march 2015 wi independent agent

wisconsinINDEPENDENT AGENT

MARCH 2015

A KEY PIECE OF YOUR BUSINESS PROTECTION

THE IIAW PROFESSIONAL LIABILITY PROGRAM SEE PAGE 5

West Bend. Insurance your customers buy when they cant a!ord anything less.

Your customers business didnt grow overnight. It came from years of hard work, confidence in what they could do, and making smart decisions.

!ats why an insurance policy from West Bend makes sense. It protects these valuable and hard-earned businesses so your customers can focus on doing what

they do best: making sure their clients look and feel their best.

And as an Official Supplier of !e Silver Lining, its backed by your knowledge and experience.

People who run a business know. !e most valuable things

are also the hardest to get.

MARCH 2015 | 3 WISCONSIN INDEPENDENT AGENT

Independent Insurance Agents of Wisconsin725 John Nolen Drive, Madison, Wisconsin 53713

Phone: (608) 256-4429 or (800) 362-7441 ! Fax: (608) 256-0170 ! Web: www.iiaw.com

Executive Vice President - Matt Banaszynski

MARCH 2015Eric Schwartz, Editor

> OUR ADVERTISERSAAA ................................................................ 34

ACUITY Insurance ........................................... 35

Amerisafe....................................................... 20

Applied Underwriters ........................Back Cover

Badger Mutual ................................................. 31

Burns & Wilcox ................................................. 6

Erickson-Larsen, Inc. ....................................... 16

Guard Insurance ............................................. 26

IIAW Continuing Education ............................. 32

Insurance Associates of America .................... 14

JM Wilson ....................................................... 22

Northern Underwriting Managers .................. 10

Pekin Insurance .............................................. 29

Robertson Ryan............................................... 13

SECURA Insurance ............................................11

Swiss Re E&O Program .......................... 9, 21, 33

The IMT Group .................................................. 7

West Bend ........................................................ 2

Western National .............................................. 4

Wilson Mutual .................................................. 31

Open Door Policy The IIAW Provides A Comprehensive E&O Program . . . . . . . . . . . . . . . . . .5

Professional Development Six Competencies Of A High Level Executive Assistant . . . . . . . . . . . . . . .8

Virtual University A New Twist In The Evolution Of Carpooling . . . . . . . . . . . . . . . . . . . . . . . 12

Government Affairs IIAW Government Affairs Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Errors & Omissions E&O And The ACA: Increase Your Knowledge & Know Your Limits . . . . 16

Member Profile Austin Mutual & Main Street America: Building A Strong Business And Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 18

IIAW Staff Meggen Gagas Joins The Staff Of The IIAW . . . . . . . . . . . . . . . . . . . . . . . .23

Members In The News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Commentary From Counsel Who Let The Dogs Out? Clarifying The Dog Bite Statute . . . . . . . . . . . . 28

Technology Make It Harder To Crack Your Pin & Password . . . . . . . . . . . . . . . . . . . . 30

2014-2015 Executive Committee

President .................................................... John Wickhem P.O. Box 1500, Janesville, 53547-15

President-elect ................................................ Steve Leitch P.O. Box 85, River Falls, WI 54022

Secretary-Treasurer ....................................... Matt Weimer 100 North Corporate Drive #100, Brookfield, WI 53045

Chairman of the Board ................................ Dave Dunker P.O. Box 443, Brookfield, WI 53008-0443

State National Director ................................Linda Steiner 555 Main Street #320, Racine, WI 53403

2014-2015 Board of Directors

Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704

Mark Behrens 555 Main Street #320, Racine, WI 53403

Jason Bott 330 East Kilbourn Avenue, Milwaukee, WI 53202

Gerald Couri 379 West Main Street, Waukesha, WI 53186

Mike Farrell 1300 S. Green Bay Rd., Racine, WI 53406

Chris Hanson 5601 Grande Market Drive, Appleton, WI 54913

Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583

Brian McClone 505 North Westfield Street, Oshkosh, WI 54902

Jeff Rasmussen 525 Junction Road, Madison, WI 53717

Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701

2014-2015 Committee Chairs

Agency Operations ....................................... Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406

Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949

Emerging Leaders ...................................... Janelle Higgins 6200 Mineral Point Road, Madison, WI 53705-4504

Employee Benefits ............................................. Tim Bever 555 Main St. #320, Racine, WI 53403

Finance & Compensation ............................ Matt Weimer 100 North Corporate Drive #100, Brookfield, WI 53045

Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

Industry Relations ....................................... Kevin Murray 525 Junction Road, Madison, WI 53717

Marketing & Membership Development ........... Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610

Smaller Agencies ....................................Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

Technical ...................................................Mark Truyman P.O. Box 6 , Seymour, WI 54165

wisconsinINDEPENDENT AGENT

On The Cover

As an IIAW member, E&O coverage

is an important piece of your

membership benefits. We are proud

of our partnership with Swiss Re

Corporate Solutions and the A+

Superior rated product the company

provides. Its the best in the

business. For more about the our

E&O programs features, please see

Matt Banaszynskis article on page

5. For a members perspective, read

Skip Hansens testimonial on page

21. Have a great month...spring is

right around the corner!

4 | NOVEMBER 2014 WISCONSIN INDEPENDENT AGENT


MORE THAN JUST A POLICY: THE IIAW PROVIDES A COMPREHENSIVE E&O PROGRAM

OPEN DOOR POLICY

Underwritten by Westport Insurance Corp., a member of Swiss Re Corporate Solutions, the program is rated A+ Superior by A.M. Best, and has grown into the largest and most stable E&O program in the nation. Our members rely on this stability and long-term market to protect their greatest assets their businesses.

Our professional liability program is not just a policy its a comprehensive program for agents. Our policyholders have many program features at their disposal such as:

DPremium reduction options.

DAsk an Expert - Experts who can usually answer, or find an answer, to your questions.

DE&O Happens - Website (iiaba.net/eohappens) dedicated to E&O risk management for insurance agencies. The website contains claim frequency data, real-life case studies, sample client letters, sample agency procedures and podcasts on important E&O topics.

DClaims Frequency Data - Understanding what drives E&O claims can provide direction in areas within the agencys operation to focus risk management efforts.

DCommon Errors Alleged - Knowing the common E&O claims can point your agency in the right direction of knowing how to proactively avoid them.

DCommon Problems - To truly eliminate E&O exposure its necessary to understand the root cause of E&O losses and implement change at that level. In general, E&O losses occur because of inadequate training and education, poor risk identification and analysis, lack of uniform practices and procedures, inappropriate organizational structure, lack of compliance with office practices and procedures, time constraints and/or chronic backlog.

DE&O Case Studies - Real-life case studies provide the good, the bad, and the ugly of E&O claims made against agents and provide an excellent learning tools for agency staff to keep E&O claims prevention at the forefront of their minds.

DStandard of Care - Do agents have a duty to advise? Knowing your legal duties as an insurance agent is critically important. A professionally run

For over 25 years, the IIAW Professional Liability Program has been the premiere E&O insurance choice for independent insurance agents and brokers. As an IIAW member, professional liability coverage is just one of your exceptional member benefits. Designed by agents for agents, our E&O Program is administered locally by our expert staff here at the IIAW.

> Matt Banaszynski is the Executive Vice President of the Independent Insurance Agents of Wisconsin. Contact him at [email protected].

agency with knowledgeable staff, proactively working with customers to put themselves in a position of having less exposure to E&O claims.

DPrevention Tools - Resources for Agency Management.

DAgency E&O Self-Assessment.

DCoverage Checklists.

DDisclaimers.

DFile Documentation & Records Retention - You can reduce your E&O deductible up to 50% by documentation! Whether your agency operates in a totally automated environment, is still paper-based, or exists anywhere in between, file documentation is rule number one when it comes to protecting against errors and omissions losses. Resources are available to help your agency develop procedures for file documentation including SwissRe/Westports timeline guide for document retention.

DSample Procedures Manual - Sample procedures your agency can use to get started in developing a customized procedures manual.

DTips to avoid the most common E&O exposure.

DSample Customer Form Letters - Audits, cancellation, claims, acknowledgement of coverage rejection.

DVirtual Risk Consultant (partnered with Rough Notes) - Subscription provides you access to risk evaluation tools including over 700 specific risks and exposure analysis, customized questionnaires, codes and checklists.

DSwiss Res claims department includes a highly rated attorney experienced in handling agency E&O claims.

In addition, agents who attend seminars and E&O classes receive a 10% credit on their premium and, according to studies, have fewer claims and perform better.

Another very important and often overlooked reason to place your E&O with the IIAW is how we reinvest commission earned from the sale of policies. We return commission earned to our members in the form of industry leading products and services. Without the revenue generated from E&O and cyber liability insurance products, the IIAW would not be able to meet the evolving needs of our members. We keep our finger on the pulse of regulators, legislators and policy so you dont have to.

Currently, the governor included a proposal in his budget that would eliminate the Local Government Property Insurance Fund (LGPIF). We have been advocating for this measure for a long time. The fund, which is the largest of its kind in the country, insures roughly 1,000 properties valued at around $50 billion dollars. Currently, rates in the fund (which lack adequate underwriting) are 40-50% CONTINUED ON PAGE 7

6 | MARCH 2015 WISCONSIN INDEPENDENT AGENT

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Commercial | Professional | Personal | Brokerage | Binding | Risk Management Services

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Minneapolis, Minnesota | 612.564.1880toll free 800.328.1693 | fax 612.564.1881minneapolis.burnsandwilcox.com


below market, essentially pricing independent agents and the companies they write for out of the market. The fund has experienced a negative net income five out of the last six years and had a loss ratio of 165%. Those familiar with the LGPIF know that the problems mentioned do not even begin the scratch the surface.

Here are your premium dollars working for you in more ways than one. We are leading the charge to eliminate the LGPIF and give independent agents the opportunity to write business that previously was virtually untouchable. The elimination of this fund could mean millions of dollars in increased revenue for independent insurance agents across Wisconsin. This is just one illustration of how we are constantly advocating for you in the halls of the Capitol.

Agency perpetuation is another way we are working diligently on your behalf. Whether its by offering legal services, perpetuation guides, high school and college curriculums preparing and introducing students to careers in insurance, training and onboarding programs for new producers

and CSRs, or forming a strategic partnership with UW-Madison to educate current and future managers and agency owners to be better business leaders, we are leading our agencies into the future.

When you purchase your E&O or cyber liability insurance through the IIAW, you can trust that youre receiving a good return on your investment.

Remember, we work for you and are here to serve. If you already purchase your E&O insurance through us, thank you. Now go forth and use all the industry leading products and services at your disposal. I am sure you will be impressed.

If you currently have your E&O insurance with another carrier, please give us a shot. Get a fast quote. It will only take you a few minutes. It may save you some money, gain you access to tools and resources to help your agency grow and be successful, and youll be supporting historical efforts to strengthen independent insurance agencies and our industry in Wisconsin.

MORE THAN JUST A POLICY: THE IIAW PROVIDES A COMPREHENSIVE E&O PROGRAM

OPEN DOOR POLICY

CONTINUED FROM PAGE 5

I recently read that the U.S. Department of Labor estimates the average cost of a bad-hiring decision can equal 30% of the individuals first-year earnings. For example, an employee making $60,000 annually can potentially cost an employer $18,000. A comment on CareerBuilder indicated that forty-one percent of companies estimate that a bad hire costs more than $25,000, and one in four said it costs more than $50,000. Having a high level competent assistant can help to avoid these pitfalls. Outlined below are six key competencies that define a high level assistant:

1. Effective with Strategic Acumen: To have an outstanding assistant is to have one who saves the executive hours doing tasks that the assistant can handle. That person will save you time, money and increase your profitability. In order to be highly effective the executive assistant has to be able to manage the scheduling of multiple calendars, meetings, details and logistics, and travel arrangements while maintaining open communication with

employees, customers, vendors and visitors. They are polished, poised and polite. They understand the companys vision and goals and have the ability to keep the executive apprised of the daily happenings in his business. They have intuitive insight to create a well-honed partnership. The role of the assistant should appear seamless to everyone in the office.

2. Managing Up with Intellectual Insight: This is the assistant who has their pulse on the company. They are the barometer that senses things before they occur, diffuses tension, creates synergy within a diverse culture of personalities and mindsets, and is able to connect to the human side by acknowledging with empathy. They know the expectations and meet critical deadlines, and are able to present different points of view within acceptable parameters. They are the filter for the CEO and the ambassador at large. The executive assistant is the calm in the storm, has the ability to avert conflicts and energize employees with a positive attitude. Face-to-face interaction with others is key to creating cohesiveness within a company.

3. Intuitive and Proactive: To be intuitive is to sense whats coming down the pike

before it happens. Knowing what to expect and taking the approach to act rather than react shows the true skill of a high level assistant. When you can ease into a surprise rather than scramble, the waters remain a lot calmer for everyone involved. When the assistant can diffuse a lot of the unknowns, a bond of trust and reliability begin to form creating a well-oiled machine where two people work as one.

4. Key Business Partner: The high level assistant is well versed in multiple areas. For example, they act as the intermediary for the executive by grooming, creating and cleaning up

correspondence on the executives behalf. The high level assistant fences phone calls, is the sounding board for difficult situations that need to be dealt with and looks into technology issues when necessary. This role may also include acting as proxy in meetings whereby freeing up the leaders time to handle the organizations strategic goals.

5. Indispensable Team Player: To be able to build bridges between departments is another strength the high level assistant brings to the table. They know how to respond in a diplomatic way without creating dissention or disgruntled customers. The executive assistant is respected for understanding the importance of confidentiality and adhering to it. They remain subtle as the eyes and ears of the company to diffuse misunderstandings or conflicts that may arise. An indispensable assistant is loyal and knows how to create synergy.

6. Strong Communicator: The high level assistant is able to bring one voice to a document that has many authors. They represent the group by bringing clear, concise, accurate and intelligent information together for viewing. They will ask questions for clarification and give feedback if there are serious concerns on what is being communicated. The executive assistant is the sounding board for the voices behind the document. This role also includes acting as a liaison within the company, working at some capacity within each department, and keeping the lines of communication open. Now that you know the competencies of a high level assistant, how do you find that person? To learn more, please go to kathypaulsonconsulting.com.

SIX COMPETENCIES OF A HIGH LEVEL EXECUTIVE ASSISTANTIn my last article on professionalism, one of the topics I spoke on was competency. We know that leaders are confident, well versed, trusted and respected. We also know or should know that leaders require a colleague and partner with similar tendencies that represent him or her and the company. That person is a high level assistant that has the ability to free up time for the executive to do his job - and do it well.

> Kathy Paulson is the founder of The Assistants Coach. She is leading a session at the 2015 IIAW Annual Convention. Contact Kathy at [email protected], and 608.220.6918.

PROFESSIONAL DEVELOPMENT


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MARCH 2015 | 1 1 WISCONSIN INDEPENDENT AGENT

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A NEW TWIST IN THE EVOLUTION OF CARPOOLINGThe U.S. has seen an explosion in what is often referred to as the emerging sharing economy or

collaborative consumption. In an increasingly connected society where most people have access

to mobile communication devices, peer-to-peer services are springing up, based on mobile apps that

consumers can use to access transportation services that historically have either not existed or were

controlled by often highly regulated business or government entities.

VIRTUAL UNIVERSITY

The Virtual University is a Big I members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent.com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.

One might argue that this is not a new concept, given

that hitchhiking has been around since not long after the wheel was invented and was quite common in the 1950s and 1960s until it fell out of vogue as its inherent dangers gained more attention from the media and increasing numbers of consumers owned or had access to automobiles or mass transit.

But what were witnessing today is a relatively new phenomenon. Uber, Zimride, Lyft, ZipCar, RelayRides, GetAround, TaskRabbit, JollyWheels, RentMyCar, Zilok, CityCarShare, bla, bla, bla, bla, bla...

Which brings us to the latest incarnation of car sharing that has emerged in Europe, BlaBlaCar (blablacar.com). Founded in France in 2006, and featured in a recent Wall Street Journal article, BlaBlaCar now claims to operate in about a dozen European countries and is exploring expanding into other regions such as India and Brazil. BlaBlaCar bills itself as a ride sharing mechanism, as opposed to car sharing, falling somewhere between fee-based hitchhiking

and a somewhat irregular share-the-expense carpooling arrangement. Details on how their system operates can be found at their website.

BlaBlaCar currently does not operate in the U.S. There is some question as to whether they can be as successful here as they claim to be in Europe. Owning and operating a vehicle in Europe is far more costly than it is here in the U.S. There is also a perception that Europeans may be more trusting of, or accustomed to, riding with strangers than Americans are. In addition, there are social issues to consider in

the U.S. For example, a driver can refuse to transport particular passengers. If such a driver is white and a declined passenger applicant is black, would there be civil rights issues that could be addressed by claims or suits for discrimination?

The question addressed by this article is, if BlaBlaCar were to begin operations in the U.S., would the personal auto insurance policies of their drivers cover this type of activity? According to the terms and conditions area of BlaBlaCars website and media articles about their service, most auto insurance in Europe covers this exposure because there is no profit involved. They refer to the passenger fee as a cost contribution and claim to ensure that drivers do not make a profit but rather share the cost of a trip with the passenger(s). Their terms and conditions include a stringent hold harmless provision and a liability cap to protect BlaBlaCar.

However, their position on how personal auto insurance responds in Europe would be immaterial if they were to commence operations here in the U.S. Many, if not most,

personal auto policies in the U.S. may exclude this activity regardless of whether a profit is sought or made. This could depend on the facts of each situation and the exclusion

Many, if not most, personal auto policies in the U.S. may exclude this activity regardless of whether a profit is sought or made.


VIRTUAL UNIVERSITY

wording in the policy. The first question is whether there can be assurance that a driver is not making a profit. Second, the policy language may not consider profit to be an issue. For example, these are the two most common exclusions found in most U.S. personal auto policies:

We do not provide Liability Coverage for any

insured...For that insureds liability arising out

of the ownership or operation of a vehicle while it

is being used as a public or livery conveyance. This

Exclusion (A.5.) does not apply to a share-the-expense

car pool.

We do not provide Liability Coverage for any person...

For that persons liability arising out of the ownership

or operation of a vehicle while it is being used to carry

persons or property for a fee. This exclusion (A.5.)

does not apply to a share-the-expense car pool.

This language is taken from two different

edition dates of the ISO-standard Personal Auto Policy. In the case of use as a public or livery conveyance, ISOs filing memorandum stated that the intent of this exclusion is to preclude coverage for vehicles available for hire to the general public for the transportation of people or cargo (e.g., taxis, sightseeing vans, package delivery services, etc.). The exclusion is not contingent on the profitability of the person or enterprise holding their vehicle out to the general public for hire.

In the case of a vehicle used to carry persons or property for a fee, there is no mention whatsoever of whether this fee generates a profit for the owner/driver. In one case, this exclusion was held to apply to someone who used his pickup truck to transport a friends sons belongings to college in exchange for gas money.

However, both exclusions admittedly exempt a share-the-expense carpool. So what is meant by a carpool? One dictionary definition describes it as:

...an arrangement between people to make a

regular journey in a single vehicle, typically

with each person taking turns to drive the others.

Note the reference to regular and alternating as drivers. On the other hand, Wikipedias discussion of the term carpool implies a potentially broader concept that could include how BlaBlaCar operates. This

muddies the water to the point that no blanket statement can be made about how U.S. personal auto policies might respond to claims arising from BlaBlaCar and similar ride sharing services. If this were to become a significant exposure, one might expect U.S. insurers to define carpool in a way that precludes coverage for these services.

In the past year or two, we have seen various forms of car sharing exclusionary endorsements introduced by ISO and individual insurers, though many of them still do not fully address the share-the-expense carpool situation. The only conclusion we can reach at this point is that how a vehicle is being used and how that use fits with an insurance policys insuring agreements and exclusions are becoming much more important and more difficult to determine.

The insurance industry is not known for either its innovation or its ability to respond quickly to emerging social changes. The usual reaction is to exclude an unanticipated exposure until such time that the industry can reasonably measure and predict the risk of loss. The growth of car and ride sharing (not to mention home sharing) is something that will need to be closely monitored by the industry.

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The only conclusion we can reach at this point is that how a vehicle is being used and how that use fits with an insurance policys insuring agreements and exclusions are becoming much more important and more difficult to determine.

> Bill Wilson is Director of the Virtual University of the IIABA. Contact Bill at [email protected].

When you become a part of the Insurance Associates of America family, your agency keeps its unique style, familiar identity, and personalized customer service.

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Closure of the Local Government Property Insurance Fund (LGPIF)Governor Walker in his $68 billion biennial state budget has recommended closure of the Local Government Property Insurance Fund (LGPIF) to allow the private insurance

market through agents and carriers to insure these risks. The IIAW strongly supports the governors recommendation and is pleased to champion this effort on behalf of our agent members. Your government affairs team in Madison is working closely with leaders in the state legislature and members of the Joint Finance Committee to ensure passage of this provision. The LGPIF is the largest public sector property insurance fund in the nation insuring nearly $52 billion in property owned by 982 public entities that include 69 counties, 128 cities, 161 towns, 242 villages, 252 school districts, and 130 other governmental entities. The fund was created many years ago to ensure those local governmental units had access to affordable property insurance when a viable market to insure these risks did not exist. That situation

no longer exists with the wide variety of affordable property insurance products that are available in the private insurance market today. We believe that state government should not be in the business of competing with the private sector and that our industry,

through experienced independent agents, is best qualified to insure these types of risks. The private insurance market will better protect Wisconsin taxpayers, too. Review the most recently filed 2014 annual statement at oci.wi.gov/lgpif/financial.htm to understand that the LGPIF is not in good financial condition.

Continuing Education (CE) ModernizationThe IIAW has also been leading an industry effort to help streamline and improve insurance agent continuing education (CE) requirements. At the outset of the legislative session, leaders in the State Assembly reached out to the IIAW requesting ideas on how we could improve government regulations for our industry. The Assembly Republican

caucus has created a Red Tape Review initiative to dissect Wisconsin regulations in the administrative code line by line and make changes that will improve the state business climate. Based on this initiative, we are working with the Office of the Commissioner of Insurance (OCI) and the chairs of the Senate and Assembly Insurance committees on a few, simple regulatory changes that we believe are common sense reforms to help independent agents further their profession.

> The first proposed rule change would allow for any excess CE credit hours accrued in an agents renewal month to be carried forward into the next reporting period. Current regulations do not allow for this.

> The second administrative code rule change we are proposing would allow for education courses related to sales, marketing, and agency operations to qualify for no more than 8 CE credits. Current regulations disqualify these subject areas altogether from being used for CE. We believe these subject areas are fundamentally important to the role of an agent and how they interface with the consumer and therefore should qualify as CE course content.

Oppose Health Care Liability Insurance Out-of-State Risk Retention Group LegislationLast session, the IIAW and the Wisconsin Insurance Alliance (WIA) successfully defeated an effort that would have authorized foreign Risk Retention Groups (RRGs) to legally provide medical malpractice insurance in Wisconsin without having to fully comply with our state insurance laws and regulations. The same legislation is being introduced again this session and we continue to oppose any effort that creates an un-level playing field for out-of-state Risk Retention Groups at the expense of a viable medical malpractice insurance market

IIAW GOVERNMENT AFFAIRS UPDATEWith the 2015-16 legislative session well underway, the IIAWs government affairs team is working on a variety of issues on your behalf at the Wisconsin State Capitol:

> Misha Lee is Owner/Founder of Lee Government Relations, LLC and lobbyist for IIAW. Follow Lee Government Relations on Twitter @mishavlee.


GOVERNMENT AFFAIRS

With the new legislative session underway at the state Capitol, the IIAW government affairs team has been busy advocating for the insurance industry on a variety of important issues.

CONTINUED ON PAGE 17


Businesses will encounter an increased set of variables to analyze when structuring

their health care programs which means agents will need to know their boundaries and communicate them clearly to manage the expectations of customers.

Here are just a few E&O exposures agents face from the change in health insurance

delivery and some risk management considerations that could help prevent E&O claims:

Know thy self. Is agency staff knowledgeable and prepared to assist customers? Does it make economic sense to continue to offer health insurance? Dont make a guinea pig out of your customers if your agency is not committed.

Will your E&O coverage respond? Find out if your E&O policy offers the appropriate

ERRORS & OMISSIONS

E&O AND THE ACA INCREASE YOUR KNOWLEDGE BUT KNOW YOUR LIMITS The Affordable Care Act (ACA) has created a major shift in the health insurance landscape, forcing independent agents to re-evaluate how they approach servicing their health insurance customers.

A loose understanding of the ACA will not suffice in the face of

so many technical requirements. Like in any new area of business,

inexperience can lead to significant exposure.


ERRORS & OMISSIONS

that already exists in Wisconsin. Despite our lone opposition to the proposal this session, there may be an attempt to include this law change in the state budget. If that happens, it will be difficult to defeat. To counter this measure, the IIAW has proposed draft disclosure language to require foreign RRGs to provide notice to their insureds and prospective insureds of the risks associated with participation in a foreign RRG. The IIAW remains opposed to this effort and will keep you apprised of any new developments as the session progresses.

Workers CompensationWisconsin has one of the best workers compensation (WC) systems in the country. Since 1911, our system has been a model because of its efficiency and stability that it provides to workers, employers and insurance industry. Governor Walker in his state budget bill has proposed moving the state Workers Compensation Division from the Department of Workforce Development (DWD) to the Office of the Commissioner of Insurance (OCI). Walker is recommending this change because he wants the DWD to be focused

on job creation and training programs. The governor believes OCI is best suited to oversee the WC system. The IIAW is working with our industry partners, members of the legislature, and the Walker administration to ensure that the transfer of the WC Division, if approved, does not undermine the integrity and strength of our system.

In addition, your Association is also working with other state business organizations as part of a larger coalition to advocate for controlling employer health care costs that are overwhelming the WC system. One proposal being considered is the adoption of a medical fee schedule that would put Wisconsin in line with the vast majority of states that have similar cost control mechanisms. The Workers Compensation Advisory Council (WCAC) meets monthly and has already begun the process of developing a two-year WC Agreed Upon bill. It remains to be seen whether or not a medical cost containment provision will be included in the Councils final recommendations to the legislature or if this issue will be addressed separately in the state budget.

Repealing the Personal Property TaxFinally, the IIAW is also working alongside our friends in the business community on advocating for the elimination of, or at a minimum, a gradual phase out of the personal property tax. This archaic tax unfairly burdens small businesses, including IIAW members. Over the years, the legislature has chipped away at the personal property tax with exemptions that arbitrarily pick winners and losers. In the 1970s, manufacturing equipment was exempted, in the 1980s it was agricultural equipment, and in the 1990s computers were exempted. Eliminating the tax creates a more equitable tax code treating everyone equally under the property tax. More importantly, all of our neighboring states have eliminated or are working towards phasing out the personal property tax and are using it as an economic development incentive. Providing tax relief for small businesses will further improve the states economy by allowing for business growth, additional spending and job creation.

coverage for your health benefits operations. This is especially important for traditional

property-casualty agents that are using the ACA as a springboard to enter the health insurance marketplace.

Dont dabble. Understanding the insurance plans is not enough. There are thresholds, fines, subsidies and plan requirements to consider. A loose understanding of the ACA will not suffice in the face of so many technical requirements. Like in any new area of business, inexperience can lead to significant exposure.

Protect your data. Cyber liability remains a major

exposure for businesses that collect, use

and store Protected Health Information (PHI) and Personal Identifiable Information (PII). Agents need to understand the data protection standards required by the exchanges and how they relate to other privacy laws, such as HIPAA.

Exit with caution. Should an agency decide to exit the health benefits business, it must discontinue or transition the business in a way that limits liability to future E&O claims. This includes thorough documentation of conversations with customers.


IIAW GOVERNMENT AFFAIRS UPDATEGOVERNMENT AFFAIRS


> David Hulcher ([email protected]) is Big I assistant vice president of agency professional liability risk management.


MEMBER PROFILE

AUSTIN MUTUAL & MAIN STREET AMERICA: BUILDING A STRONG BUSINESS AND INDUSTRYThe partnership between Austin Mutual Insurance Company and The Main Street America Group (MSA) has been mutually beneficial. The affiliation has helped the super-regional carrier generate a surplus of over $1 billion and written premium approaching the $1 billion threshold.

With a premium to surplus ratio of .96 to 1, we are well-capitalized to grow, said Jeff Kusch, the recently appointed senior vice president/head of field operations at MSA. Jeff is responsible for developing and leading the companys customer relationship strategies, as well as directing the management of regional field operations.

The natural fit between the two companies extends beyond the impressive financial standing. Both entities share the common mission to actively support the independent agency system.

Austin Mutual is the newest Exclusive Company Sponsor of the Independent Insurance Agents of Wisconsin. This is a huge commitment from the company that joined the Association last year.

In 2001, MSA became a founding partner of the Trusted Choice co-brand. Ten years later, the company stepped up to become one of six charter members to sponsor Project CAP and the founding of TrustedChoice.com. The six original company partners are now a coalition of 70 companies and managing general agencies.

We (MSA) have the reputation of being at the forefront of such initiatives, said Mark Friedlander, MSAs head of corporate communications. The investment is well worth it and we gladly do it.

Kusch continued: We know who our customer is - the agent. That thinking is part of our culture and it trickles down to all levels of our organization. The more tools that

agents have to do battle with direct writers the better it is for the independent channel.

Friedlander represents MSA on various Big I committees that focus on the independent agency system. Two notable assignments involve the next generation of insurance leaders InVEST and Young Agents. He is also a member of the Trusted Choice Company Partner Advisory Committee and Agency Best Practices.

The insurance industry needs to do a better job or marketing to the younger generation, said Friedlander. The industry desperately needs an infusion of youth and we are passionate about getting the word out. When our executives give presentations and talk about what this industry has to offer, the students are surprised that its more than just about selling insurance. Theres communications, customer service and marketing. There is something for everyone.

Kusch knows first-hand about opportunity in the insurance industry. He joins a long list of professionals who didnt intend to make insurance their chosen vocation but are gratified they did.

After receiving an accounting degree from Winona State University in 1988 (and playing football on scholarship), Kusch worked for Arthur Andersen LLP and Coopers & Lybrand (now PricewaterhouseCoopers) in public accounting. He became licensed as a Certified Public Accountant in 1991.

He acquired insurance experience from a few clients along the way so he was ready when Austin Mutual offered him a job as accounting manager in 1992. Twenty-three years later, Kusch still calls Austin his professional home.

Kusch worked his way up through the corporate ranks at Austin Mutual. He served as treasurer from 1994 to 2004. While still treasurer, he was named president in 2002. He became CEO in 2004 and ascended to chairman of the board in 2009. After Austin partnered with MSA in 2012, Kusch became its Western Region president. He assumed his new national role in February 2015.

Tiffany Daly, who was the companys regional sales director, has been promoted to Western Region president, overseeing its operations in Wisconsin and 18 other Midwest, Southwest and Pacific Northwest States.

Throughout his tenure, Kusch has witnessed many ups and downs in the industry, but regardless of the economic landscape, he believes customers will respond to a business with a foundation of integrity and solid products.

The insurance business is built on reputation, said Kusch. People buy insurance from agents they know and trust, hoping they wont need it. But when they do, they want to be confident that the underwriter will be financially secure, their claims will be settled quickly, and their questions answered by competent service professionals. We have that in the people who work here and in the service they provide.

To date, Austin has appointed 40 agencies in Wisconsin since it became affiliated with Main Street America and is looking to grow. The companys goal is to strategically add 15 agencies in underserved markets by the end of 2015.

From a coverage standpoint, Austin offers a full slate of personal and commercial lines products.

Its Main Line Business Owners Policy (BOP) provides standard BOP coverages, as well as some 50 additional ones. For example,

By Eric Schwartz


MEMBER PROFILE

coverages include no waiting period for business income, business income/ordinary payroll coverage for up to 12 months, and generous money and securities coverage.

Our Main Line BOP program for contractors is a specialized product, said Kusch. In Wisconsin, we have had great success with contractors they lead the way. The policy offers coverages that other companies do not offer so we rarely get beat on coverage.

We promote this product and help agents find markets.

Austins products also include unique personal lines coverages. Kusch cited as an example a homeowners product that extends a single loss deductible. You dont see that very often anymore.

In addition to high quality products, its necessary today to have superior online tools

for agents and policyholders. They demand these efficiencies to make their jobs easier.

Austin provides 24-hour claim reporting, agent downloading, electronic funds transfer, credit card payments for premium bills, and maintains a user-friendly web-rating and policy-upload tool ART (Austin Rating Tool) and web site for both agents and consumers. Commercial business is written on Main Street Americas proprietary Main Street Station platform.

Our processing systems are user-friendly and get great reviews from our agents, said Kusch.

Austin Mutual is a member of The Main Street America Group. The company writes policies in 18 states, including Wisconsin, through a network of more than 250 independent agents. Austins home office is located at 15490 101st Ave. North, Maple Grove, MN 55369. Contact Clint Collins, Wisconsin field sales representative, at [email protected], or (920) 2521316. Learn more at austinmutual.com, or call (800) 3284628.

Austin Mutual Insurance Company became part of The Main Street America Group (MSA) in 2012. Since then Austin has appointed 40 independent agencies in Wisconsin and is looking to grow. The leaderships goal is to add 15 agencies by the end of 2015. From left: Jeff Kusch, senior VP/head of field operations at MSA; Tiffany Daly, Austins Western Region president; and Mark Friedlander, MSAs head of corporate communications.

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The Emerging Leaders met for their annual pheasant hunt at Milford Hills on January 28. From left: Marc Petersen, Ryan Leitch, Matt Weimer, Justin Staebler, Matt Banaszynski, Jack Demski, Kevin Murray, Rob Gudates, Dan Lau, Alan Neva, and Mike Anderson. Not pictured Derek Wickhem.

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MEET MEGGEN GAGAS IIAW DIRECTOR OF AGENCY SERVICES

IIAW STAFF

By the time I completed my degree in 2002, the economy had taken a drastic turn, said Meggen Gagas, the IIAWs new Director of Agency Services. Companies were cutting marketing budgets. Experienced designers were desperate for work and taking entry-level positions at entry-level compensation. I turned to my passion for the outdoors.

Meggen left the world of graphic design to lead youth outdoor adventure trips. This experience afforded me - although barely supported me - the ability to travel the country with few strings attached.

However, the strain of living out of her car became greater than her passion for adventure. While working a couple of part-time jobs and considering her next career move, Meggen met the owner of an insurance agency in Madison.

He was a genuine person and very intelligent, said Meggen. When he offered me a position at his agency I was just looking for work. As it turned out, this job transformed my desire for work into a passion for a career in insurance. The agencys culture really encouraged learning. Everyone, from CSRs to the owner, was more than willing to share what they knew.

Her primary role in the commercial lines marketing center was to collect quotes from carriers on behalf of producers and analyze the coverage differences. On accounts with unique or uncommon exposures, the producer and marketing specialist or CSR reviewed coverage language to address the unique risk characteristics and the recommended coverages.

The agency owner made himself available to join the consultation, said Meggen. It would have been easy to be intimidated but, since the office culture promoted collaboration, it

felt more like a reward to ask questions and gain knowledge.

After five years at the agency, Meggens interests in the insurance industry expanded into multiple areas. I wanted to experience underwriting. Many of the producers at the agency had once been underwriters, and I recognized the coverage knowledge they had because of that.

In 2009, she accepted a position as a commercial underwriting assistant at a surplus lines broker in Milwaukee. Six months later she was promoted to underwriter. In that role, she had the pen for several carriers but other business was brokered directly to the carrier.

Said Meggen: As I built my book, I tried to focus on the characteristics of those that I admire - namely sincerity, resourceful knowledge and an eagerness to succeed. The agents that I needed to broker with didnt know me so I hit the pavement to meet Wisconsin agents. As I gained knowledge about surplus lines, I found that most agents were hesitant. I found it rewarding to explain unique coverages and to share my expertise as I helped them gain market access.

All of these experiences, with a background in agency and company perspectives, have prepared her for her current position as Director of Agency Services at the Independent Insurance Agents of Wisconsin.

I began serving on the Emerging Leaders Committee a year and a half ago and was immediately drawn to the energy and skill of my fellow committee members and IIAW staff. Their sincere enthusiasm and understanding of the industry was evident. These are the people you want fighting for your industry.

Since she started in January, Meggen has been working closely with Mary Morrison, the IIAWs in house E&O expert. They are collaborating to increase the breadth of the E&O program and educating agents about the cyber liability insurance program. Education is a big part of her new job.

There are countless resources available to agency owners via the IIAW, said Meggen. Part of my role will be to consult with agencies regarding these resources and to assist with implementation. I will also be evaluating, developing and offering relevant risk management tools and resources to Wisconsin agents.

Meggens connection to the IIAW has been positive and she knows firsthand the benefits of getting involved in the Association.

Involvement in the IIAW is a great avenue for you to increase your industry knowledge and ignite or reignite your passion for what you do. I encourage everyone to attend an Association event and find out what the IIAW is all about. Please feel free to reach out to me and introduce yourself at the convention. I am pleased to be part of the IIAW and am here for our members. If you have a question, need a resource, or a reference, please give me a call.

So how does a graphic artist by trade end up in the insurance industry?

Meggen Gagas is Director of Agency Services at the Independent Insurance Agents of Wisconsin. Contact her at [email protected], or call 608.210.2975.


The Main Street America Group Promotes Jeff Kusch to SVP/Head of Field Operations; Tiffany Daly to Western Region PresidentThe Main Street America Group, a super-regional property/casualty insurance company, has announced the appointments of Jeff Kusch to senior vice president/head of field operations and Tiffany Daly to president of its Western Region.

These internal promotions will enable us to leverage the leadership and expertise of two key members of our field operations unit, said Tom Van Berkel, Main Street America chairman and chief executive officer.

Kusch has been the companys Western Region president since 2012. He is also the president and CEO of Main Street Americas Austin Mutual Insurance Company affiliate. In conjunction with his promotion, Kusch will become a member of

Main Street Americas senior management team and report to Van Berkel. He will split his time between the companys regional office in Maple Grove, Minn., and its corporate headquarters in Jacksonville, Fla.

In Jeffs new role, he will be responsible for leading our national field operations function and spearheading state-specific strategies to spur profitable growth via our distribution network of 3,000 independent insurance agent-customers in 36 states, Van Berkel said.

Chris Cox, Main Street Americas assistant vice president of distribution management, as well as the companys four regional presidents Mark Berger (Northeast Region), Steve Berry

(New England Region, Tiffany Daly (Western Region) and Gregg Effner (Southeast Region) will report to Kusch, as will his executive assistant, Bev Krall.

Kusch joined Austin Mutual in 1992 as an accounting manager. His leadership roles at Austin Mutual included treasurer, secretary, president, chief executive officer and chairman of the board. Following Austin Mutuals affiliation with Main Street America in 2012, Kusch became its Western Region president.

Tiffany will assume Jeffs responsibilities as our Western Region president, overseeing the regions management and performance, and providing leadership to our sales team throughout the regions 19 states located in the Midwest, Southwest and Pacific Northwest, Van Berkel said.

Daly joined Main Street Americas Grain Dealers Mutual Insurance Company in 2005 in Indianapolis, Ind. She has held various marketing and sales roles with the company, including regional field supervisor. In 2011, Daly became Main Street Americas Indiana business development executive and assumed the Western Region regional sales director role in 2013, when she relocated to its Maple Grove, Minn., office. In her new leadership position, Daly will remain based at the companys Maple Grove office.

To learn more, please visit austinmutual.com or msagroup.com.

OBrien Elected to Young Nonprofit Professionals Network Milwaukee BoardTherese OBrien, Account Representative at Arthur J. Gallagher & Co., joined the Young Nonprofit Professionals Network (YNPN) Milwaukee Board as the chair of the newly formed mentorship committee. As chair, Therese will recruit mentors and participants for a pilot of YNPN Milwaukees one-on-one mentorship program. Therese will also plan two group-format mentorship programs for YNPN Milwaukee in 2015.

Therese is a graduate of UW-Madison majoring in Marketing and Management. She works with long-term care facilities, nonprofits and public entity sector clients.

The YNPN is where next generation leaders can connect and support each other to strengthen their own leadership skills and, as a result, the nonprofit sector. YNPN began in 1997 as a small gathering of young nonprofit professionals in San

Francisco. It has grown into a nationwide grassroots movement.

The YNPN mission is to involve young people in the nonprofit community. This is done primarily through education and networking events. Founded in 2006, the Greater Milwaukee Chapter is one of thirty YNPN chapters located throughout the

M E M B E R S I N T H E N E W S

Jeff Kusch

Tiffany Daly

Therese OBrien



country that represents nearly 30,000 young nonprofit professionals working in a variety of capacities.

YNPN continues to grow and gain momentum, organizing at least eight events annually ranging from educational programming to service opportunities, to our annual membership kick-off and our holiday social.

To learn more about Arthur J. Gallagher & Co., please visit ajg.com.

ACUITYs Growth Creates 150 Job Openings ACUITY announced that it plans to hire

150 employees in 2015 due to strong, sustained business growth. Staff will be added at the insurers corporate headquarters in Sheboygan and throughout the 23 states in which it does business.

ACUITY has grown to become the 62nd-largest property-casualty insurance company in the nation. In 2014, the insurer increased its revenue by nearly $120 million to reach $1.24 billion in written premium, a 10.6 percent gain over 2013. ACUITY is also continuing work on a 240,000-square-foot addition to its corporate headquarters to accommodate expansion.

We are increasing our staff not only to respond to our strong growth, but as an investment in our future, said Ben Salzmann, ACUITY President and CEO. We need to be certain to have the people and resources in place to maintain our level of world-class service to a growing number of families, individuals, and businesses.

ACUITY will be hiring processors and underwriters, software developers and technical support staff, business analysts, claims staff, customer service representatives, premium auditors, and more.

Because of ACUITYs continued expansion, we have been able to provide rewarding jobs for more and more people, said Joan Ravanelli Miller, General Counsel and Vice President - Human Resources. From new recruits and college graduates to professionals with years of experience, ACUITY offers rewarding career opportunities, interesting and meaningful responsibilities, and employment benefits that make us the employer of choice in the insurance industry.

To learn more about ACUITY, please visit acuity.com.

SECURA Recognizes 2014 Top-Performing AgenciesSECURA Insurance announced its top-performing agencies for 2014. To earn

this prestigious recognition, these independent agencies met specific criteria based on their premium volume, profitability, growth, retention, and loss history with the super-regional insurance carrier.

The Charles L. Crane Agency Company, from St. Louis, Mo., was named the Top-Performing Agency for 2014.

The Crane Agency has partnered with SECURA for 21 years, and this is the agencys seventh time earning a top-performer award from the company. Tom Berra, Executive Vice President-Director; and Mike Reedy, President; accepted the award at a ceremony in January at the companys annual Premier Agent Professional Development Conference.

These independent agencies also received top-performing agency awards:

Ansay & Associates, LLC, Port Washington, Wis., is a two-time award recipient and has represented SECURA since 1985.

Beth & Rudnicki Insurance Agency, Inc., Rockford, Ill., is a two-time award recipient and has represented SECURA since 2000.

CONTINUED ON PAGE 29

Dave Gross, SECURAs President & CEO, congratulates the 2014 top-performing agents. Back row from left: Tom Dawson, Dawson Insurance Agency; Tim Heyroth, SECURA VPSales; Jerod Blakestad, Blakestad; Roger Beth, Beth & Rudnicki Insurance; Mike Reedy, Crane Agency; Tom Berra, Crane Agency; Dave Gross; Doug Dittmann, The Neckerman Agency; and Mike Ansay, Ansay & Associates. Front row from left: Brian McClone, McClone; and Pat McClone, McClone.


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Dawson Insurance Agency, Inc., Fargo, N.D., is a first-time award recipient and has represented SECURA since 2006.

Indianhead Insurance Agency, Inc., Eau Claire, Wis., is a nine-time award recipient and has represented SECURA since 1978.

McClone, Menasha, Wis., is a five-time award recipient and has represented SECURA since 1976.

The Neckerman Agency, Madison, Wis., is a two-time award recipient and has represented SECURA since 1992.

In addition, the carrier recognized independent agency Blakestad from Minneapolis, Minn., as its Rookie of the Year. The agency has worked with the insurance company for 12 years.

Its an honor to celebrate the success of our agent partners, said Dave Gross, SECURAs President & CEO. These agencies are the best of the best, and thats why we love working with them. They display a longstanding commitment to our company, which leads to mutual success and valuable friendships.

To learn more about SECURA, please visit secura.net.

Philadelphia Insurance Cos. Promotes Two New Senior VPs

Philadelphia Insurance Companies (PHLY), a leading commercial property/casualty and professional liability insurance company for niche markets, announces the promotion of two Vice Presidents to Senior Vice President. Bob Morgan is now Senior Vice President of Underwriting and Seth Hall assumes the position of Senior Vice President of Customer Service.

Mr. Morgan will continue oversight of PHLYs Habitational, Real Estate, and Small Business Unit (commercial property) segments in his new position.

Bob has played a critical role in driving strategy and success around our property business, Executive Vice President and Chief Underwriting Officer John Glomb commented. His expertise in

commercial property insurance will continue to enhance the direction and growth of the Underwriting department in this new role.

Mr. Morgan has a 35-year career in the insurance industry. In 1989 he was hired as the first employee to develop and lead the underwriting team at Community Association Underwriters. He eventually rose to the position of Senior Vice President. He joined PHLY in 2006 as Vice President of the Habitational Division and his role was expanded to include oversight of real estate products in 2014. Mr. Morgan graduated from the College of Insurance (now part of St. Johns University) in New York, NY. He is a member of the CPCU Society of America, the Society of Financial Service Professionals, and Community Associations Institute.

Seth Hall joined Philadelphia Insurance Companies in 2009 as the Vice President of Customer Service. Over the past five years, his key responsibilities have expanded to include the oversight and direction of PHLYs Account Management team, as well as being a leader for key strategic initiatives.

Seth is an outstanding leader, who motivates our employees and has helped improve service across our company, shared Brian OReilly, executive vice president and chief marketing officer. By leading several key business initiatives, including Voice of the Customer, PHLY has received recognition from our customers and industry for exceptional service.

Mr. Halls career began as a Management Consultant for Accenture (formerly Andersen Consulting) focused specifically within Service Operations within the Property & Casualty industry. He then started and eventually sold a company he co-owned in Dallas, TX. He then returned to the customer service industry working as a consultant for eLoyalty, before moving on to oversee CIGNA Internationals global service operations. Mr. Hall is a graduate of Pennsylvania State University.

To learn more about Philadelphia, please visit phly.com.



WHO LET THE DOGS OUT? WISCONSIN SUPREME COURT FURTHER CLARIFIES WHO IS A DOG OWNER UNDER THE DOG BITE STATUTE

Statutory liability rests on owners of dogs. In a recent decision in Augsburger v. Homestead Mutual Insurance Company, the Wisconsin Supreme Court determined that a man could not be held liable for injuries caused to a woman who was attacked by dogs that were kept on the mans property but actually owned by his daughter.

While the dog bite statutes imposes strict liability on dog owners for all injuries caused by the dogs that they own, even if the dog innocently caused injuries, owner is broadly defined as any person who owns, harbors or keeps a dog. Previous Wisconsin cases had determined that a landlord is not liable under the dog bite statute for injuries caused by a tenants dog, but that a landowner is a statutory owner subject to liability if she allowed the dog and its owner to stay in her residence with her.

The issue in front of the court in Augsburger was whether a property owner legally harbors a dog kept on that persons property, even if the dog belongs to another person. The court decided that merely owning the property on which a dog resides is insufficient, by itself, to establish that an individual is liable for the dogs actions under Wis. Stat. 174.02. Therefore, the court held that the property owners insurance does not cover the injuries caused by the dog simply because the insured owns the property. A property owner only becomes a harborer (and thus an owner) under the statute liable for injuries caused by a dog when it exercises some requisite level of control over the property, which is a determination that depends on the totality of the circumstances.

Getting to CourtThe property owner purchased the property with the intention that his daughter and her family would move from Colorado and live there. He purchased homeowners insurance for the property through Homestead Mutual. The property owner himself never lived on the property, and his daughter and her family inhabited it without a formal lease and without any expectation for paying rent. At the time the property owner bought the property, his daughters family had two dogs. After they moved there, they rescued a third dog, which then had four puppies, of which they kept three. The property owner was not fond of these six dogs, but he did not tell his daughter to remove them (though he clearly could have). He only visited the property sporadically, and he had no control over the dogs health or well-being.

In 2008, the daughter invited her friend, Augsburger, to the property. Augsburger had

visited the property before, and she knew they had dogs. Augsburger arrived and made her way to the barn when, according to her complaint, she was viciously attacked by four of the dogs. The dogs attacked her and bit her multiple times.

Lower Court DecisionsAugsburger then sued the the property owner, his daughter, and Homestead Mutual. The parties agreed that the property owner did not own or keep the dogs, and thus the sole question at issue for his liability under the dog bite statute was whether he had harbored the dogs. The circuit court determined, on summary judgment, the property owner had

You can easily imagine all sorts of scenarios involving dogs and insurance and, if you are in the personal lines business, you have likely had discussions with your clients about dogs, insurance covering dogs, or even a dog bite scenario. Wisconsin even has a dog bite statute, Wis. Stat. 174.02, which doubles damages in situations where a dog has put its owner on notice by way of a previous attack on a person, domestic animal or property.

COMMENTARY FROM COUNSEL


harbored the dogs by knowingly providing lodging and shelter to the dogs on his property and that he was, therefore, liable. The court of appeals agreed and affirmed the judgment.

Supreme Court OpinionThe Supreme Court reversed, holding that harbor means to provide lodging, shelter, or refuge to a dog and that whether a property owner is a harborer depends on a totality of the circumstances factual determination. In assessing the totality of the circumstances, the Court noted that two of the key factors are (1) whether the property owner lives on the premises with the dog, and (2) whether

the owner of the dog is using the property more like a houseguest of the property owner (which is more likely to constitute harboring) or more like a tenant of the property owner (which is less likely to constitute harboring).

Merely owning the land on which a dog lives, however, is not sufficient to turn the property owner into a harborer of any dogs residing on the property.

Having clarified the statutory definition of harbor, the Court went on to hold that, under the totality of the circumstances, the property owner did not harbor his daughters dogs. The Court held that, even though there

was no rental agreement or rent due, his daughter and her family were more akin to tenants than they were to houseguests because he did not live there, prescribe particular rules for them to follow, or frequently visit the property. Essentially, the property was provided for them to live there as if it was their own, and it was thus the daughters family who harbored the dogs. The property owner was, therefore, not liable to Augsburger, and Homestead Mutual consequently had no indemnification or defense obligations.

Now What?Even though the decision in Augsburger provides clarification regarding who is a dog owner by way of harboring for the purposes of Wisconsins dog bite statute, it is clear that case-by-case factual inquiries will continue by looking at the totality of the circumstances.

COMMENTARY FROM COUNSEL

> Josh Johanningmeier is the IIAWs General Counsel. Call the Legal Services Hotline at (877) 236-1669.

While the dog bite statutes imposes strict liability on dog

owners for all injuries caused by the dogs that they own, even

if the dog innocently caused injuries, owner is broadly

defined as any person who owns, harbors or keeps a dog.

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TECHNOLOGY

Your personal passwords and Personal Identification Numbers (PINs) may not be as clever or nearly as secure as you thought. The following is information on how to create a more secure login.

This month, SplashData published its list of the worst passwords of 2014. These were gathered from files of stolen passwords that hackers had posted online. Topping the list were 123456, password, and 12345. Some other combinations in the top 25 of the worst passwords for the year also included letmein, dragon, and football.

Nick Berry, the founder of technology consulting firm Data Genetics, stated that a majority of people use the same passwords and PINs. Out of 3.4 million four-digit passwords that Berry analyzed, 11% were 1234, followed by 1111 (6%) and 0000 (2%).

Creating unique and hard to break passwords is more important today than ever. This is especially true for access to sensitive information such as online banking, online investments, and medical information.

Tips to strengthen your codes and passwords Avoid using your birth date/birth year. In the event your license is stolen along with your bankcard, it will be easier to figure out your PIN. Berrys analysis also reveals that all possible 19XX combinations were among the top 20% most-common PINs.

Create different passwords for different

accounts. You are better off having a separate and unique password for your most sensitive online accounts email, bank, and credit card websites, for example. A hacker cracking one account will not be able to expose all of your personal information.

SplashData suggests making sure your

data is encrypted on all devices. Also, you should not leave password lists in unsecured documents or on sticky notes.

Make sure your passwords are complex. They should have at least eight or more characters that consist of a mix of letters, numbers, and symbols.

When speaking with Yahoo! Finance, Berry

also noted that typical PIN combinations

tend to use numbers that are close together,

either in value or on the keypad. Do not choose a mix such as 45 or 12, or picking

numbers in a straight line (like 2580), Berry says. Instead, try to pick numbers far away from each other.

Use Two-Factor Authentication whenever

possible. This process adds an additional layer of security beyond the User ID and password. For example, my bank sends a code via text to my cell phone that I then must enter on the website within a few minutes for access. Some websites are beginning to add this process to enhance their security. For example, Gmail now allows you to create a two-factor authentication process when logging into your account. It adds a little more time to the process but greatly enhances your security.

Warning signs > Make sure you review bank and credit card statements on a regular basis. This can help you catch discrepancies early, potentially minimizing the damage of a cracked PIN or password.

> Although hackers and identity thieves are getting more sophisticated in their approach, old-school tricks are still common. These can include planting card skimmers and cameras on public ATMs, for example. To prevent getting your PIN skimmed, cover the keypad from view while entering in your ATM PIN and pay attention to anything that might seem weird with the machine itself.

> You get three free credit reports a year. Use them. Experian, Equifax, and TransUnion are all required to provide consumers a free credit report annually. This allows you to check the history of accounts opened in your name.

> Steve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. Go to steveanderson.com.

MAKE IT HARDER TO CRACK YOUR PIN AND PASSWORDEvery day there seems to be a new story or article about cyber criminals and hackers stealing identities and revealing sensitive information. These hackers wreak havoc on lives by disclosing their private information. While hackers have become more sophisticated in the tactics they use to steal information, a report from SplashData notes that they still prefer the easy route.

The number of data breaches and security incidences in 2015 will likely increase. Taking appropriate steps to make sure your online transactions are as secure as possible is well worth a little bit of effort.


TECHNOLOGY

> Dont use your birth date or year.

> Different accounts? Create different passwords.

> Encrypt your data.

> Make passwords complex.

> Pick numbers far away from each other.

> Use Two-Factor Authentication.

DONT GET HACKED!Tips to strengthen your passwords

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FOOD FOR THOUGHT

RISKY BUSINESSU.S. News & World Report recently published the top 10 schools with undergraduate programs focusing on risk management and insurance. Only two schools from the Midwest appeared on the list. The University of Illinois in Champaign placed 8th and UW-Madison came in 3rd.

Madison offers undergraduate degrees in both Risk Management & Insurance (RMI) and Actuarial Science. Founded in 1938, the RMI program is the second oldest of its kind in the United States. Each fall, the department hosts a career fair that attracts nearly 50 companies, where both full-time and internships are offered. The schools Risk Management and Insurance Society is the oldest collegiate risk management society in the country and its RMI network has more than 2,200 alums. The program graduates about 60 students a year. Total enrollment is 31,319.

All this education comes at a cost. In-state tuition and fees amount to $10,410; out-of-state tuition and fees total $26,660.

The number one school on the list is the University of Georgia in Athens.

Source: PropertCasualty360.com

LINCOLN CREATED THE SECRET SERVICE TO PROTECT MONEYOn April 14, 1865, Lincoln signed legislation creating the U.S. Secret Service. That evening, he was shot at Fords Theatre. Even if the Secret Service had been established earlier, it wouldnt have saved Lincoln: The original mission of the law enforcement agency was to combat widespread currency counterfeiting. It was not until 1901, after the killing of two other presidents, that the Secret Service was formally assigned to protect the commander-in-chief.

Source: History.com

The last known high-quality photo of Lincoln alive on the White House balcony, March 6, 1865. Photo: Henry Warren

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What Would You Do If Your Agency Had A Data Breach?

80% of businesses fail to recover from a breach because they do not know this answer. Responding to a breach is a complicated process that requires the assistance from many different professionals. Failure to notify the effected individuals without unreasonable delay could cost your agency up to $1,500,000 in fines from government agencies. Add this to the $200,000 average cost to comply with notification laws, the legal liability and the reputational harm caused by the breach and you can quickly see how this exposure can be devastating to your agency.

Independent Insurance Agents of Wisconsin has partnered with Arlington/Roe & Co., Inc. to offer our members an exclusive program to help protect their agencies from information security breaches. This program is a holistic risk management process that will help train your staff on privacy compliance in addition to handling data breach notification and third party suits. This program offers the following benefits:

Available To IIAW Members Only Up To 50% Off Premium No Encryption Requirement IIAW Members Are Pre-Qualified For Enrollment* HIPAA Compliance Tools On-Line Compliance Materials Step-By-Step Procedures for Compliance Staff Training Programs Newsletters Expert Support On-Line Data Breach Coach To Help With Notification Regulatory Fines and Penalties Forensic Investigators Public Relations Firms Privacy Counsel Call Center Credit Restoration Services

Notification Costs Outside Limit of Liability Credit Monitoring Security & Privacy Liability

*Some restrictions apply. Agencies over $5M in revenue, over 50% benefits or with prior losses need to be underwritten.

To Bind: 1. Choose the option number and premium from the chart on the left. Make check payable to: Agents Assistance Corporation 2. Complete the application and addendum attached. 3. Attached check to app/addendum and mail to: Agents Assistance Corporation, 725 John Nolen Drive, Madison, WI 53713

Companies with revenues less than $1,000,000 Option #1 Option #2 Option #3 Limit of Liability Agg. $250,000 $500,000 $1,000,000

Retention $2,500 $2,500 $2,500 Notification Limit Legal, Forensics & PR (outside limit of liability)

25,000 records $250,000

50,000 records $500,000

100,000 records $1,000,000

Notification Threshold 100 records 100 records 100 records Sublimits Security & Privacy Liability $250,000 $500,000 $1,000,000 Regulatory Def. & Penalties $250,000 $500,000 $1,000,000 PCI Fines & Penalties $250,000 $250,000 $250,000 Website Media Liability $250,000 $500,000 $1,000,000 Cyber Extortion $250,000 $500,000 $1,000,000 Data Protection Loss and Business Interruption Loss

$250,000 $500,000 $1,000,000

Premium less than 50% benefits $257.50 $515.00 $772.50

If you would like additional information or if you have questions, please contact one of the people below:

IIAW Director of Agency Services Meggen Gagas P: 608.210.2975 [email protected]

IIAW Program Administrator John Immordino P: 800.878.9891 Ext: 8732 [email protected]

Data Breach Program Pricing Premium Includes WI SL Taxes

Companies with revenues from $1M to $2M Option #1 Option #2 Option #3 Limit of Liability Agg. $500,000 $1,000,000 $1,000,000

Retention $2,500 $2,500 $2,500 Notification Limit Legal, Forensics & PR (outside limit of liability)

50,000 records $500,000

50,000 records $1,000,000

100,000 records $1,000,000

Notification Threshold 100 records 100 records 100 records Sublimits Security & Privacy Liability $500,000 $1,000,000 $1,000,000 Regulatory Def. & Penalties $500,000 $1,000,000 $1,000,000 PCI Fines & Penalties $250,000 $250,000 $250,000 Website Media Liability $5

march 2015 wi independent agent

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