, at a minimum:

1. Safety guidelines for a home office setup.

2. Designated work, break, and lunch times.

3. Safety training.

4. Physical inspections of remote workers’ home offices.

5. The workers’ compensation rules for your state as they apply to remote workers.

Here are a few insurance questions your Trusted Choice agent can help you answer:

Does my commercial general liability policy cover remote employees?

As part of your business insurance package, general liability protects your business against financial loss resulting from bodily injury, advertising injury, and property damage caused by your business or employees. Your Trusted Choice agent can review your policy to be sure that you are still adequately covered while employing remote workers.

If your remote employee must meet business clients from home, it will be your commercial general liability policy that must cover any injury, not the employee’s homeowners insurance. Your agent may suggest additional coverages such as management liability insurance to protect you and your workers from this and other risks not covered by your commercial general liability policy.

Business property insurance protects the physical location of your business and any tools, equipment and inventory. Your business property policy may exclude or limit the coverage for property that is not located at your business premises. Your agent can help you determine if you need additional coverage for property used off-premises by remote workers.

An employee’s own homeowners policy usually will not cover the loss of business-owned equipment that is damaged or stolen in their home.

Are my remote workers covered by the workers’ compensation insurance my company purchases?

  It is incumbent on you as an employer to ensure a safe working environment for your employees — whether they work at your business location or from their homes. In general, your workers’ compensation insurance covers all of your workers for illness or injury arising out of or in the course of employment — no matter where they physically work.

However, ensuring a safe working environment for remote workers increases your responsibilities as an employer.

In addition, it is more difficult for a remote worker to demonstrate that an injury or illness “arises out of” or occurs “in the course of” employment — your telecommuting policies and procedures will be of critical importance. Will my cyber liability insurance cover remote employees? The answer to that question is not simple because cyber policies vary greatly and may contain exclusions that would affect remote workers. And a remote worker using a public or a poorly secured home network could put your entire business at risk and expose your customers’ private information. Your Trusted Choice agent can help you be sure you have appropriate cyber liability coverage. In addition, you must ensure that every device an employee uses is protected from cyber breaches. First, require that employees use only your business-owned devices for work; second, set every employee up with a secure connection from their home office to your business network. You may have to engage the help of an IT specialist, but the investment pales beside the potential costs of a cyberattack.

Let Trusted Choice help you keep your business and employees safe … anywhere they work.

For more help with your telecommuters, consult these articles:

Inspiring Productivity and Connection with Remote Workers

Ways to Keep Remote Workers Connected and Engaged 

By: Mallory Cornell | IIAW Vice President and Director of Risk Management

This article was originally published in our February 2020 Wisconsin Independent Agent magazine. Click here to read our magazine, Wisconsin Independent Agent. 

recently read an article on PropertyCasualty360.com titled “Why Insurance Agents Must Monitor Online Consumer Reviews”. The last line of the article reads, “Your customers are online. Are you?” 

I appreciate this statement and have already used it during several conversations with agents. For me it resonates on a few different levels.

The relationship is not dead. Your customers, or prospective customers, still want to work with an insurance agent they can build a relationship with.The idea is that relationships just look a little different than they have in the past. Its much easier for a customer or prospect to “get to know you” because they can find more information about the person or the agency by going online. But what if they can’t get to know you by going online? What if they can’t find anything about you because you’ve decided its easier to just avoid being online? The article in PropertyCasulty360.com stated that “more than a quarter of millennials say they learned about an agent through digital engagement (online search, reviews or social media).” This demographic should be a key target for an agency looking to grow and be sustainable. To not have an online presence is immediately diminishing opportunities with this key customer group.

2. Agency presence versus individual presence. As an online admirer of independent insurance agents (does that sound creepy?), I appreciate the opportunity to see what agencies are doing in their community or how employees are being celebrated around the office. When an agency does not have a strong online presence, its usually because they don’t recognize the importance or they do not have an internal staff member interested in managing the page (which is an key piece). That’s fair, but what about individual pages? Should a commercial lines insurance professional always have a LinkedIn page? I would argue yes because business professionals want to see and know who they are working with. It can also highlight your experience and education in the industry. Individual Facebook pages are not the same as individual LinkedIn pages. User beware, if you are going to have a public Facebook page or be “friends” with customers you are increasing your exposure to knowing more than you would like to about your customer! And don’t forget, they can learn more about you as well.  Facebook (as well as Twitter and Instagram) is a much more social platform while LinkedIn is a professional social media site. There are risks associated with each and having a clear goal for using social media as an agency or as a professional is key. An agency Social Media Policy is another essential piece to this puzzle. (Need a template? Visit www.iiaw.com/AgencySolutions and find one under “Operational Resources” or reach out to any IIAW staff member)

3. Efficiently Grow Your Network. I applaud the industry professionals who take the time to attend networking events, local community groups and meetings and who spend time face to face with customers and prospects. Your time is more precious than ever, and these commitments take you away from your desk, the office and even your family on a regular basis. This is where social media and digital marketing are different. You can connect, engage and stand out online faster and easier than in a crowded room. It may take some practice, but the tools and resources exist to help you get started. 

What’s next?

If you are looking to become more active on social media and engage in the digital world, develop a plan and educate yourself. What is the commitment your willing to make and what will successful execution look like? Know the risks but also appreciate the reward.

By: Chris Boggs | Big "I" Virtual University Executive Director

“Who owns the building?” Asking this rather basic, four-word question can save your insured, you, and your errors and omissions carrier a major heartache and undue costs following a building damage claim.

Never assume a small, closely-held corporation is as simple as it appears on the surface. Exposure and legal realities often exist, the importance of which are not fully understood by the “business owner.”

Consider the following example, George Bailey owns Widgets, Inc., a manufacturer of widgets (who would have guessed?). The manufacturing operation is conducted in a building that, according to Mr. Bailey, is “owned by the insured.” However, Mr. Bailey owns the building individually.

Understand, Mr. Bailey is not attempting to mislead the insurance carrier or misrepresent the facts. In his mind, there is no distinction between the operations of Widgets, Inc. and the ownership of the building. To Mr. Bailey, it’s all the same because he owns both. Such belief is more common than many agents realize.

But within the realities of insurance and law, two separate “persons” are involved in this all-too-common situation. Potential insurance coverage gaps arise from the existence and participation of two separate

“persons.” Each natural person and legal person must be accounted for and managed separately within the insurance policy. (Natural persons are flesh and blood individuals. Legal persons are created by the filing of specific legal documents such as articles of incorporation or articles of organization.)

Natural persons and legal persons have the same rights; the right to sue, to be sued, to own property, etc. Therefore, each “person” presents his/her/its individual risk exposure that must be analyzed and specifically insured.

Unless each person’s exposure is properly addressed, the property policy may not respond to a property

claim for one of two reasons:

1. Lack of insurable interest; or

2. Lack of insurance protection.

Property insurance policies do NOT respond to a claim if insurable interest does not exist at the time of the loss. Likewise, if the party with insurable interest is not an insured, the policy does NOT pay.

Insurable interest, in a property insurance context, exists when a “person” suffers direct financial loss as a result of damage to or destruction of the specified property. If the “person” with insurable interest is not covered by a property policy, the loss must be paid out of that “person’s” resources. Insurable interest in real and personal property is created in one of three ways:

1. Ownership;

2. Legal liability: Responsible for someone else’s 

    property – like a dry cleaner is responsible for its 

   customer’s clothes; or

3. Contract: A lease agreement making another party 

    responsible for insuring the property.

Returning to the initial scenario: George Bailey owns the building individually, but Widgets, Inc. is the policy’s only named insured. If the building is damaged or destroyed by any covered cause of loss, the property policy covering the building owes – nothing. The legal person listed on the policy as the named insured, Widgets, Inc., did not have insurable interest; and the natural person with insurable interest, George Bailey, is not covered in the policy as an insured.

Beyond the individual (natural person) ownership of a building, one of several possible ownership scenarios

could exist that must be considered, anticipated and/or researched, including:

1. The building is owned individually by the “owner” of 

    the business operation (as in our example above);

2. The building is owned by several individuals;

3. The building is owned by a separate legal person; or

4. The building is owned by any combination of natural 

    and legal persons.

Attorneys often recommend such separation for various reasons. But sometimes, the building is not owned by the named business entity because it was purchased first, willed to the individual, or any number of reasons. Again, never assume ownership.

How is building ownership confirmed? The simplest way is to ask the question; specifically, “who or what entity owns the building.” Even Mr. Bailey in our example knows he owns the building individually, he just didn’t see or understand the need to tell the agent. Explain the need.

A second method requires individual effort, but it’s quick and painless in most circumstances. Research the county’s online tax, GIS, or other public record system. Most counties offer access to at least one public record. Once the proper site is located, an address search can be done. Depending on the county, massive amounts of building information can be found when such an online search is done:

• Year built;

• Square footage;

• Construction (sometimes);

• A photo or footprint drawing; and

• Who owns the building.

Once you become familiar with a particular county’s website, these searches can be conducted in a matter of minutes. A few minutes of work to save thousands of dollars in uncovered claims, E&O deductibles, and court time seems like a fair trade.

Managing and insuring the separate ownership exposure is the delicate and tricky part. Since the same “person” or groups of persons who/that own the operation also own the building, it is unlikely they will want to purchase a separate Lessors Risk Only (LRO) policy, which is an option.

In most “common ownership” situations presented previously, the owner(s) want the building insured on the same policy as the operation. Two main methods to accomplish this are:

1. Name the building owner as a named insured; or

2. Legally lease the building to the business. Naming the building owner as a named insured. As simple as this seems, this is often an improper or unavailable option – especially if that person (natural or legal) is involved in other ventures or activities. Remember, the specific operation was underwritten and adding named insureds has the possibility of extended protection to unintended or unexpected exposures.

Many underwriters are unwilling to extended what is  essentially LRO coverage in a package policy because of the uncertainty surrounding the breadth of the building owner’s operations. Underwriters may also be unwilling to add the additional named insured because it may own several building or be involved in other operations.

Legally lease the building to the business (named insured operation). This is the most proper way to manage and cover the building owner’s exposure. Remember, insurable interest can be created by contract. The lease agreement can and should be used to create insurable interest by making the tenant operation responsible for insuring the building. Once the tenant has insurable interest by legal contract, the building is properly covered and the building owner’s exposure can be protected by attaching specific endorsements:

• CP 12 19 Additional Insured – Building Owner: This is 

   a property endorsement extending property coverage 

   to the named building owner; and

• CG 20 11 Additional Insured – Managers or Lessors of 

   Premises: A general liability endorsement extending 

   additional insured status to the building lessor/owner.

Creating a proper lease and attaching the proper endorsements extends the necessary protection to the building owner without the need of a separate policy. This is also the best option because many underwriters are unwilling to add the building owner as a named insured on the operation’s (Widgets, Inc.) policy.

To end, never assume building ownership. Always ask what seems like a “duh” question. If the question isn’t asked, research ownership through the county’s website. Once ownership is known, insure the exposure.