wisconsin INDEPENDENT AGENT MAY 2020
wisconsin INDEPENDENT AGENT CONTENTS
Independent Insurance Agents of Wisconsin
3, 4........InsurCon2020 10,11.....Insurance Bartender How to Transform Your Digital Presence 14, 15....Agency Operations Key Leadership Practices for Virtual Teams 16,17.....Virtual University How Business Income Responds to COVID-19 In Under 975 Words 21...........Risky Business Are Mortgage Companies Requesting Replacement Cost Estimators 22...........Errors & Omissions E&O Risk Management & The Coronavirus 27, 28..... Members in the News 29...........Government Affairs WI State Assembly Passes COVID-19 Relief Bill 30, 31.....Virtual University Unwrapping Gregory Packaging: Proving No Business Income Cover for COVID-19 Closures 32.......... Commentary from Counsel Wisconsin COVID-19 Law Modifies Unemployment Law 35...........Virtual University Are There Any Weird Homeowners’ Coverage Exposures? 36............Food For Thought
ADVERTISERS & INFORMATION 26.................AAA 7, 8, 9...........Acuity 34.................Badger Mutual 5...................Berkshire Hathaway GUARD 34. ...............DAIS 20.................IIAW Agency Solutions 26.................IIAW CE Education Calendar 34.................IMT 15.................JM Wilson 6...................Keystone 24, 25...........Penn National Mutual 22.................Prelicensing Schedule 17.................Robertson Ryan & Associates 33.................Society 37.................Secura 18, 19...........West Bend Mutual 12.................Western National
Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2020 For information on advertising, contact Kaylyn Zielinski, 608.210.2977 or kaylyn@iiaw.com.
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wisconsin INDEPENDENT AGENT
725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 Fax: (608) 256-0170 www.iiaw.com
2019-2020 EXECUTIVE COMMITTEE President: Chris Costakis Midwest Insurance Group LLC, Delafield President-Elect: Darrel Zaleski Spectrum Insurance Group, Eau Claire Secretary-Treasurer: Marc Petersen American Advantage - Petersen Group New Berlin
Chairman of the Board: Jason Bott Robertson-Ryan & Associates, Milwaukee State National Director: Steve Leitch Leitch Insurance, River Falls
2019-2020 BOARD OF DIRECTORS
Mike Ansay Ansay & Associates, Port Washington Nick Arnoldy Marshfield Insurance Agency, Inc., Marshfield Mike Harrison R&R Insurance Services, Inc., Waukesha Ryan Leitch Leitch Insurance, River Falls Aaron Marsh Marsh Insurance Services, Inc., Rice Lake Joanne Lukas Szymaszek Johnson Insurance Services, LLC, Racine Chad Tisonik HNI Risk Services, LLC, New Berlin Andrea Nelson Unisource Insurance Associates, LLC, Wauwatosa
IIAW STAFF
Matt Banaszynski Chief Executive Officer 608.256.4429 | matt@iiaw.com Mallory Cornell Vice President and Director of Risk Management 608.210.2975 | mallory@iiaw.com Kim Kramp Association and Agency Accounting Manager 608.210.2976 | kim@iiaw.com Trisha Ours Director of Insurance Services 608.210.2973 | trisha@iiaw.com Kaylyn Zielinski | Marketing Specialist 608.210.2977 | kaylyn@iiaw.com Evan Leitch Technology and Risk Advisor 608.210.2971 | evan@iiaw.com Jennifer Petersen Membership Engagement and Events Coordinator 608.210.2972 | jennifer@iiaw.com Diana Banaszynski Education Coordinator 608.256.4429 | diana@iiaw.com
On The Cover... The IIAW’s 121st Annual InsurCon Convention has been rescheduled to September 8th-9th at the Kalahari Resort in Wisconsin Dells. We remain excited to host InsurCon later this year, as well as welcome our keynote speaker, Hall-of-Fame Quarterback Joe Theismann, and famous 80s, 90s and 2000s cover band, Granny Shot. Visit our website at www.iiaw.com for up-to-date details and to book your hotel rooms. See you then!
SEPTEMBER 8-9 KALAHARI RESORTS WISCONSIN DELLS, WI
T UES DAY, S E P TEMBER 8 TH 11:15AM-12:45PM
AWARDS LUNCHEON AND BUSINESS MEETING
Join us as we honor our 2020 Award Winners and conduct our annual business meeting. A plated lunch will be served for all those in attendance of the meeting.
“EXTRACTING DATA FROM YOUR AGENCY MANAGEMENT SYSTEM” (2 CE)
Join the IIAW Automation/Technology Committee for a robust discussion on what data to collect from your agency management system, how to extract it and then how to use that data for business purposes.
“HARASSMENT IN THE WORKPLACE, EMPLOYMENT PRACTICES LIABILITY INSURANCE (EPLI) AND THE IMPACT OF THE #METOO ERA” (1 CE)
This session will examine the #MeToo movement’s effect on the workplace, harassment claim trends, litigation trends, and anti-harassment legislation that has been passed recently. Practical tips regarding compliance, mitigating measures companies can take, and carriers’ risk management resources will also be reviewed.
“ETHICS AND TRUST” (3CE)
This class will discuss the Ethics in the Insurance Industry. Specific focus is given to the concept of trust as a key component of an ethical insurance agent. The course is a combination of instructor lead lecture, group discussion and group case study research. Agents will be able to walk away from this class with a better understanding of how trust plays an integral role in ethics.
“EXPLORING PRIVATE AND PUBLIC FLOOD MARKETS” (1CE)
Two perspectives, one topic. Two industry experts will discuss the private flood insurance market as well as the National Flood Insurance Program and other emerging flood issues and concerns.
“INSURTECH MEETS INNOVATION”
Startups are emerging in all facets and all industries. Learn about some new “insurtech” startups participating in gener8tor’s OnRamp Insurance Accelerator, along with recommendations for identifying and partnering with emerging technology firms to improve your business.
Africa 60/70/80
1:00PM-2:50PM Africa 30/40
1:00PM-2:00PM Africa 10/20
Automation/Technology Committee
Laura Lapidus, Management Liability Risk Control Director, CNA
2:10PM-5:00PM Africa 10/20
3:00PM-3:50PM Africa 30/40
4:00PM-5:00PM Africa 30/40
6:00PM-9:00PM 9:00PM-12:00AM
Jeff Bykowski, SECURA Academy Training Consultant
Marc Treacy, Managing Director of Flood Insurance, ISO and James Sink, Regional Flood Insurance Liaison, Department of Homeland Security – FEMA Region 5 (Floodplain Management and Insurance Branch)
Troy Voseller, Co-Founder of gener8tor
COMPANY HOSPITALITY HOURS INSURCON2020 ENTERTAINMENT
Africa East
Its time cut loose and enjoy some great entertainment and music from Granny Shot. This is a great time to network, enjoy company hospitality booths and just have fun!
W ED N E S DAY, SEPTEMBER 9 TH 7:45AM-8:45AM
GRAB & GO BREAKFAST
Africa Ballroom Foyer
9:00AM-10:15AM Africa East
10:30AM-11:15AM Africa East
11:30AM-12:00PM Africa East
“THE EVOLVING CYBER RISK LANDSCAPE”
Edward Chang, VP of Cyber Risk Management at Travelers Insurance
Cyber liability insurance is one of the most quickly evolving products in recent memory. This presentation will focus on cyber risks that businesses need to be aware of and on the ways that businesses can protect against those risks, including through cyber insurance.
“EVERYTHING SPEAKS: ALIGNING YOUR MARKETING EFFORTS TO UNEARTH YOUR TRUE VALUE”
You will learn how to effectively align your company image and brand both internally and externally via digital and social media.
“DIGITAL TRANSFORMATION PLAYBOOK: HOW TO TRANSFORM AND COMPETE IN A BRICKS AND CLICKS MARKETPLACE”
As the industry continues to experience many technology and regulatory changes it is important to take the time to discuss what is most important for agents to know. Join Matt as he shares industry knowledge and insight on emerging trends, threats and opportunities. The discussion will also include Q&A if time permits.
LUNCH & KEYNOTE SPEAKER: JOE THEISMANN
Join us as we listen to former Washington Redskins star quarterback and NFL Network analyst Joe Theismann discuss managing unforeseen change with adversity. Joe has evolved from an athlete to a businessman and his high energy presentation is one you will not want to miss! We will also be giving away autographed footballs, jerseys and there will be a photograph opportunity with Mr. Theismann in the Exhibitor Showcase following his presentation.
EXHIBITOR SHOWCASE
This year’s Exhibitor Showcase is a must-see event! With more exhibitors and more prizes, don’t miss the opportunity to win cash or to meet your next great partner for success. InsurCon2020 will feature the first ever Blackout Bingo game where agency owners and employees will have multiple chances of winning hundreds of dollars!
PRIZES & GIVEAWAYS
Super Door Prize winners and Blackout Bingo cash prizes will be awarded. Must be present to win.
Spencer Smith, Founder of AmpliPhi Social Media Strategies
Matt Banaszynski, IIAW CEO
12:15PM-2:00PM Africa East
2:00PM-5:00PM Africa West
5:00PM
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K E Y NOT E S P E AKE RS JOE T H EIS MAN N Former NFL Quarterback & NFL Network Analyst
Joe Theismann is an entrepreneur and the former star quarterback for the Washington Redskins. Most recently, he spent the last 2 decades working for ESPN and the NFL Network as an NFL analyst. A 12-year NFL veteran, Joe played in 163 consecutive games from 1974-1985 for the Washington Redskins and holds Redskin records for passing yardage, completions and attempts. He was a two-time Pro Bowl selection and Pro Bowl MVP. Joe Theismann’s career ended abruptly in 1985 after sustaining a badly broken leg during a Monday Night Football game against the New York Giants on national television. In 2003, he was inducted into the College Football Hall of Fame. With every chapter of his life, Mr. Theismann evolved from athlete to the ultimate businessman. An Emmy award winning analyst, business man and athlete, he utilizes his gifts, talent and high energy to share his strategies for handling unforeseen change.
S PENC ER X . S M I T H Founder of AmpliPhi Social Media Strategies
Spencer X. Smith is the founder of AmpliPhi Social Media Strategies, and an Instructor at the University of Wisconsin and Rutgers University, where he teaches classes on Social Media Strategy. He’s been called a “Digital Marketing Expert” by Forbes, and AmpliPhi is the winner of four consecutive InBusiness Magazine Executive Choice Awards for Social Media Consulting Company. He has been featured and quoted in Money Magazine, Entrepreneur, Inc. magazine, and dozens of other publications, and writes columns for InBusiness Magazine, The Huffington Post, and The American Bar Association.
ED WA R D C H AN G VP of Cyber Risk Management at Travelers Insurance
Edward Chang leads the Travelers cyber risk control practice. In that capacity, he is involved in underwriting, risk control, and catastrophe analysis for the company’s cyber insurance products. Prior to Travelers, Eddie was a federal prosecutor where he focused on prosecuting Romanian phishers, Nigerian fraudsters and other cyber criminals.
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MAY 2020
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doesn’t just tell partner agencies what the path looks like, we walk it with them. We understand the challenges independent agencies face and what it takes to propel them towards growth. We work shoulder-to-shoulder with partner agencies to enable them to reach greater levels of success.
Because independence works better together.
Contact JoAnn Hartung: 570.473.4340 | jhartung@keystoneinsgrp.com keystoneinsgrp.com 6
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OPEN SEMCI Single-entry, multiple-company interface (SEMCI) is like magic!
Acuity, long recognized as a leader in agency interface technology, is committed to supporting SEMCI in commercial lines. SEMCI drives efficiency in the quote and application process and allows you to choose how you want to do business with Acuity. Acuity currently partners with several of the leading commercial lines insurtechs. We are building, exploring partnerships, or expanding with numerous other independent agency technology solutions. And Acuity is on the forefront of integration technology, continually building the connections necessary to be ready to connect to new insurtechs as they emerge.
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We l o v e o u r independent agents and this partnership will enable them to quote and place small business faster and more e ffi c i e n t l y BEN SALZMANN CEO, ACUITY
WELCOME TO TARMIKA:
Acuity is now on the premier comparative rating platform for independent agents.
The Independent Insurance Agent’s Go-To Platform For Quoting Small Commercial Business. A
QU
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ESU LTS C
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IER A CARR IER B CARR IER C CARR BIT SUM
42%
No Yes Workers Comp
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Business Owners Policy
XT
Semsee is simple. Our easy-to-use, cloud-based submission platform is intuitive for producers, marketers and CSRs to manage your agency’s quoting activity.
NEXT
Semsee is smart. We dynamically combine carrier questions into one smart form, auto-filling business & property data and performing real-time risk appetite checks.
Because we believe selling small commercial is a BIG deal! C O N TAC T U S:
Commercial Auto
info@semsee.com / 646.779.7595 / semsee.com
Semsee is fast. The smart form is submitted to multiple carriers, immediately returning quotes to our platform & creating records in your carrier portals. No redundant data entry!
I N PA R T N E R S H I P W I T H
INSURANCE BARTENDER
HOW TO TRANSFORM YOUR DIGITAL PRESENCE The IIAW welcomes Kaylyn Zielinski to the team. Kaylyn has some wonderful tips to share with our readers about digital marketing and using social media for your agency. She has also created a complete Digital Marketing Playbook, which all of our members have access to. Enjoy these quick tips from Kaylyn, the new IIAW Marketing Specialist.
When today’s consumers are looking for insurance, they turn to their phones, computers and tablets to find exactly what they’re looking for at exactly the time they’re looking for it. Consumers are no longer looking in a phone book to find providers in their areas. To capture the attention of these digital-age consumers, you’ll need to show up on their devices. Now, more than ever, you will need to debut on their screens and stick in their minds. There’s no time like the present to develop your digital footprint.
Your Marketing Plan A quick Google search for “how to create an online presence” will leave your mind reeling as you decide where and how to start. First, start by creating a marketing plan. If you already have a marketing plan for traditional outlets, it’s time to apply it to today’s new medium by focusing on your website and social media sites. Next, run through your agency’s strengths and develop goals on how you plan to exploit those strengths online. Finally, determine your target audience. As an insurance agent, you may describe your target audience as individuals, families, business owners and commercial businesses in XYZ city or certain area.
With a proper marketing plan, a website and a social media presence, you can create an online existence that will push your agency ahead of your competitors. The best part of this process is that most digital marketing is free. The biggest investment you’ll face is in the time and the attention you will spend developing your online presence. However, this time investment will pay off.
Tequila Sunrise Pops The ombre effect in these pops is shockingly easy. All you need to remember is drop the grenadine in after you add the juice mixture. THAT’S IT! Happy Cinco De Mayo.
Ingredients
• 2 c. pineapple juice • 1/2 c. tequila • 1/4 c. grenadine • 2 limes, sliced 1/4” thick
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Steps to Make It 1. Place 9 (3-oz.) dixie cups on a small rimmed baking sheet. In a large liquid measuring cup, whisk together pineapple juice, tequila and lime juice. Pour into dixie cups until they are 3/4 full, then pour about 1 teaspoon grenadine into each mold. 2. Use a paring knife to create a slit in the center of each lime slice then insert a wooden spoon or popsicle stick. Place on top of each cup, making sure there is no room between the mixture and the lime slice.
3. Freeze until solid, about 4 hours. 4. When ready to serve, cut open Dixie cup with scissors and peel them away from the pops.
Understanding your goals and your target audience will help you further develop content that will put your agency at the forefront of their online searches.
You can get to know your clients, and your clients can get to know you too.
Your Website Your website should be the cornerstone for all information coming from your agency. If you don’t have a website already, today’s the day to start. The Big I partners with ITC, Forge 3, Titan Web, Advisor Evolved and Marketing 360. When creating or optimizing your website, keep these best-practices in mind: • Prioritize your top-visited webpages On average users spend about 15 seconds on a website, according to Tony Haile of Chartbeat. Those visiting your website don’t want to have to spend a lot of time to search around. If they have to search, they may go elsewhere (potentially your competitors) to find the information. The most visited webpages should be the easiest to find. If they’re not, it’s time to rearrange your layout. • Check your analytics and create content that’s targeted to what your most visited pages are. (Your website host may offer built-in analytics, otherwise, Google Analytics is a helpful tool for reviewing your website stats.) • Keep visitors engaged by making your website visually appealing. • Ensure your website is mobile friendly. According to Statistica, over 52 percent of all web traffic worldwide is done on a mobile device. • Have a complete website. Ideally, a complete website will answer these questions: who, what, when, where, why and how. A customer on your website should have no problem finding the answers to their questions and they should feel compelled to start the process by requesting a quote. Your Social Media Presence Social media is a great way to freely engage with your audience.
While there are multiple social media sites you can join, keep these rules in mind across all platforms: • Keep your pages consistent by having all accounts under the same profile name. Your customers will be able to find you easier by keeping the same name. Along the same lines, make your profile photo the same. We recommend using your agency logo as your profile photo for your business pages. • Create a publishing schedule and stick with it. Keep your pages relevant by posting up-todate content on a regular basis. • Allow your agency’s personality to shine through your social accounts. You want your social media platforms to be the go-to spot for engagement, and the most engaging content is humanizing content. Social media allows you to show the human side of your business and allows you to build a community that others want to be a part of. If it aligns with your brand’s marketing plan, stay away from overly formal content on your pages. You can share formal ideas, but make them fun to understand and/or interact with. Now you have the framework to get started on developing your online presence. For a more in-depth guide at developing your digital marketing plan, check out IIAW’s new Digital Marketing Playbook.
> Matt Banaszynski CEO of IIAW
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NEW TO THE TEAM Kaylyn will be an important part of delivering important information, keeping the IIAW website up-to-date and maintaining an online social media presence for the Association. I recently sat down to learn a little more about Kaylyn. I think you will all agree that she is a great fit for the IIAW and for the Association as a whole.
What’s one of your favorite memories from the past year? My favorite memory from the last year was getting engaged. My fiancé, Justin, proposed while we were on vacation with both of our families, and it was perfect!
What’s your guilty pleasure? Definitely pizza. I could and would eat it for every single meal if given the chance.
The IIAW Welcomes Kaylyn Zielinski, Marketing Specialist Recently, Kaylyn Zielinski joined the IIAW team as our new Marketing Specialist. Bringing both digital and print marketing experience, as well as a degree in Journalism, she will surely be a unique asset to the team. She has already shown the ability to work under difficult and stressful circumstances as she joined IIAW just prior to the Safer at Home order. Kaylyn has already created eye-catching materials and powerful video messaging for the IIAW. Please take a moment to learn more about Kaylyn and help us welcome her to the IIAW team! Kaylyn will be the point-of-contact for our monthly magazine and will work with everyone on the team to deliver exceptional service to our members and supporters.
When you were a kid, what did you want to be when you grew up? When I was a kid I wanted to be an editor for a book publisher.
What would we most likely find you doing on the weekend? On the weekends (pre-quarantine) you would find me hiking with Justin and our pup, Lucy. If you have any questions or would like to welcome Kaylyn, she can be reached at kaylyn@iiaw.com.
> Mallory Cornell,
IIAW Vice President and Director of Risk Management
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AGENCY OPERATIONS
Key Leadership Practices for Virtual Teams We are living in an environment where circumstance forces change! Work teams everywhere have been forced to shift quickly to a work from home setting.
Fully 72% of respondents to the BRC survey strongly agreed with the idea that virtual teams require more team communication than do co-located teams.
The MyAgencyCampus team reached out to virtual team leadership expert Donna Dennis, PhD to learn more about “Key Leadership Practices for Virtual Teams.” See below for some just-in-time recommendations.
3. Adjust to the medium.
Both leaders and team members must cope with many other challenges. A study conducted by the Business Research Consortium (BRC) in association with American Management Association survey of 1,500 individuals revealed the following seven suggestions for companies that want to improve the efficiency and effectiveness of their virtual teams.
Pick up on more subtle cues (such as tone of voice)
1. Remember that good leadership is different.
Know nuances of cross-cultural communication
It is tempting to believe that traditional leadership qualities are so general that they easily translate to virtual team leadership. Unfortunately, that is just not true.
Ask more questions to get to a common under standing of a problem or issue
2. Emphasize communication even more Yes, nearly every leader has been told to “communicate, communicate, and then communicate some more.” What is true for leaders in general is doubly true for virtual leaders. In fact, it’s usually true for all virtual team members.
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The study shows that team member engagement is strongly influenced by the degree of visual feedback members are getting. For example, participants in voice-only virtual meetings (the kind so common in the corporate world today) are much less likely to be engaged than participants in face-to-face meetings and in meetings with high-quality videoconferencing. Without a visual element, leaders must do things such as:
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4. Do more to establish trust. Because virtual team members often lack the time and opportunities to talk to each other informally, trust can be hard to build. The best virtual leaders tend to build “swift” trust, knowing that distance makes it more difficult. They provide goals, roles, responsibilities, strategies, and a vision to create a common purpose and shared objectives.
They establish agreements and make expectations clear so that all team members understand responsibilities and proper etiquette. 5. Develop robust processes and, where needed, structures. Not only must virtual leaders make expectations clear, they also must establish more checkpoints with explicit guidelines. 6. Reduce or avoid “storming” when possible. Back in the 1960s, Professor Bruce Tuckman developed the idea that teams need to go through four stages: forming, storming, norming, and performing. Virtual teams are different in that the “storming” stage (during which different members strive for a time to put forward their ideas) is often curtailed. This does not mean virtual teams need to avoid all disagreements and conflicts, only that leaders and members should be proactive and handle different perspectives right away, as opposed to letting them linger. 7. Devote resources to development. Most organizations do not develop leaders and other employees in the art of virtual teaming. Yet, the BRC study indicates that a lack of experience among members of virtual teams is a serious challenge.
JM Wilson 100th-WI-Indep-Agent Outlines.indd 2
Therefore, we think it pays to educate not only leaders but also potential team members about how to thrive in a virtual team environment. The study also indicates that first-level and middle managers tend to have fewer virtual leadership skills than senior managers and project managers. About Donna J. Dennis, Ph.D. Donna is a leadership development professional specializing in solutions for leaders working in virtual and remote teams. Earlier in her career, Donna worked for, Chubb and Son, Inc as well as other corporations in various leadership development positions. Donna’s teaching academia experience includes The Wharton Business School, the University of Pennsylvania and Rider University. MyAgencyCampus: Online courses for training agents and brokers including property and casualty new hire curricula, business skills for sales and service team members and upskilling new leaders. Visit www.myagencycampus.com (An offering from New Level Partners LLC). If you are interested in scheduling a webinar on Virtual Team Leadership, please contact aschroeder@newlevelpartners.com.
> Donna J. Dennis, Ph. D.
Virtual Team Leadership Expert
12/5/19 2:51 PM
VIRTUAL UNIVERSITY
HOW BUSINESS INCOME RESPONDS TO COVID-19 IN UNDER 975 WORDS Business Income Before any insurance policy responds to a claim, the loss must first meet all the requirements of the insuring agreement. The insuring agreement is the broadest the coverage will ever be. If the loss is excluded by the insuring agreement, there is no coverage.
• ISO introduced this endorsement to negate “efforts to expand coverage and to create sources of recovery for such losses, contrary to policy intent.” • When attached, there is no question coverage is excluded.
The Business Income insuring agreement reads: We will
Coverage applies only during the Period of Restoration:
pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.
Key Points: Suspension must be caused by direct physical loss of or damage to property. Direct property damage is required. Damage is generally defined and understood to mean “a distinct, demonstrable, and physical alteration” of a property’s structure. A virus cannot cause such damage. There must be a covered cause of loss. There are two exclusions that disqualify a virus as a covered cause of loss. One is within the policy and the other is found in a mandatory endorsement. • ISO’s business income policy excludes: Discharge, dispersal, seepage, migration, release or escape of “pollutants….”
• A “pollutant” is defined to mean: “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste” • Contaminant is not a defined term, but it is a biological term of art defined as “a contamination of food or environment with microorganisms such as bacteria, VIRUSES, fungi or parasites” • A virus is an excluded cause of loss.
• CP 01 40 – Exclusion of Loss Due to Virus or Bacteria endorsement is attached to the policy. • Introduced by ISO in 2006 as a mandatory endorsement.
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The business income policy pays during the Period of Restoration, this is the period that the business is shut down and unable to operate due to a covered cause of loss. • Because there is no property damage as understood by the courts; and because the presence of a virus is excluded, the insured never reaches the period of restoration. However, assume the courts decide the opposite. • To trigger the Period of Restoration, the courts must decide: • The presence of a virus does cause direct physical loss or damage; and • Neither the pollution exclusion nor the CO 01 40 excluded the loss. • The period of restoration most often begins 72 hours after the business-closing loss (this time period can be endorsed down). • 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 – which is 72 hours. The period of restoration does not begin for 72 hours in the unendorsed Business Income form. By the time the POR begins, the virus is no longer causing property damage.
Result: NO Business Income coverage for COVID-19! Civil Authority There is one exclusion in all Cause of Loss forms few are discussing. The concurrent causation section specifically excludes governmental actions, including business closures: • We will not pay for loss or damage caused by or resulting from any of the following: Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body.
Government shutdowns are specifically excluded. Any discussion of Civil Authority coverage begins with this exclusion. Civil authority coverage is granted only because of the “Additional Coverage – Civil Authority.” This is important to understand because when coverage is given as an exception or in direct response to an exclusion, the carrier gets to control the breadth of coverage granted. The additional coverage granted by the Civil Authority provision contains three requirements also found in the business income coverage: • There must be physical damage to property; • Damage must be caused by a covered cause of loss; and • Coverage begins 72 hours after the order of the Civil Authority
If all the above Civil Authority conditions are met, other coverage triggers still preclude coverage for COVID-19 losses: • The actions of the civil authority prohibit access to the insured premises. Access to the insured’s premises is NOT necessarily prohibited; these are shelter-in-place orders with exceptions; •Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage. Access to the area is NOT prohibited, people are still in the area – especially if there are “essential” businesses in operation. And if the insured is an “essential” business (like a restaurant), people can still come, they just can’t stay. There is no preclusion or prohibition of people in or to the area. • The action of civil authority is taken in response to dangerous physical conditions…. These aren’t dangerous physical conditions, at best (or worst, if you like) these are dangerous biological conditions. Result: NO Civil Authority coverage
But Civil Authority is subject to a few unique requirements or rather limitations: • The damage occurs at premises other than the insured’s premises; • The damage must be within one mile of the insured’s premises (unless altered by CP 15 32 Civil Authority Changes – the distance is up to the carrier); and • Coverage is provided for up to four weeks (unless changed by the CP 15 32 – up to 180 days).
>C hris Boggs
Big “I” Virtual University Executive Director
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Are you or your agency ready for a positive change? Robertson Ryan has been offering innovation through our unique Agent Owner structure since inception in 1960. Time and time again after an agent or agency joins us they say, “We wish we did this years ago.” Our team recognizes the strength and power behind the agent and insured relationships so we’ve built, and continue to fine-tune, a support network rewarding those affiliated with RRA. Find more at, www.RobertsonRyan.com/AgentOwner ...and let’s connect. Call or email me 414.221.0363 or cillman@robertsonryan.com. I look forward to answering your questions!
Chris Illman, CEO
www.RobertsonRyan.com wisconsin INDEPENDENT AGENT
MAY 2020
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18 Years and Counting
GOVERNMENT AFFAIRS
Unlike many other carriers, West Bend believes in the value of long-term relationships. That’s why many of our personal lines underwriters, like Sarah, have worked with their agents for so long. Sarah’s agents trust her knowledge, making it easier for them to do business with West Bend. And that makes the relationships that much stronger.
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MAY 2020
wisconsin INDEPENDENT AGENT
West Bend Mutual Insurance Company Location of Company Headquarters: 1900 South 18th Avenue, West Bend, WI 53095 Founded: April 1894 Company Web site: thesilverlining.com What sets West Bend apart from other companies? There are many things that set our company apart, but these are the most important: 1. We develop and nurture strong relationships between agents and associates through personal contact, responsible actions, and a genuine concern for our valued partners. We use such means as agency performance programs, continuing education, and advisory boards to strengthen the bonds between agency and company and ensure our mutual success. With senior management, with the underwriting team, with billing, with claims, in fact with our entire company, you simply will not find a more dedicated, personal, community-oriented, and caring group of people. 2. With a broad personal lines coverage package, a full range of commercial products and services, insurance for specialty lines, and bonds, our robust product portfolio provides our independent agency partners with a market for a large percentage of the business they write. 3. Around this we wrap outstanding service. Our associates’ dedication and commitment to providing outstanding service to our policyholders and independent agent partners are the foundation of West Bend’s Silver Lining® brand, The Worst Brings Out Our Best®. Our priorities for 2020 We pledge our commitment to distribute our products through independent insurance agencies. We will continue to work with them to find new ways to meet the ever-changing needs of our policyholders. We know we have to make it easier for our agents and policyholders to do business with us. Our agents can rest assured the focus of our priorities and initiatives are the needs of our customers and our associates. At a time when other companies are paying less attention to relationships with their independent agency partners and choosing to distribute their products through multiple channels, West Bend remains dedicated exclusively to independent agents. – Kevin Steiner, President and Chief Executive Officer
*West Bend’s Exclusive Sponsor Profile was incorrectly printed in April’s issue.
wisconsin INDEPENDENT AGENT
MAY 2020
19
AGENCY SOLUTIONS
TRUSTED CONSULTING FOR THE INDEPENDENT AGENT Because we know how important it is for you to succeed in business, IIAW has created a portfolio of solutions built just for you.
TECHNOLOGY
STRATEGIC
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We help you navigate and choose the best solutions to fit your needs
Protect your investment by reviewing business goals and strategies
Update and improve agency workflows and operating procedures
Review financial processes for accuracy and efficiency
Review your agency marketing efforts and discover helpful tools and resources
YOUR FIRST CALL
We are a trusted partner for independent agents across the nation and a leader in agency risk management and agency solution
Mallory Cornell, IIAW Vice President mallory@iiaw.com www.iiaw.com
RISKY BUSINESS
ARE MORTGAGE COMPANIES REQUESTING REPLACEMENT COST ESTIMATORS? The coronavirus pandemic is having a tremendous effect on many different aspects of life. While all of this has certainly influenced your personal and professional habits, it’s important to focus on how changes are managed from an operational standpoint within the agency.
The agency makes no assurances that the policy limits provided will be adequate to rebuild the structure.”
It has recently been brought to our attention that mortgage companies are making more frequent requests for replacement cost estimates. While it has always been a fairly common practice for a lender to verify a valid insurance policy is in place, the exposure now is the language used to describe the policy and limits and as well as the documentation requested.
In an effort to expedite the processing of this request, many agency procedures include sending the RCE to the lender. While this may seem like the easiest solution, it is important to be mindful of any contractual language with carriers and vendors that would prohibit the agent from sharing such documents with a third party. While it may be difficult, at times, to push back on this request it could result in other consequences for the agency.
The Danger of Guarantee Independent agents should always be careful when providing anything at “100%” or “Guaranteed”. There is too much variability and change to offer this wording in the insurance industry. So, what about mortgage company requests for “guaranteed replacement cost”? As a licensed insurance agent, you could face disciplinary actions for misrepresenting the coverage the homeowner has in place as indicated in Wisconsin statute 628.34(1)(a). It is extremely important to standardize the response to these requests from mortgage companies.
Sharing Replacement Cost Estimator (RCE) Documents
Take the time to update internal workflows and procedures to ensure your response is consistent and does not create unintended exposures for the agency. Agency exposures greatly increase when operational changes occur, and employees should be diligent about questioning new requests and procedural inconsistencies. If your agency has any questions regarding agency operations or responses, please reach out to Mallory Cornell at Mallory@iiaw.com.
Recommended language has been shared from the Florida Association of Insurance Agents (FAIA) and advises agents to use the following: “It is the practice of this agency to insure structures for their estimated replacement cost as determined by the insurance company. Building limits are estimates only and are arrived at based on information provided by the policyholder and/or industry standard software used to estimate replacement costs. The actual cost to rebuild the structure may exceed the policy limits, especially during a catastrophic event and/or where an ordinance or law impacts repair or replacement.
> Mallory Cornell,
IIAW Vice President and Director of Risk Management
wisconsin INDEPENDENT AGENT
MAY 2020
21
ERRORS & OMISSIONS
E&O RISK MANAGEMENT AND THE CORONAVIRUS You are all very aware of the events of the last several weeks and the Coronavirus. We are not health experts and there are many others more qualified to give you that advice. We CAN, however, give advice regarding how to reduce the likelihood of an errors and omissions exposure as a result of this event. We have already become aware of some attorneys who are trying to take advantage of this situation for monetary gain against insurance agents. Our advice during this event is no different from what we have said in the past. If your agency has developed good practices, you will be better positioned to avoid problems. Here are the practices of a good insurance agency: • DON’T MAKE CLAIMS DECISIONS! Let the insurance carriers do that. • DON’T ADVISE YOUR CUSTOMERS IF CORONAVIRUS related items are COVERED OR NOT! Let the insurance carriers do that. • If a carrier takes the position that losses arising from the Coronavirus are not, or may not be covered, do not engage in advocacy asserting that “We thought it was covered...” That will simply be used by your client to prove that you knew the client wanted coverage for perils like the Coronavirus, but you failed to procure coverage. • Report all claims and potential claims to EACH AND EVERY CARRIER that could potentially have a policy that could apply. This includes CGL, Personal lines, Umbrella, Excess, Workers Compensation, Specialty and any other policy in place for your customers. • USE THE RESOURCES PROVIDED BY YOU BY THE IIABA. It is a valuable resource for you, your staff and your agency that provides many sources of information. • Be empathetic, but don’t tell anyone that something is covered or not. You can continue to tell them you feel sympathy for all affected by the Coronavirus, but customers MUST report a claim to their insurance carrier to determine if there is any coverage for the event. • Remember, if you executed an agency agreement with one or more insurance companies, you MUST report all claims or potential claims as required by that agreement, even if your customer tells you not to do so. • Maintain vigilant contact with your insurance carriers to determine what action THEY want you to take. • DOCUMENT DOCUMENT DOCUMENT!!! This continues to be the foundation of sound E&O risk management. DOCUMENT EACH AND EVERY TELEPHONE CONVERSATION, EMAIL, TEXT, TWEET, OR ANY OTHER TYPE OF COMMUNICATION WITH YOUR CUSTOMERS!
• Assume that any telephone conversations with your customers or carrier claims representatives ARE BEING RECORDED While some states prohibit recording of telephone conversations without advising that they are doing so, IT DOESN’T STOP SOME PEOPLE FROM DOING SO. • If you use social media for your business, make sure it is up to date! Do not make any promises that something may or may not have been covered by insurance companies and policies. • DO NOT GIVE ANY STATEMENTS, RECORDED OR OTHERWISE, WITHOUT FIRST CONTACTING YOUR E&O PROVIDER. The Swiss Re Corporate Solutions/Westport Insurance Company/First Specialty Insurance Company claims staff are available if you have any questions about any communications you receive. • If you have a conversation with your customer that leads you to believe that they may be fishing to make a claim against you, DO NOT HESITATE to contact our claims department. • DON’T MAKE CLAIMS DECISIONS! DON’T ADVISE YOUR CUSTOMERS IF SOMETHING IS COVERED NOR NOT! Let the insurance carriers do that. We know this was stated before, but it must be ingrained in your mind. • If the Coronavirus ends up being declared a “catastrophe” by the ISO Property Claims Service, you may be eligible under your Westport policy for “Cat Extra Expense” benefits: “CATASTROPHE EXTRA EXPENSE. We will pay up to $25,000 per catastrophe subject to a per POLICY PERIOD aggregate limit of $50,000 for the actual extra expenses incurred by you as a result of a catastrophe during the POLICY PERIOD beginning on the date of a catastrophe and for thirty (30) days thereafter. The extra expense incurred must be incurred by you only to assist in the insurance claims processing needs of your customer(s) who have been affected by the catastrophe. The catastrophe must be a declared catastrophe by the Property Claims Services. A $500 deductible for each catastrophe shall apply. Limits provided by this paragraph are part of and not in addition to the limits provided by this POLICY.” We hope that this will help you as this event progresses. If you should have any questions, please let us know. This article is intended to be used for general information 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 and liability arising out of or in any way connected to, reliance on or use of any 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. Copyright 2020 Swiss Re
> Swiss RE Corporate Solutions 22
MAY 2020
wisconsin INDEPENDENT AGENT
2020 PRELICENSING IN-CLASSROOM SCHEDULE Since 1993, more than 20,000 students have graduated from our in-classroom prelicensing school. The IIAW in-classroom prelicensing school has some of the highest passing ratios in the state for the last 25+ years! “As an instructor, Gabrielle makes the week go by fast. Her real world examples really help me understand how insurance works and is applied.” -Former Student
IIAW PRELICENSING IN-CLASSROOM CLASSES: • Located at IIAW Headquarters • Fulfills the study requirements for life, health, property and casualty • Designed to help you pass your state licensing examination • Taught by an experienced insurance professional who know the business • Conducted in a comfortable classroom with free parking
LIFE & ACCIDENT/HEALTH May 4-7 June 8-11 July 6-9 August 3-6 September 14-17 October 5-8 November 2-5 November 30 - December 3
DAILY SCHEDULE
PROPERTY & CASUALTY May 18-21 June 22-25 July 20-23 August 17-20 September 21-24 October 19-22 November 9-12 December 7-10
Day 1 (Monday) 8:30 am - 4 pm ($85) Section A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 am - 4 pm ($90) Section B: Life Policies, Terms & Concepts or Section B: Property Policies, Terms & Concepts Day 3 (Wednesday) 8:30 am - 11:30 ($45) Section B: Life Policies, cont. & WI Life Insurance Law or Section B: Property Policies, cont. & WI Property Insurance Law Noon - 4 PM ($45) Section B: Accident & Health Policies, Terms & Concepts or Section B: Casualty Policies, Terms & Concepts Day 4 (Thursday) 8:30 am - 4 pm ($90) Section B: Accident & Health, cont. & WI Health Insurance Law or Section B: Casualty Policies, cont. & WI Casualty Insurance Law
MEET OUR INSTRUCTOR
Gabrielle O’Brien, MBA, has been active in the insurance industry for more than 25 years, developing continuing education classes in related fields such as Ethics and Errors and Omissions. As the lead instructor of the Independent Insurance Agents of Wisconsin’s Property & Casualty and Life & Health Prelicensing Schools, she has guided thousands of students to successfully passing the insurance intermediary’s exam. O’Brien has participated in many other aspects of the industry as an underwriter, manager, and field representative. Gabrielle also teaches tailored made group seminars for completion of the INS 21,22,23 certificate and a variety of seminars and college courses. O’Brien’s received her Master of Business Administration from Loyola University and her Bachelor of Arts from Saint Mary's College.
REGISTER AT IIAW.COM To register, click the Education tab on IIAW.com. For WI exam info, visit Prometric.com. IIAW Member Pricing: $340* Non-Member Pricing $355* Contact Kim@iiaw.com for multi-registration discounts. For any other questions please contact Diana@iiaw.com. The course fee includes all class materials. Materials are distributed on the first day of class. You receive: • Life & Accident/Health or Property & Casualty Insurance Study Manual • The Intermediary’s Guide to Wisconsin Insurance Law • The State of Wisconsin Ins. Licensing Candidate Handbook (This provides all the information to obtain a license) • Exam Simulator - A computer program designed to help you pass your prelicensing exam on the first try *Pricing given for full class registration. You may also take individual classes.
In 1919, A group of Pennsylvania farmers founded Penn National Insurance to provide affordable workers’ compensation insurance. Today, Penn National Insurance sells property-casualty insurance in 11 states by partnering with more than 1,200 independent agency operations. In 2012, we affiliated with Wisconsin-based, Partners Mutual Insurance Company. As one company, we bring the personal attention and local focus of a regional carrier, along with the quality of products and services of national carriers. Interested in partnering with a thriving insurance carrier with superior customer experience? We are looking for select commercial lines-oriented agencies in Wisconsin. Contact: Vicki Lentz 262-432-3420 vlentz@pnat.com
Clayton Zogata 262.432-3422 czogata@pnat.com
• Strong financial performance and A.M. Best Financial Strength Rating of A• Expanded Commercial Lines product and services with competitive pricing and comprehensive coverages to help our agents grow profitably. • Comprehensive Personal Lines product offerings, including Homeowners Equipment Breakdown and additional protection plans. • State-of-the-art quoting, processing and self-service tools, making is easier and faster to meet your customers’ needs. • Local experienced underwriting, claims and management staff
An Equal Employment Opportunity/Affirmative Action Employer ©2020 Penn National Insurance
Policies issued for domiciled businesses and individuals in Wisconsin and Iowa are underwritten under our affiliate, Partners Mutual Insurance Company.
Creating effortless, personal, respectful and responsive customer experiences Who We Are
Partner with us if you are seeking: • A mutual carrier solely focused on agents and policyholders • Local managers who understand your operating territory • Access to an executive management team eager to get to know you • The ability to have merit-based conversations about decisions impacting your agency • Consistency in underwriting approach • A claims team that dependably earns high service marks • A carrier always seeking ways to make the experience better for agents and policyholders Better and stronger together We offer the strength, product portfolio and automation efficiencies of a super-regional-size, 11-state carrier, combined with the agentfocused, customer-first priorities of a mutual company.
In 1919, a Pennsylvania farmer’s association founded Penn National Insurance to provide farm-related workers’ compensation insurance to its members. Today, we do business in 11 states, including a broad variety of business insurance and personal auto and homeowners insurance. And, we changed from an agricultural focus to a service-economy focus. In 2012, we affiliated with Wisconsinbased Partners Mutual Insurance, and continued our tradition of delivering personal attention with a local presence in Wisconsin and Iowa and the regional strength and services of a super-regional carrier. True to our roots, we are still a mutual insurance company, which means we operate for the benefit of our policyholders through providing superior customer service, and bringing innovative products and services to meet the ever-changing needs of the marketplace.
Agents know us as: • Vibrant • Innovative
Diverse array of commercial and personal coverages Penn National Insurance values the relationships we have with our agents as part of the underwriting process and placement of accounts with us. We offer a diverse portfolio of products and services to meet today’s customer needs. In addition to the traditional Commercial and Personal insurance coverages, we offer a wide range of coverage-rich PennPac endorsements. PennPacs provide valuable coverage and limit enhancements on Business Auto, Businessowners, General Liability, Property, Workers’ Compensation and Inland Marine. Some additional endorsements we offer include: Cyber Security Insurance, Monoline Inland Marine, and Manufacturers’ Mechanics’ and Contractors’ Errors and Omissions Liability endorsement. For our Home and Auto policyholders, we offer great coverage at an affordable price, plus many additional coverages you can add at an affordable price that will help you feel secure. For homeowners, we offer Underground Utility, Loss Assessment and Identity Theft coverage. Interested in partnering with a thriving insurance carrier with superior customer experience? We are looking for select commercial lines-oriented agencies in Wisconsin. Contact Vicki Lentz at 262-432-3420, vlentz@pnat.com or Clayton Zogata at 262.432.3422, czogata@pnat.com.
• Resilient • Personable • Bold • Persistent
Policies issued for domiciled businesses and individuals in Wisconsin and Iowa are underwritten under our affiliate, Partners Mutual Insurance Company. Some coverages are not available in all states.
Pictured left to right: Thomas Korber, vice president – Human Resources; Jacquelyn Anderson, senior vice president, CFO/treasurer; Robert Brandon, president; John Foster, senior vice president – Insurance Operations; and Karen Yarrish, esq., senior vice president, secretary & general counsel.
* Penn National’s Exclusive Sponsor Profile was incorrectly printed in April’s issue.
www.PennNationalInsurance.com
wisconsin INDEPENDENT AGENT
MAY 2020
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CONTINUING
EDUCATION IIAW ONLINE EDUCATION & CE CLASSES 2020 DATE MAY 05 06 07 11 12 13 14 18 19 20 20 21
JUNE 04 08 10 11 15 16 17 22 23 24 25
TIME
COURSE
12PM-3PM 8AM-11AM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 8AM-11AM 12PM-3PM 12PM-3PM
Farm Vehicle and Equipment Coverages Additional Insureds and Certificates of Insurance
12PM-3PM 8AM-11AM 12PM-3PM 8AM-11AM 8AM-11AM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM 12PM-3PM
Commercial Property Coverages - Exploring Key Concepts Insuring Toys and Collectibles Contractors Property Exposures Income After Retirement - Where Does the Money Come From? The Insured, Additional Insured vs. Named Insured Debate E&O: Roadmap to Personal Auto and Umbrella Insurance Ethics and Agent Liability Businessowners Policy (BOP)...Planning for the Unexpected Farm Liability Coverages E&O: Commercial Property Coverage Gaps and How to Fill Them Taking Charge of Emerging Homeowner’s Insurance Trends
Personal Lines Checkup - What’s New and What’s Changed...What It All Means
The Dirty Dozen - Twelve Great Commercial Insurance Mysteries Dispelling the Myths of Workers’ Compensation Cyber Liability Protecting Your Most Valuable Asset Condominiums Ethical Dilemmas - Making the Right Choices E&O: Commercial Liability Coverage Gaps and How to Fill Them E&O: Roadmap to Homeowners Insurance Contractual Liability...Separating Fact from Fiction
For more information and to register for these classes, visit https://bit.ly/IIAWContinuingEducation.
QUESTIONS? CONTACT IIAW AT 608-256-4429 OR AT DIANA@IIAW.COM 26
MAY 2020
wisconsin INDEPENDENT AGENT
“This partnership will provide clients access to even greater service offerings.”
News Members in the
RISK MANAGEMENT, LLC JOINS VIZANCE
About Vizance Vizance is a privately-held company that provides risk management, business insurance, employee benefits, personal insurance, and financial service solutions to companies, families and individuals throughout Wisconsin. Vizance has locations in Appleton, Berlin, Fond du Lac, Green Bay, Kenosha, Milwaukee, Oshkosh and Ripon, in addition to its headquarters located at 1320 Walnut Ridge Drive, Hartland, Wisconsin. For more information, visit vizance.com. About Risk Management, LLC Risk Management, LLC specializes in business insurance, personal insurance, and health insurance. The agency is located at 21420 W. Greenfield Avenue, Suite 100, New Berlin, Wisconsin. For more information, visit risk-managementllc.com.
WEST BEND OFFERS SUPPORT FOR COVID-19 RELIEF EFFORTS
New Berlin, WI (4/10/20) — Vizance, a leading independent insurance agency serving Wisconsin, announced today that New Berlin-based Risk Management, LLC joined Vizance on April 1, 2020. Since 2005, Risk Management, LLC has been focusing on offering business insurance, personal insurance, and health insurance. Owners Jim and Carla Hageny and Steve Young will continue with the organization, along with other members of the Risk Management team. “We are elated to join forces with Vizance, which operates with the same values as we do. Our clients will continue to enjoy the same level of unmatched service but with the benefit of additional resources,” said Jim Hageny. Vizance, founded in 1978 and headquartered in Hartland, Wisconsin, is a privately-held independent agency offering a broad portfolio of insurance, risk management, employee benefits, and financial service solutions for businesses and individuals. The agency has been named as one of the area’s “Top Workplaces,” “Fastest Growing Firms,” and “Best Places to Work” by local media sources. Vizance has joined with several other Wisconsin-based independent agencies, including Valley Insurance Associates in 2017, Sparks Insurance in 2018, the Diedrich Agency in 2019, and Hornick Insurance Services in 2020. “Jim and Carla, together with their team, have earned a reputation based on outstanding service and expertise that we are proud to add to the Vizance family,” said Vizance President Jeff Cardenas.
West Bend, WI (4/17/20) - In response to COVID-19, West Bend Mutual Insurance announced efforts to help the greater community while the company gives back to its policyholders, agents and associates. “One of West Bend’s operating principles is ‘We serve our community,’ and during this uncertain time, it was without question that we would extend support to all of the people who are critical to our organization,” said Kevin Steiner, president and CEO of West Bend Mutual Insurance. “We also remain committed to our policyholders and associates and will continually look for additional ways to support them and provide the Silver Lining during this pandemic.” Steiner added the company’s COVID-19 relief efforts for charities, as well as associates, are close to $750,000 in total. Here are some of the ways West Bend is helping communities get through the COVID-19 pandemic: • Policyholders: On April 8 West Bend announced it is sending a one-time payment of $50 to Home and Highway® policyholders to provide some help in these uncertain times. These payments will be processed for those whose vehicles were insured with the company as of March 11, 2020, the date the World Health Organization declared COVID-19 a pandemic. In addition, the company is extending premium due dates for all policyholders impacted by the crisis and automatically provides coverage on personal vehicles used by employees of restaurants that now offer delivery services. wisconsin INDEPENDENT AGENT
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• Agents: West Bend partnered with several independent insurance agencies to support worthy organizations in their communities that help those impacted by the pandemic, such as food pantries, blood centers, and free clinics. If the agency committed to donating $500, West Bend pledged an additional $2,000. West Bend’s donations came from grants made through its Independent Agents’ Fund as part of the company’s Spirit of the Silver Lining Awards. All funds designated for these donations were distributed in early April. • Associates: West Bend’s associates number more than 1,300, all of whom are committed to providing exceptional service to policyholders and agents. As a small gesture of support, West Bend gifted each associate with a $150 bonus to use as a donation to a favorite nonprofit organization or toward restaurant carry-out or patronage of local businesses, both as a reward for their hard work in these trying times and as a way they can show support for businesses and organizations affected by Safer-At-Home orders. • Community: The West Bend Mutual Insurance Charitable Trust is awarding grants to more than 20 nonprofit organizations, many of which provide direct support or relief for the COVID-19 crisis in the community. The two largest donations were awarded to Feeding America and the Red Cross of Southeast Wisconsin, which each received $50,000 to aid their noble pursuits to provide food, shelter and blood to those in need during this very uncertain time.
“We are so grateful to partner with organizations like West Bend Mutual Insurance, who never waver in their commitment to their community,” said Patti Habeck, president and CEO of Feeding America Eastern Wisconsin. “Gifts large and small make a huge impact on those who are in need of hunger relief, especially now as we operate in uncertain times.” ADDITIONAL INFORMATION Organizations such as the Office of the Commissioner of Insurance, the Department of Insurance, and the Department of Commerce in each state have compiled resources that businesses and individuals in those states can refer to for information and/or help. Information is linked on our website COVID-19 Resources. West Bend strives to be a helpful resource to both agents and its policyholders and has compiled any updates regarding relief options on this page, West Bend Response.
News Members in the
Don’t just join a company, join a club. AAA is a membership-based organization; we’re a club, not just a company. This means we have an entirely different level of commitment to customers. All with an unbeatable combination of savings and security for customers. And the potential for success for you.
Learn more, contact me. Leo Plese (630) 328-7076 lmplese@autoclubgroup.aaa.com Insurance • Membership • Travel • Banking AAA Independent Agents are not employees of AAA The Auto Club Group; but, rather are independent contractors. Insurance underwritten by one of the following companies: Auto Club Insurance Association, MemberSelect Insurance Company, Auto Club Group Insurance Company, Auto Club Property-Casualty Insurance Company, Auto Club South Insurance Company, Auto Club Insurance Company of Florida, or non-affiliated insurance companies. ©2019 The Auto Club Group. All rights reserved. 19-IN-0147
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wisconsin INDEPENDENT AGENT
Government Affairs
LEGISLATURE APPROVES COVID-19 RELIEF BILL IN HISTORIC VIRTUAL SESSION The Wisconsin Legislature made history when it convened for the first time ever in a virtual session to address the COVID-19 pandemic. The Assembly met in Extraordinary session and passed Assembly Bill 1038 (AB-1038) on a 97-2 vote. The Senate quickly convened the following day in virtual session and passed the bill unanimously on a 32-0 vote. Within hours, Governor Evers signed the bill into law as 2019 WI Act 185. These are unusual times and the virtual session was an incredibly surreal experience for many of us who have worked in and around the State Capitol. Some legislators voted through a virtual connection from their homes in their legislative districts, while other members voted either from the Assembly chambers or their capitol offices with staff to help them work their computers. Nonetheless, the virtual session ran surprisingly well in both houses considering this was the first time ever in the history of the state Legislature to conduct a virtual session. Governor Evers has already called on the Legislature to pass additional measures and both Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald have since indicated they will likely need to reconvene in order to address the growing budget shortfall as a result of the state taking in drastically less revenues than projected.
and ending 30 days after the termination of the order, is presumed to be caused by the individual’s employment. The bill defines “first responder” to mean an employee of, or volunteer for, an employer that provides firefighting, law enforcement, those providing medical treatment of COVID-19, and who has regular, direct contact with, or is regularly in close proximity to, patients or other members of the public requiring emergency services, within the scope of the individual’s work for the employer. The presumption requires a diagnosis or positive test for COVID-19, the employee must have been exposed to persons with confirmed cases of COVID-19 in the course of employment, and that the presumption may be rebutted by specific evidence that the injury was caused outside of employment.
Tax Conformity for Small Business Loans The bill conforms state law to federal law regarding the tax treatment of paycheck protection program loans to small businesses under the Small Business Administration (SBA) loan guarantee program from February 15, 2020 through June 30, 2020. A portion of the loans may be forgiven on a tax-free basis under certain conditions. IIAW worked with organizations representing small employers, CPAs and lenders as part of a coalition to advocate for language in the bill to ensure small business customers were not inadvertently taxed at the state level for utilizing the federal loan program. Civil Liability Immunity
The COVID-19 Relief Bill that was signed into law includes implications for worker’s compensation insurance, tax conformity on small business loans, and civil immunity for certain health and business sectors, to name a few.
Worker’s Compensation Presumptive Liability For COVID-19 Injuries The bill provides that, for the purposes of worker’s compensation, an injury caused to a “first responder”, during any public health emergency declared by the Governor on March 12, 2020, by executive order 72
The bill also provides liability protections for health care workers, nursing homes, assisted living facilities, charitable organizations, and a limited liability provision for manufacturers that provide supplies and medical equipment in response to the COVID-19 pandemic. Specifically, the bill exempts manufacturer s, distributors and sellers of emergency medical supplies and equipment that donate or sell their product to be exempt from civil liability. Entities would be exempt from civil liability only if the product were sold or donated at a price that does not exceed the cost of production. The bill also creates liability protections for health care professionals acting to address COVID-19 during the public health emergency and 60 days following the end of the emergency order.
>M isha Lee IIAW Lobbyist
wisconsin wisconsin INDEPENDENT AGENT INDEPENDENT AGENT
MAY 2020 MAY 2020
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VIRTUAL UNIVERSITY
UNWRAPPING GREGORY PACKAGING: PROVING NO BUSINESS INCOME COVERAGE FOR COVID-19 CLOSURES Several lawsuits have already been filed across the US attempting to prove the business income policy is triggered by the presence of COVID-19 or the government shutdowns as a result of COVID-19. Many, many more are sure to come.
Because or if property damage was present, this case does nothing to support the plaintiffs’ arguments that the presence of a virus produces property damage. There is no fortuitous event causing physical differences, this is a biological event.
Plaintiffs in these suits argue and will argue that the presence of a virus can and does cause property damage. If such an assertion can be proven, and if there is no exclusion related to viruses, the insurance carrier may be required to pay the business income and/or civil authority loss suffered by the shuttered operations.
Not Buying It
Gregory Packaging, Inc. v. Travelers Property and Casualty Company of America is a favorite precedent put forth by these plaintiffs and their lawyers - and every insurance carrier and defense attorney should be happy when this case appears. Why? Gregory Packaging proves or, at the very least, strongly supports the fact that there is ultimately no business income coverage for COVID-19 business closures. Forget the realities of the business income insuring agreement and the triggers required before the additional coverage civil authority responds, these facts are just “noise” the plaintiffs don’t want to hear or consider. Even in the absence of these facts and realities, Gregory Packaging is the defense attorney’s friend.
Property Damage A review of the Gregory Packaging case reveals the first point of contention between the insured and the insurance carrier – property damage. Gregory Packaging claimed that an explosion caused the ammonia-containing pipe to leak. The insurance carrier asserted that a worker for a contractor turned a nut the wrong way causing the leak. Either way, the piping (the property) was altered in some physical way to cause the leak. And the court opined, “The ammonia discharge was occasioned by a fortuitous event, whether it was an explosion or worker’s error, which produced an actual change in the content of the air in Gregory Packaging’s facility.”. Property damage is generally understood by the court to mean “a distinct, demonstrable, and physical alteration of a property’s structure necessitating repair.” Some courts have defined property damage to mean, “distinct and demonstrable alteration of the insured property.” Whether the pipe exploded before or was damaged after the leak is irrelevant, it required repair and thus property damage was present. Further, Gregory Packaging claimed that the leak made the refrigeration system inoperable necessitating repair. In short, the release damaged the system – which is property damage. The basis for Gregory Packaging’s claim was property damage.
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wisconsin wisconsin INDEPENDENT AGENT INDEPENDENT AGENT
Regardless whether there was or wasn’t property damage preceding or leading to the ammonia release, plaintiff attorneys fighting to find business income coverage hang their hopes on other arguments presented in and decided upon in this case. Most specifically that the presence of ammonia made the building uninhabitable and thus the insured suffered property damage. This assertion does not help their case either. Plaintiff attorneys don’t buy the property damage, or rather lack of property damage, argument presented above, and the insurance policy can’t buy the “polluted air” argument.
The Presence of a Virus Causes Property Damage? Even if the assumption can be made that a virus can cause property damage simply because its presence makes the building uninhabitable, the facts of Gregory Packaging prove there is no business income loss in most COVID-19 cases. Note the court’s reasoning in Gregory, beyond the presence of actual property damage, “the ammoniainduced incapacitation constituted ‘direct physical loss of or damage to’ Gregory Packaging’s facility.” “Ammonia-induced incapacitation” is the key phrase. The building was deemed damaged only while the ammonia levels were dangerous to life and health – the period of the ammonia-induced incapacitation. Once the danger from the ammonia was gone, there was no more “damage” as defined by this court. If the presence of the COVID-19 virus can cause property damage, by application of Gregory Packaging the damage only exists for the time period the virus is viable (dangerous). Once the danger (such as it is) is gone, there is no longer damage. Two ways to remedy the dangers created by the presence of the coronavirus: 1) clean the property with disinfectants; or 2) wait for the virus to die. Once the surface is cleaned and disinfected, or the virus ceases to be dangerous there is no longer damage as defined by this case. Cleaning can be done in a day or less. If the surface is not cleaned, how long will the virus live? A recent 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 three days – which is 72 hours. Most surfaces see the virus dying within 24 hours. (As a sidebar, the same study asserted the virus lives in the air only three to four hours.)
Most business income polices have a 72-hour waiting period before the period of restoration and business income payments begins. This same 72-hour period applies to civil authority claims.
Beyond Gregory Packaging, which obviously doesn’t help the plaintiff attorneys as much as they hoped or thought, several other cases also prove the lack of business income coverage in COVID-19 situations:
Even if the virus can be said to cause property damage, the damage ends when the surface is cleaned or the virus dies. Rarely will business income payment ever be triggered because of the waiting period.
• Mama Jo’s, Inc. v. Sparta Ins. Co.: A restaurant did not sustain direct physical loss when dust and debris from nearby roadwork could be remediated by cleaning; • Universal Image Prods. v. Chubb Corp.: Mold which could be removed by cleaning was not physical damage as it did not alter or otherwise affect the structural integrity of the building’s siding; • Great N. Ins. Co. v. Benjamin Franklin Fed. Sav. & Loan Ass’n: Asbestos contamination was not a physical loss as the building remained unchanged.
Yes, the waiting period can be reduced by endorsement, but even if the time was reduced to 0 hours (if the underwriter could be convinced to do that), the business income payments would be limited to the point in time when the property is cleaned or the virus dies, the same day or within three days. If plaintiff attorneys want to depend on Gregory Packaging to say that the presence of a virus triggers property damage and thus business income coverage, that’s fine. They just need to remember how long (or short) the period of “damage” really is.
Prove the Building is Unsafe or Unusable Court documents state, “Beyond the parties’ apparent agreement that the ammonia rendered the building temporarily unfit for occupancy and use, Gregory Packaging has put forth substantial evidence that the ammonia discharge physically incapacitated its facility. Multiple witnesses have testified that the facility was evacuated after the ammonia release because it was unsafe.” In addition to the plaintiff attorney’s problems with the short life of the virus even in the absence of cleaning, they must PROVE the virus was in the building so that property damage could result. In Gregory Packaging there was NO question that ammonia was present; but can it be proven that the virus existed in the building creating property damage? Not likely unless testing was immediate. This same requirement applies for civil authority claims. Any argument that the virus caused damage can be considered legitimate only if there is proof the building surfaces of surrounding buildings were contaminated by the virus. Proving any building is unsafe or unusable will be or is nearly impossible. In light of the business shutdowns in 42 states, any virus that did or might have existed in these buildings is long dead – if the building wasn’t cleaned. Unless proof can be provided that the virus exists within the building, there is NO proof of damage. Also, Gregory Packaging and cases like it require the building to be unusable for “damage” to exist. “Unusable” is not a function of the civil authorities (as that is excluded and then granted coverage under certain circumstances), it is a function of inhabitability. If there is no damage, there is no coverage. One of, if not the first, business income suit involved a restaurant in New Orleans. Remember that even the civil authorities are allowing the restaurants to operate, the only difference is customers can’t stay. The building is not unusable nor is it considered unsafe – it’s the people who are supposedly unsafe.
Thank You Gregory Packaging Gregory Packaging should be used in every COVID-19 case – by the defense. This case supports the policy and the reality that there is no business income loss resulting from COVID-19. Every defense attorney should hope the plaintiff attorney references it.
Finally, But Most Importantly Business income is a secondary coverage meaning that it covers the indirect loss (the loss of income) resulting from or arising out of a direct loss – property damage. No insured can have a “stand-alone” business income loss, a business income loss is dependent upon there first being direct property damage. Gregory Packaging focused on proving direct property damage to force Travelers to pay: 1) The cost to repair the ammonia piping system; 2) the cost to repair the refrigeration system; 3) the cost to clean all traces of ammonia from the building and all surfaces; and 4) any loss of income that resulted from the delayed opening. Everything was dependent on there being a direct property loss With COVID-19, every business income claim requires there be direct property damage. Without direct property damage, there is no business income loss. The same principle applies to civil authority losses, but civil authority losses are excluded from COVID-19 claims for a different set of reasons (not the focus of this article). If it can be proven that the coronavirus does cause property damage at the described premises, the insured is required to make and prove a property damage claim BEFORE a business income claim is triggered. In proving a direct property loss, the insured is required to comply with all policy conditions which includes: • Giving the insurance carrier a description of the property involved; • Providing a description of how, when a where the loss or damage occurred; • Protecting the covered property from further damage (which means cleaning it in the case of a virus); • Providing an inventory of all damaged and undamaged goods when requested by the insurance carrier; • Allowing the insurance carrier to take samples of the damaged property for inspection, testing and analysis • Providing a signed, sworn proof of loss containing the information requested to investigate the claim; • Cooperating with the insurance carrier in the investigation or settlement of the claim; and • Repairing or replacing the damaged property as soon as reasonably possible when replacement cost is sought. • This means cleaning the “damaged” property. These are conditions subsequent. If the insured does not comply, it has violated the contract. And if “damage” no longer exists, the business income coverage is no longer triggered. As much empathy as society has for the individuals who have suffered greatly from this pandemic, the industry is forced to and must follow the insurance contract. Given the facts as they are understood there is no coverage for COVID-19 business income losses; even the most popular case being held out as proof does nothing but prove the lack of or a severely limited amount of coverage. This is biological not physical.
>C hris Boggs
Big “I” Virtual University Executive Director
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COMMENTARY FROM COUNSEL
WISCONSIN COVID-19 LAW MODIFIES UNEMPLOYMENT LAW As you are surely aware, on April 2020, 2019 Wisconsin Act 185 (“Act 185”) was signed into law amidst the ongoing COVID-19 pandemic. The purpose of Act 185 is to provide widespread relief to persons and businesses impacted by COVID-19 and the economic destruction caused by it. Among its various provisions, Act 185 contains two provisions at the intersection of employment and insurance law that may be particularly impactful to IIAW members and their clients. First, it expands the state’s Work Share Program. Second, it eliminates charges to employer Unemployment Insurance (“UI”) accounts for paid UI claims caused by the COVID-19 pandemic. Expansion of Work Share Program The Wisconsin Work Share Program has long provided a mechanism through which employers could avoid layoffs during temporary economic downturns. At its most basic, the Work Share Program allows employers to reduce employees’ hours (rather than engage in layoffs) by allowing the affected employees to apply for partial UI benefits to replace a portion of their reduced pay. Despite its outward appeal, the Work Share Program has not traditionally been popular amongst employers due to a variety of restrictions, limitations, and administrative hassles. Act 185 sets out to temporarily eliminate or drastically reduce these restrictions and burdens to encourage employers to utilize the Work Share Program for COVID-19 related work reductions. It does so in three primary ways. First, Act 185 greatly reduces the number of employees that must be affected before an employer can qualify for the Work Share Program. Previously, an employer could only apply for the Workshare Program if a proposed reduction affected at least 20 employees or 10% of a particular “work unit.” Act 185 allows employers to qualify with only two affected employees regardless of “work unit.” In other words, the proposed reduction need only affect two employees in the business. Second, Act 185 allow employers greater latitude in their reduction of hours. Previously, an employer could only reduce employees’ hours by 10-50% to qualify for the Work Share Program. Further, the reduction in hours had to be apportioned evenly amongst all of the employees in the Work Share Program. In recognition of the severity of the COVID-19 economic downturn, Act 185 extends the reduction percentage by 10%, allowing employers to reduce hours by up to 60% and still qualify for the Work Share Program. In addition, it removes the apportionment requirement. Third, Act 185 simplifies and expedites the application process. Before qualifying for the Work Share Program, an employer must apply with the Wisconsin Department of Workforce Development (“DWD”) and be approved. Act 185 makes the application process easier by mandating a statewide, online platform for applications. In addition, it expedites the process by requiring that DWD approved Work Share Programs become effective within one week of approval, where it previously was two. In addition to the flexibility afforded employers who wish to keep their employees but simply cannot do so on a full-time basis, Act 185 works in conjunction with other COVID-19-related federal and 32 32
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state legislation to provide employees with additional benefits. These benefits include: • Employees in the Work Share Program are entitled to employer-provided benefits; • Unlike regular partial UI benefits, employees whose weekly pay exceeds $500 or are salaried can participate in the Work Share Program; • Employees in the Work Share Program are entitled to an additional $600 per week through July 31, 2020 under the CARES Act, because the additional CARES Act money is available to any person receiving state UI benefits, including under a work share program. Given the benefits to employees and decreased burdens to employers, IIAW members and their clients may more strongly consider participating in the Work Share Program than previously. Employer UI Accounts Will Not Be Charged for COVID-19 UI Claims Act 185 also provides relief to employers by creating a moratorium on charges to employer UI accounts for COVID-19-related UI claims. Under Act 185, instead of an employer’s UI account being charged for paid UI claims, the state’s balancing account will be charged. This moratorium is effective for UI claims paid for weeks beginning March 12, 2020 and ending December 31, 2020. There are two important limitations on this benefit. First, only COVID-19-related UI claims qualify. Therefore, the state must first determine whether a particular claim is COVID-19 related. Second, and relatedly, the employer must timely provide claim-related information to the DWD so that the DWD can make the above determination Conclusion Act 185 was passed to assist both individuals and businesses with some of the hardships caused by COVID-19, including economic hardships. The two provisions outlined in this article create effective tools to do that, subject to their particular limitations. IIAW members and their clients should not hesitate to take advantage of them if it could provide relief during the downturn. If you would like additional information on the tools available to employers during the COVID-19 crisis, please visit the Covid-19 Resource Center on my firm’s website, www.gklaw.com, or reach out to me or the IIAW directly.
>J osh Johanningmeier IIAW General Counsel
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COVID-19: ARE THERE ANY WEIRD HOMEOWNERS’ COVERAGE EXPOSURES? Currently 42 states are under a “stay-at-home” or some other similar order. However, this does not necessarily keep people in their homes. People leave their homes for necessities (healthcare, medicine, groceries, take-out orders, etc.) or to exercise. Some work in businesses that have become known as “essential” and are going to work every day. Still others are going outside to visit and/or check on friends and neighbors. But some are even going inside each other’s homes. There are reports that parties, albeit small, are being held. This leads to the question: Does having friends over during a state-mandated stay-at-home order create any insurance issues regarding COVID-19? What about when it’s over? These sound like weird questions.
There are far more nuances and legalities than the above ultimately establish legal liability, but detailing legal liability is not the focus of this article. For more information on what is required to prove legal liability see, “How Does a ‘Person’ Become Legally Liable.”
As weird as the questions sounds, the answer may be weirder. If the insured is held legally liable for someone contracting COVID-19, or any other disease, while at a house party, there may not be any coverage extended from the homeowners’ policy.
Proving negligent conduct and legal liability often requires court involvement. If: • An insured hosts a party during a lockdown • An insured is contagious; and • A guest is sickened by that insured The communicable disease exclusion somewhat clearly excludes more than just coverage, it also excludes defense.
Don’t believe me? Here is the relevant policy language:
A Different Situation. A Different Result?
SECTION II - EXCLUSIONS
Let’s change the situation. Assume a guest at the party rather than an insured is sick and passes along the little nasty; does this exclusion apply to the homeowner/host?
E. COVERAGE E - PERSONAL LIABILITY AND COVERAGE F MEDICAL PAYMENTS TO OTHERS Coverages E and F do not apply to the following: 6. Communicable Disease
If the policy is taken literally, which is the expectation, the exclusion does not apply. Notice again that the exclusion applies only when an insured communicates the disease to someone, not when their actions make it possible for the disease to be communicated by and to someone else.
A Communicable Disease?
So, the infected and contagious next-door neighbor is invited. During the party she spreads the virus to the other party guests. One gets sick and sues the homeowner. Is the homeowner covered for this suit? Yes, this appears to be covered because an insured did not communicate the disease; they only made it possible for the disease to be spread.
COVID-19 is unquestionably communicable; but is it a disease? In a roundabout way, yes. It’s not the virus that causes harm. It’s the disease or sickness that results from the virus. The immune system destroys some viruses before they can cause any harm, but some viruses overpower the immune system and lead to sickness and disease.
But just like in the previous example, the injured party must prove the homeowner/host was guilty of negligent conduct and is legally liable. In this case, the legal precept proximate cause (the “but for” requirement) seems to indicate that, “But for the insured hosting the party, there would not have been bodily injury.”
Because COVID-19 is a communicable disease, if the insured “communicates” the disease to someone else, the exclusion applies.
Even if the homeowner is not found or held to be legally liable for the sickness, the policy pays to defend the insured because this is not an excluded incident.
“Bodily injury” or “property damage” which arises out of the transmission of a communicable disease by an “insured”
Legally Liable If the insured throws a “stuck-in-the-house” party or other gathering and about 14 days later one of the guests is diagnosed with COVID-19, the natural inclination would be to assume the disease was contracted at the party. Once the lawyers begin trolling, the ill person will certainly be convinced to sue the party host asserting that: • The host made them sick (read the exclusion, remember, an insured must spread the disease); and • The homeowner was negligent in and legally, liable for causing the sickness. To be found negligent in the process of ultimately proving legal liability, the injured person must: • Prove the accused homeowner is guilty of “Negligent Conduct.” 35
To prove negligent conduct, the injured person must prove the homeowner owed a duty to the injured party and breached that duty owed; • Suffer actual monetary damages; and • Prove the wrongdoer’s “Negligent Conduct” is the proximate cause of the injury or damage.
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What About the Neighbor? Is she covered for making the other guest sick? No, there is no coverage. This points directly back to the applicable exclusionary wording. A liability exclusion is not limited to the insured’s premises. If the insured communicates the disease to another person - even at a party - the exclusion applies. Parties or No Parties Homeowners’ coverage, or the lack thereof, for spreading COVID-19 isn’t a weird question. Depending on the situation, coverage may be excluded for the insured. Don’t host or attend parties for a while.
>C hris Boggs
wisconsin Big “I” Virtual University Executive Director35 INDEPENDENT AGENT MAY 2020
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