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

Some plaintiff attorneys are almost giddy over the fact that several jurisdictions used the term “property damage” in their respective emergency declarations to justify closing “non-essential” businesses. These attorneys are hopeful that such wording gives them the ability to trigger a business income claim. Given the facts as that have developed since the situation began and those that are continuing to develop, pinning any hopes on such wording appears futile (but it’s entertaining to watch).

Insurance Journal’s article “Business Interruption Claimants Like How Some Localities Worded Emergency Orders,” introduced this discussion, but it doesn’t address the question, does the government calling the presence of a virus on a surface “property damage” factually make it property damage? Does stating something is blue in an emergency declaration make it blue?

Neither local, municipal nor executive orders appear to carry the force of a law, nor is it likely such orders change the facts of physical science. Property damage and what constitutes property damage is not dependent on terms used in an order intended to close businesses not seen as essential to the public good (other than the “public” who happens to own the shuttered businesses). 

Examples of these orders appear to be limited to counties or local orders rather than statewide orders. Orders applying “property damage” wording often read similar to this from New Orleans’ second order:

• Whereas, there is reason to believe that COVID-19 may be spread amongst the population by various means of exposure, including the propensity to spread person to person and the propensity to attach to surfaces for prolonged periods of time, thereby spreading from surface to person and causing property loss and damage in certain circumstances.....

Obviously, certain assumptions were made in the crafting of these declarations. The first is that the virus has a “propensity to attach to surfaces for prolonged periods of time.” This has since proven to be incorrect. A University of Alabama study published in the New England Journal of Medicine stated that the maximum amount of time the virus can live on certain surfaces is up to three days. Further, the CDC states that property to person infection is not a primary cause of infection.

Given this, the first presumption appears to be incorrect - lessening the effect of this hoped-for lifeline towards providing property damage. 

Second, the more disappointing for plaintiff attorneys, simply saying something causes property damage does not change the requirements of physical science. “Damage” is generally understood to mean a physical change in condition such that repair is required. In the case of the presence of a virus, what repair is required? The only possible type of required “repair” is cleaning the surface or the loss of the virus’ viability.

Additionally, the business income form requires more than just “damage” to trigger coverage, there must be “direct physical loss of or damage to property.” This is more than simply saying, “hey, there is damage.” The Big I through its Virtual University has penned several articles detailing the specifics of business income and what is required to trigger coverage. 

Lastly, the jurisdictional authorities seem to have hedged their bets with the closing phrase, “in certain circumstances.”

Simply, such wording in these executive orders does not appear to provide any benefit to the plaintiff attorneys. Improper assumptions and declaring a “fact” without evidence or the support of physical science does not change the reality. After all, if the executive order said the sky was green, that would not make it green.

By: Larry Neilson, CEO | Neilson Marketing Services

As an agent, right now could be the best time ever to begin a marketing effort to organically grow your commercial lines book of business. We are just coming out of two to three months of the most monumental government shutdown of commerce in history. There are still disagreements over whether the recovery will be V, U, or L-shaped but early indicators from the airline and hospitality industries coupled with the most recent jobless-rate drop and payroll gains are encouraging.  

Additionally, businesses receiving renewal notices are experiencing some of the biggest premium increases they have seen in years. The market is continuing to harden with a generation of producers who has never experienced this cycle before. They are going through the renewal process with a business-as-usual approach, not realizing these premium increases should be viewed as an invitation to ask prospects to seek an alternative. How do we know? For one thing, we are seeing among our own agency clients a considerable uptick in lead conversions as a result of today’s market. 

Many agents, however, are wary of getting started too soon and have more of a “let’s wait and see what happens” point of view, regardless of the hard market opportunity. But while those agents wait, the larger brokers are moving to get started with their marketing plans that include a multi-prong strategy. 

Upping the Marketing Game

Multi-modality marketing encompasses digital marketing, demand-generation marketing, and social media. It all begins with your brand and website, which should be carefully analyzed to determine if the site is doing what you need it to do:

• Does your website truly reflect your brand, tell your story – what distinguishes you in the marketplace, why and how can you make a difference in a client’s insurance protection?

• Is your website optimized properly so that you can be found by people who don’t necessarily know your name?

• Is your site properly programmed/coded to provide an enriched user experience across all devices, particularly because mobile devices now account for nearly 57% of Internet traffic?

• Is your site ADA-compliant?

• Are your social media channels set up to thematically align with your website and brand?

• Do you have an organized purposeful content and link-building plan in place? Are you regularly blogging, producing white papers (on why the hard market exists and what it means to business owners, for example), case studies (successful placement of tough accounts), and other share your expertise and thought leadership, especially salient in challenging times?

Once your website and social media platforms are thoroughly reviewed and you have made the necessary changes, which may involve anything from implementing minor adjustments to a total site revamp, the next step is to leverage available data. Identify your prospect base by class of business, minimum employee size and geographic boundaries. Append as much data as you can, including multiple C-suite contacts with emails, phone numbers, and workers compensation X-dates if they are available in your state, to begin prospecting.

Set up a demand-generation email program. This involves creating an email-funnel strategy to attract, engage and convert prospects to customers. An email funnel will help you get your potential

customers from point A to B, step-by-step, and influence them along the way toward your conversion goal. One you have your strategy in place, design, write and launch the campaign.

Boost your campaign with outbound calling. Using a demand-generation marketing platform that utilizes content and reciprocity to create a funnel in conjunction with outbound calling is a way to increase the likelihood of connecting with prospects and obtaining greater conversions.

A good demand-generation software program uses touch points to score leads as they move through the top of the sales funnel from list to leads, qualified leads, and closes. Leads that score over a certain number can be contacted by phone to set up an appointment either virtually or face-to-face. Knowing who to call reduces cold call labor considerably and improves lead quality. Simultaneously, a beacon (which provides on-demand FAQs, chat, and an email contact rolled into one helpful widget) on your website tracks visitors, and banner ads can be used to target them on LinkedIn. Some of the top software provides include HubSpot, Pardot, SharpSpring, Marketo, and Act-On.

During this hard market it’s important to get ahead of renewals well in advance for an opportunity to provide potential clients with options in terms of pricing, coverage terms, and capacity. The combination of a

well-optimized website, consistent content (blogs and social media posts), a demand-generation email effort and telemarketing outreach will help you build your brand and develop a consistent lead flow to gain new customers in this market cycle. 

Larry Neilson is CEO, Neilson Marketing Services, an insurance marketing firm founded in 1988, and provide more than 5,000 professionals with data, outbound, digital, SEO, content, social media and email services. 

By: Josh Johanningmeier | IIAW General Counsel 

On May 21, 2020, in Emer’s Camper Corral v. Alderman, the Wisconsin Supreme Court issued a 6-1 majority opinion confirming a rigorous causation standard for negligent procurement E&O claims.  The Court ultimately found that, in order to prevail on a claim for negligent procurement of an insurance policy, an insured must show that the promised policy was commercially available to them.  While this decision is undoubtedly a win for agents, it is critical that you take care when communicating with clients. 

The Emer’s Camper Corral Case and Decision 

Since 2004, Rhonda Emer and her husband have sold new and used camper trailers under the trade name Camper Corral.  Not long after founding the business, the Emers began purchasing Camper Corral’s insurance through the defendant insurance agency.  Starting in 2007, General Casualty Company of Wisconsin insured Camper Corral.  However, before the commencement of the 2012-13 policy year, General Casualty sent Camper Corral a nonrenewal notice after two consecutive years with at least $100,000 in hail damage claims.  

Following the nonrenewal, the Emers worked with their agent to obtain insurance through Western Heritage Insurance Company.  The 2012-13 policy had a $5,000 deductible for hail damage per camper.  However, the agent told the Emers that, if they could go claim free for two years, he may be able to negotiate the hail damage deductible down to $1,000 per camper.  After two claim free years, the agent contacted the Emers with the news that he had obtained a policy from Western Heritage with a $1,000 deductible per camper for hail damage and a $5,000 aggregate deductible limit.  In reality, the Western Heritage policy the Emers ultimately purchased had a $5,000 deductible per camper for hail damage with no aggregate deductible limit.

In September of 2014, another hail storm swept over the Camper Corral lot.  This storm damaged 25 of the campers in the Emers’ inventory.  Because of the actual terms of the Western Heritage policy, the Emers’ deductible amounted to $125,000.  As a result, the Emers sued the agent for negligence, suggesting he had breached his duty to them by failing to adequately describe the terms of the Western Heritage policy.  For damages, the Emers asked for $120,000, i.e., the difference between their deductible and the $5,000 aggregate deductible they were promised.

The case ultimately went to trial.  However, before the jury could deliberate, the agent moved for a directed verdict, arguing the Emers had not satisfied their evidentiary burden.  The trial court agreed, ruling that, without evidence that the policy promised to the Emers was commercially available to them (and not just generally available in the marketplace), they could not prevail on their negligence claim.  The Wisconsin Court of Appeals affirmed the trial court, and the Emers appealed the case to the Wisconsin Supreme Court.

According to the State Supreme Court, to prevail on their negligence claim against the agent, the Emers needed to prove four well-settled elements: “(1) [the agent’s] duty of care to Camper Corral; (2) [the agent’s] breach of that duty; (3) injury caused by [the agent’s] breach; and (4) actual loss or damage resulting from the injury.”  However, the only issue left for the Supreme Court to decide was the third: causation.

The Wisconsin Supreme Court ultimately held that the Emers had not provided sufficient evidence to satisfy the causation standard.  In their arguments before the Wisconsin Supreme Court, the Emers suggested they only needed to prove that a policy like the one they were promised was commercially available.  The Supreme Court, though, found that was one step short.  Not only did the Emers have to prove that the relevant policy was available in the marketplace, but they also had to show that the policy was commercially available to their business.  Put differently, “[w]hether the unavailability is general, or instead particular to Camper Corral, the policy’s unavailability exists independently of any negligence on behalf of the broker.”  Thus, as the Emers did not show that the policy promised to them by the agent was commercially available to their business, the Supreme Court affirmed the trial court’s directed verdict in the agent’s favor.

Now What? 

This decision is a big win for both insurance agents and E&O carriers defending claims under Wisconsin law.  With the additional burden of having to prove specific availability in negligent procurement cases, agents will see fewer judgments against them and, as a result, fewer lawsuits brought in the first place.  Further, only one Justice dissented in the Camper Corral case.  Thus, even as the makeup of the Court shifts slightly over the next few months, this decision is likely to remain binding precedent well into the future.

With this in mind, you should still see this case as a cautionary tale.  Sure, the case ended with a positive result for both the defendant agent, the E&O carrier and insurance agencies around Wisconsin.  But, it took a full trial and appeals all the way to Wisconsin’s highest court to achieve that result.  It is essential that you take great care when marketing policies to your clients.  Doing so will likely save you the hassle of expensive litigation. 

Conclusion

Ultimately, the Wisconsin Supreme Court’s decision in Emer’s Camper Corral v. Alderman is a huge win for insurance agents and E&O carriers around the state.  This will undoubtedly result in fewer negligent procurement cases brought against agents and stronger defenses in some of the cases and claims that are brought by disappointed insureds.  We will keep an eye on the application of this stringent causation standard—it may well cross Wisconsin’s borders into other states.

By: Roger Sitkins | Chief Executive Officer, Sitkins Group, Inc.

One of the best questions I ever heard came from Andy Stanley, the founder and pastor of North Point Ministries in Atlanta: “What will your story be when it’s time for your story to be told?”

Whenever I’ve asked this question at our senior leadership programs or producer programs, it tends to spur considerable thought. I can see that people are asking themselves, “When the time comes, what is my story going to be?” I think this question applies to you regardless of your role in the agency, whether you’re a leader, a producer, or any other team member.

Although we may not be aware of it, we all are creating stories that someday will be told. Perhaps a better word is “legacy.” What legacy are you going to leave? As I’ve said before, eventually everybody leaves their business.

Granted, most of my readers will be in this business for another 10, 15, or 20 years, if not longer. Why? Because it’s a great business that’s creating opportunities and freedoms that most can only dream of. To seize these opportunities and freedoms, however, you must act! As I’m sure you’ve heard me say in the past, “If you’re going to put the time in anyway, you might as well be great at it.”

So here’s another question: If your agency could talk, what would it say? What would it say today, and what would you like it to say five years from now?

Before you answer that, let me share with you the story of a Best Version Possible (BVP) Agency as it unfolds in my perfect world. It starts with asking “What’s it all about in your agency today?”

The 3 Cs

This is how the BVP Agency responds:

Here at the BVP Agency, we embrace several key themes, the first of which is The 3 Cs:Clarity, Consistency, and Commitment.

Clarity means having a clear view of our vision. It’s what we want and why we want it, based on our understanding of the vision’s purpose and value. In terms of Key Performance Indicators, our agency and all of our team know exactly where we are today, where we want to go over the next three years, and exactly how we are going to get there.

We know the resources and tools we need. We know the personal development plans for each team member. And we know our agreed-upon behaviors and strategies.

We’re all on the same page concerning our business plan. In case you’re wondering how it’s possible for everyone to be on the same page, it’s because our business plan is on one page. Unlike most agencies, we have a single-page summary of our Strategic Business Plan that everyone can rally around.

Further, we believe that direction and destination must match up. Because we have absolute clarity on our desired destination, we have to keep checking to make sure our current direction matches that desired destination. Just like an airplane or a ship at sea, if we get off track just a little bit and “stay the course” without recalibrating, we’ll miss our target by a lot.

Consistency is all about our team members never deviating from our “agency’s way of doing business,” which is quite specific. We have
documented processes and procedures that explain with absolute clarity (there’s that word again!) how things are done in our agency. We know our new business processes in all departments. We know our continuation processes in all departments. (As you know, we don’t renew accounts, we continue relationships.) We know how claims will be handled. We know how all day-to-day transactions will be handled. We know how our technology and automation systems apply to our jobs and how to maximize them.

In all areas, we have identified best practices, which are mutually agreed upon and followed. There is absolute buy-in from all team members. We
accomplish this by asking team members for their input before making any improvements (which is an ongoing process). We know that if they’re
part of the design, they’ll buy in more quickly and enthusiastically.

Commitment holds it all together and starts at the top with our leaders, who are committed to our plans. They’re also committed to continual and never-ending improvement because in our agency, good is never good enough. Our leaders are committed to “over-communication,” which, by the way, can never happen. Most agencies under-communicate, but have you ever seen an agency that communicates too much? (You haven’t, because it doesn’t exist!) Our leaders and our team are committed to our Clients, Colleagues, Carriers, and Communities.

The 4 Cs

We want our Clients to have the absolute best experience that creates raving fans who buy all of their insurance and risk management needs
from our agency. These clients would never think of leaving us, and they love sending us referrals and introductions.

Next, our leaders are committed to all of our Colleagues, our team members. They want to attract and retain the very best. They provide
personal development opportunities for everyone. They truly do provide a “Best Places to Work” atmosphere. It feels like family, because it is!

Further, we’re committed to seeking out the best assortment of Carriers to represent. We want deep partnerships, which is why we don’t represent every carrier out there. We know the 80/20 Rule applies to our carriers, and we believe that less is more. We also are committed to crevice marketing, so we represent carriers that let us specialize, thereby
enabling us to go “narrow and deep” in our marketing.

Our final commitment is to our Communities. They are critically important to us! We live here and work here. We realize how blessed we are, and we want to give back. Although we don’t assist/contribute to 100% of the projects out there, we have a Community Service Committee that helps us identify and select opportunities to support and the ways that we can give back. We’re proud to say that more than 75% of our team members have contributed, whether through time or money, to the community projects we’ve chosen.

Our agency’s overall theme is truly to be our Best Version Possible. It’s a constant work in progress. We’ve simply never allowed “good” to be good enough. And while we’re respectful of our competitors, we believe we’ve become the “category of one” in our marketplace, emerging as the agency that has transcended commoditization and that defies comparison.

We simply don’t want commodity-based clients. If price is the only reason someone comes to us, it will also be the reason they leave us. We’ve raised the bar on everything we do. We’re risk advisors who provide solutions well beyond the simple placement and purchase of insurance products.

We are the feared competition, the point of comparison against which all other agencies are measured.

If your agency could talk, how would it compare to the BVP agency described above, and how do you want it to compare five years from now?

Your BVP is out there waiting for you to arrive. Are you ready for the journey?

The author

Roger Sitkins, chief executive officer of Sitkins Group, Inc., is the nation’s number-one “Agency Results Coach.” He established The Sitkins Network™, a territory-exclusive network of high-performing agencies, and The Better Way Agency, a web-based training program that shows agency owners ways to make significant improvements in all areas of the agency. To learn more, please visit www.sitkins.com.