By: Mallory Cornell, IIAW Vice President

This article was originally published in the May 2022 Wisconsin Independent Agent

Many of you have been participants in my E&O Risk Management courses and have heard me discuss the importance of a Social Media Policy. Perhaps you’ve even requested a sample template from me. Whether it’s a reminder or an introduction, giving employees guidance for how you want them to represent the agency when they’re online is crucial.

What is the purpose of a Social Media Policy?

The primary functions of a Social Media Policy are to: guarantee a constructive relationship between the organization and its employees, manage risk and preserve the agency’s reputation, discourage the use of company time for personal social media activities, and promote awareness among employees of how their personal information can be accessed and interpreted online.

Why do we need one?

It is important to provide guidance on several aspects of utilizing social media. From everything to defining what “social media” includes to how the individual should represent (or not represent) the agency and the agency brand. As an example, the agency would identify topics such as: do not impersonate the agency or its employees, make statements on behalf of the agency without authorization, or make statements that can be construed as establishing the agency’s official position or policy on any particular issue.

How do I get one?

Just ask! Your friends at the IIAW can provide a sample Social Media Policy for you to tailor to your agency needs and implement within your organization. The sample document outlines the basic needs of the agency. It also includes a place for an employee to acknowledge they’ve received and reviewed the Social Media Policy. This document should be a part of every employee’s personnel file and reviewed on an annual basis.

Reach out today for your complimentary copy of an agency Social Media Policy or any other template you may need to create or update.

As technology allows the ability to service large groups of clients more efficiently, many agencies are increasingly expanding their reach beyond the confines of one metropolitan area. In order to better service their customer base, agencies may open additional locations or may acquire existing entities to expand their business. The management of multiple locations creates new challenges and those challenges if not handled correctly may lead to increased opportunities for error.

Controlled growth whether organic or through acquisition can increase efficiencies and reduce cost. However, it is important to manage that growth. Be sure that the “right hand knows what the left hand is doing”. Consistent culture, compliance and communication throughout the agency at all locations, is essential to prevent confusion and potential claims which may otherwise arise from acquisitions and dispersed locations.

Make sure all staff understands your agency culture. Owners, producers, agents, CSR’s and all staff must understand the focus of the business. If the agency’s stated focus is on personal lines, then the agency should not deviate into complex specialized lines. If the agency focus is on certain niches of business, the agency should train their agents and supporting staff on how to service those markets. Often claims begin when the agency attempts to sell insurance products with which it is unfamiliar. Understand your focus. If you are acquiring agencies, acquire those that fit your vision. Then share your vision with all staff at every agency location on a regular basis. Help your team see what the agency is trying to accomplish and how each person can contribute by staying focused on the goals of the entire organization.

When the workload is heavy and clients demand your attention at your primary agency location, it can be difficult to give your attention to the other office locations. But in order to keep those other locations in line with your vision, you must provide them with the attention they need. You should try to visit your other agency locations frequently, at least once a month. Visit each site for a long enough time that the each site does not put on a front for you but actually reveals to you its true method of operation. By allowing each office to become comfortable with your visits, you can build trust and familiarity. The agents and staff at each location must feel close enough to the primary agency to be able to ask questions, share problems and seek feedback.

Establish uniform office procedures and a standard system of compliance. Each province has regulations to protect their own citizens. If you locate a branch office or even a teleworker, in another state, you must research licensing and other business regulations impacting your insurance operation. Failure to comply with regulatory requirements could lead to regulatory investigation, disciplinary action, or even the possible revocation of your license.If adjustments are needed to be made as a result of the regulations do not begin operating your business until you comply with the law.

For example, an agency had a CSR move to another state and began working remotely as a clerical assistant to their Personal Lines Manager. This employee’s job description did not entail discussing or recommending coverage with clients, and the agency believed that her job description was in line with the requirements of the state department of insurance. However the department viewed it differently and fined the agency $7,000 for the employee not having the proper license and viewed the tasks performed by this employee as “effectuating the sale of coverage”. As soon as the agency was notified of the infraction, they made changes to her job description and directed her to acquire the proper license. They then established a Director of Compliance and Compliance Committee to monitor the activities on an ongoing basis.

Standard operating procedures will enhance the efficiency and management of multiple agency locations. Staff can transfer among agencies, without extensive readjustment. The essential procedures should not vary. Each agency should have similar procedures regarding date-identification of communication with clients and carriers. Additionally, documentation of coverage offered and rejected, and maintenance of expiration lists should be standardized.

This excerpt from a letter we received from the attorney retained to defend an insured, reveals the difficulties in offering a defense when procedures are not followed. The litigation arose from damage sustained by a commercial enterprise where the carrier argued that the agency had not provided the necessary information for the carrier to quote coverage, despite several requests. Counsel stated the agency “has no documentation that it sent the proper information and the agent who worked on the account left the agency several years ago on unfavorable terms. The agent’s CSR says the agent was not detail oriented, was not good about providing information, and often made mistakes.” Defense counsel opined that it was highly likely the judge will rule that the agency failed to provide the necessary information. The agency itself had a strong culture of compliance but suffered from one agent who had not followed the standard office procedures established and who, thus, created a significant problem for the agency.

In addition to implementing uniform procedures around the process of file documentation, the agency should also implement uniform procedures for diary and suspense systems. There should be a centralized agency management system and computers in each location should be compatible with one another. In fact, it is likely that computer systems will become a backbone for your organization as offices are spread out geographically. Additionally, it is essential that you ensure adequate security of personal information acquired from your insureds, and that you provide proper privacy training to all employees. The use of encryption and other measures to protect personal data when transmitted is important. If employees use smart phones, verify the phones are password protected.

As part of the establishment of standardized procedures, make sure the staff in each location knows the method to report an errors and omissions situation. Establish and discuss the procedure with all agents and employees. Do so regularly to prevent hesitation in reporting at the time of occurrence. Don’t let problems linger. Delays could create coverage issues with your professional liability carrier.

Communication is a key to successfully running multiple locations. Free and open communication with all staff is very important when you have multiple locations. Neither the culture nor the compliance can happen if you neglect to focus on communication.

Have weekly staff meetings by phone or webinar. Have your office personnel get together at least once or twice a year to enhance communication between people on all levels.

Communicate your vision to all managers in all locations and they in turn must commit to clearly communicating your vision to others in the off-site agencies. Regular audits and evaluations of the manager and the office are critical to making sure your vision is being carried out according to your expectations.

While striving for positive energy in your organization, do not avoid discussing problem situations. Consider learning opportunities which may present themselves from potential claims situations. Educate your employees about the situations which have created problems in one office so other office sites can avoid the same mistake.

Growth is positive when controlled but be sure that the “right hand knows what the left hand is doing”. Consistent culture, compliance and communication throughout the agency at all locations, can be essential to preventing confusion and potential claims which may otherwise arise from acquisitions and dispersed locations.

Annette Hollingsworth has spent over 30 years in the insurance industry. While with ERC /GE Insurance Solutions/Swiss Re, Annette Hollingsworth has served in a variety of capacities ranging from claims to underwriting, legal to regulatory services and global compliance. Annette now serves in the Products unit where she supports the Insurance Agents Professional Liability underwriters in both the US and Canada. She attended Washburn University undergraduate and KU Law School. She has her JD., CPCU, CLU, and ARC designations.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/or management and/or shareholders.

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

In a hurry? We can expedite this search for resources YOU need.

The team at IIAW created agency-focused evaluations that match an agency to the member benefits they would find value in. Answer a few questions and receive an immediate report with necessary links. Think of it as your personal map to IIAW resources.  

Visit www.iiaw.com/agencysolutions to get started.

The staff at the Independent Insurance Agents of Wisconsin love to find the right resource, course or form for our member agents who call when they’re feeling “stuck”. We understand it can be hard to remember every member benefit we have to offer, so tear out this article (or visit bit.ly/FebRiskyBusiness for a PDF of this article) and hang it on your office wall because we are diving in!

Technology Solutions for Your Agency

Agents Council for Technology (ACT) provides guides to disaster planning, cybersecurity, customer experience and other emerging trends to help your agency. This Big I National resource can offer best practices and information through online tools and on-demand webinars.

Certificates of Insurance

The Certificates of Insurance Resource page on the IIABA website is full of great information including a 2020 webinar and additional on-demand recordings. The IIAW website also features additional online courses for agency employees looking to sharpen their certificates of insurance skills.

E&O Risk Management

For years, IIAW members have had access to the E&O Happens website which is filled with articles and best practices for agencies. Since 2017, agents have also had exclusive access to the IIAW Agency Risk Management program which offers one-on-one consulting, E&O risk mitigation tools and discount opportunities for policyholders.

Education

The IIAW aims to provide quality online continuing education programs through our partnerships with the IIABA and ABEN. These courses are regularly updated and meet the current needs of agency personnel. In addition, the IIAW partners with MyAgencyCampus to bring members best in class training for new employees and employees looking to build their professional skills.

Employee Agreements

Updating Producer Contracts is an important task but not always a quick and easy one. The IIAW has not one, but two great resources to help with this process. The IIABA offers a Guide to Producer Contracts for agencies looking to create or update internal contracts. IIAW partners at Godfrey & Kahn have also developed an Employment Agreement whitepaper with best practices and sample clauses. Agencies can contact the law firm for additional one-on-one support as well.

Hiring (WAHVE, Big I Hires)

As many agencies continue to grow or find the need to replace critical positions on their team, the IIAW has your back with resources to save you money and help with the process. Member agencies have access to an HR toolkit filled with sample job descriptions, a hiring guide and best practices. We also encourage members to explore a contract talent solution called WAHVE which provides the agency with highly skilled professional talent without the added internal expense. The final value-added tool is Big I Hires, offering agencies of all size a DIY Hiring Toolkit, recruiting options and many HR resources.

Marketing and Branding

When it comes to marketing and branding, the IIAW has your back. Many agencies recognize the importance of digital marketing efforts and creating brand awareness within their community but they do not have the internal capabilities to fill this need. Quick and easy resources are key to success and through Trusted Choice, an agency can find social media posts, custom marketing campaigns, Marketing Reimbursement Program and training programs. The IIAW Marketing Resources page is a great place to start to find exactly the tools you are looking for.

Market Access

Looking access for additional markets but don’t have the volume to obtain your own contract? Big I Markets offers a no fees, no minimums option to find the products you’re looking for. This quick and easy option offers access to many carriers who can provide cyber coverage, small commercial, personal umbrellas, jewelry and many more!

Government Affairs

The IIAW is the eyes, ears and voice of independent agents not only in our state capitol but on a national level as well. One of Wisconsin’s most respected government relations firms, Lee Government Relations, covers all facets of the Wisconsin state government and opens the door to the state legislature, Office of the Governor and state agencies.

Online Community

The IIAW Online Community was launched in 2020 and is an online networking hub to ask questions, receive personal feedback and network with other industry professionals. Join today and explore this exclusive platform for insurance agents in Wisconsin.

If you have any questions about these resources or other resources available with an IIAW membership, feel free to reach out to me by email at mallory@iiaw.com or by phone at 608-210-2975.

By: Mallory Cornell | IIAW Vice President

This article was originally featured in our November 2020 Wisconsin Independent Agent magazine. Read the full issue here. 

“Less Risk. More Reward.” That is the title of the course I teach for IIAW E&O policyholders. Those four simple words are at the root of business (and personal) decisions every day – or at least if you are a risk manager they are! “Does the reward outweigh the risk?”. Today, I have a decision for you to make and the risk v. reward conversation is a short one. Join the IIAW Online Community? Well YES, the rewards are endless!

Let’s face it, some people get nervous about the idea of sharing information or asking questions while in a group of their peers. We get that and want to create a space where those nerves become a thing of the past. Our goal is to offer a place for agents, carriers and vendors to all help each other be more efficient (ask a question versus spend hours researching it on your own), more social (not many of us are heading to the bar for cocktails after work these days) and develop new relationships (shook hands to introduce yourself to someone lately?).

The IIAW Online Community was introduced to IIAW Committee Members – now called Thought Leaders – on October 15th. The questions, discussions and polls that have already been posted in just the past few weeks have us laughing, thinking and exploring. To put it simply, it has been awesome.

Here are some of the posts you can expect to see when you sign up for the Online Community – which we definitely encourage you to do:

• Do you use a VoIP phone system? If so, what system do you use and have you encountered any issues? 

• Show us your SNOW pictures!

• Do you use an internal communication system like Slack or Teams to communicate within your agency? 

• Anyone want to meet up for an in-person or virtual happy hour? 

The Online Community is not only a rewarding virtual experience, we’ve extended the benefits to your local community as well.

Participants are eligible to earn gift cards to local businesses of their choice, donations to local non-profit organizations of their choice as well as IIAW swag items (YETI beer mug, smart plugs, whiteboard deskmate – the good kind of swag!).

While there is a lot going on in the world, this is an exciting place to get back to networking, building relationships and treating yourself to some free gifts. We look forward to connecting in the Online Community and “meeting” some new agency team members who have not been a part of the conversation in the past.  Meet you there!

This article was recently published in the August issue of Wisconsin Independent Agent magazine. Read more from Wisconsin Independent Agent here. 

Recently, we have seen an E&O claim trend around insurance limits based on values. The customer’s property has not been properly evaluated, but who should be responsible for determining the value? The advice from Swiss Re Corporate Solutions has long been that the customer is responsible for determining the value of the property. The agent should then take the value provided by the customer and provided insurance based on that amount. Many times, the agent takes on the role of the advisor and a customer will look to the agent to assist with the valuation. In this situation, the agent is likely creating a “special relationship” and has greatly increased their standard of care. If agents are using valuation tools, they must realize the answers they provide are only as good as the information that is entered into them. The agent also then assumes the responsibility of making sure the values are regularly updated to reflect any changes to the property.

Here is an example of what can go wrong and what an agency can do to avoid a $2 million E&O claim.

Andrew, an experienced agent at a large insurance agency, placed Commercial Property coverage for his client who was a real estate developer.  Among the properties he owned, the real estate developer owned a shopping center. The agent and his client had verbal discussions when the policy was initially placed regarding the value of the property.  According to the agent, the value of the building was ultimately determined by the real estate developer, but nothing was put in writing by the agent to reflect how the value was determined or whether the client agreed with the valuation. The agent procured a replacement cost property policy with $2.5 million in replacement cost for the building.

The policy was then renewed each year for 5 years. During this time period, neither the agent nor the client re-visited the issue of the valuation of the property or considered or discussed possible increases in the value of the property.

 The shopping center then burned to the ground. When the client submitted the claim, the carrier paid the limit of the policy. However, the property owner claimed that the replacement cost of the property was actually $7MM and claimed that the property was undervalued. The real estate developer admitted receiving the renewals each year but not reading them. He further claimed that he completely relied on his agent to determine the appropriate insurance coverages, that it was the agent that set the initial value of the property and that the agent never recommended an appraisal at any point. The real estate developer proceeded to file suit against Andrew and his agency.

 What are the major issues in this case?

·       Agent’s failure to document property valuation process in writing

·       Agent’s undertaking to set the value of the property when that is potentially outside his/her area of expertise and the agent may not have a duty to undertake this task.  In addition, the property owner is in a superior position to know the value of his/her own property

·       An insurance broker is not required to ascertain the levels of coverage for a risk.  However, if the agent assumed this obligation even though he didn’t have to, he thereby created a special relationship that obligated him/her to exercise a greater degree of care and diligence.

·       Agent’s failure to consider and discuss increases in value of the property over time i.e. by not performing a yearly analysis of coverages and making necessary modifications to the level of coverage.

What could have been done differently by the agency?

·       Yearly review of property values with sign off by client

·       Written documentation of valuation with client sign-off

·       Written recommendation that the client have the property appraised

What do you think was the outcome?

The case was tried and the agent paid almost $2MM in damages for taking on the responsibility of valuing the property and not doing it properly as well as failing to review the value

If your agency needs to review internal processes such as property valuations, please call IIAW Vice President Mallory Cornell. There could even be E&O premium savings for your proactive E&O Risk Management!