Saturday, December 28, 2013

John Wooden Eight Suggestions to Succeeding

“Eight Suggestions for Succeeding” from Wooden: A Lifetime of Observations and Reflections On And Off The Court (which I highly recommend you read!).

1. Fear no opponent. Respect every opponent.

2. Remember, it’s the perfection of the smallest details that make big things happen.

3. Keep in mind that hustle makes up for many a mistake.

4. Be more interested in character than reputation.

5. Be quick, but don’t hurry.

6. Understand that the harder you work the more luck you will get.

7. Know that valid self-analysis is crucial for improvement.

8. Remember that there is no substitute for hard work and careful planning. Failing to prepare is preparing to fail.

John Robert Wooden (October 14, 1910 – June 4, 2010) was an outstanding basketball player and coach. Nicknamed the "Wizard of Westwood", he won ten NCAA national championships in a 12-year period , seven in a row, as head coach at UCLA. Within this period, his teams won a record 88 consecutive games. He was named national coach of the year six times.

Written by:
Tom Jackson
President, Pace 360

Friday, December 6, 2013

Insight On Renting Your Condominium Unit

By Laurie Infantino, I sign nothing, at least that's my reputation.

What is closer to the truth is that I sign "nothing" without first reading it, understanding it, and accepting the terms of what I am being asked to sign.  That is not the case with most people, which surprises me.

My husband and I own a condominium unit in Steamboat Springs, Colorado.  We are part of a condominium association, have reviewed the CC & Rs and both the association and we carry the appropriate insurance coverage.  So far so good?.  Here is where everything goes array. The condominium association contracts with a management company to manage the property.  In addition, each unit owner who has their unit in the rental pool, individually contracts with the management company to rent their unit.

All of that being said, what would then be appropriate in terms of the contract between the unit owner and the management company? In my opinion it is the unit owners who should require the management company to minimally provide evidence that they carry Liability Insurance; Business Auto Insurance for the shuttles they operate on the unit owners' behalf; and statutory Workers Compensation.  Additionally, it would appear appropriate that the unit owners would require of the management company a hold harmless and indemnification clause on behalf of the unit owner and be named as an additional insured on the management company's policy. That would be appropriate.

But that is not the way it works, much to my surprise.  If you actually read the management agreements, it is the management company that requires the unit owner to name them as additional insured on the unit owners' Liability Policy; provide them with a hold harmless and indemnification clause.  It gets worse, the contract requires that the owner shall carry liability and property insurance on the unit as well as coverage on their personal property and contents in the Unit in such amounts and of such types as the manager shall reasonably deem sufficient to protect the interests of both parties.  All such policies shall be so written as to protect Manager in the same manner and to the same extent as such policies protect Owner.

So what that means, in simple terms, is that the manager is dictating to the unit owner the type of insurance they are to carry (even on their personal property); telling them how much coverage to carry; and requiring that the property and liability policy protect them to the same extent it protects us. That is not even within the realm of possibility, especially from the aspect of the property insurance contract under which they have absolutely no insurable interest.
I asked our own insurance agent, one of the brightest personal lines professionals I have known, if she is familiar with these types of requirements.  Her answer was yes, she is often asked to provide additional insured status, hold harmless and indemnification clauses on behalf of management companies.  She went on to say, her insurance companies won't do it and rightfully so.  So, that leaves us, the unit owners, holding the bag. Sign it and pay the piper because our personal insurance sure will not provide protection for these outrageous requirements.
Check out my ICC Profile Page:

Sunday, December 1, 2013

Property Endorsements Common but Seldom Used

By Robb Greenspan,SPPA      As the old adage goes, hindsight is 20/20 vision.

As a Public Adjuster (PA) representing the Insured’s interest only in property claims, I am in a unique position to evaluate the insurance needs of your clients with the benefit of hindsight and long experience.  When I visit a loss, I think to myself, “if only they carried certain coverages” or “if they had only added this endorsement” or “if they had increased their limits here, they would be in a better position to make this claim.”  Obviously, this does little to help an Insured after a loss has occurred.  However, with a little foresight, planning and risk analysis, not only can you increase the quality of your client’s coverage, but they will know what great a service, you, their broker/agent, provided them once a claim hits. Let’s look at some of the property policy endorsements that are out there but not used near enough.

Real Property Coverage

One of the most important coverages is Increased Cost of Construction Endorsement or Building Code Coverage.  This coverage is especially valuable when you are writing a building risk that is very old or not well maintained or in an area that has especially rigid building codes.  In today’s world, almost from the date of construction, buildings need code and ordinance coverage.  Obviously, newer buildings need this coverage less often than buildings over 10 years or older, which will require an extensive amount of retrofitting to bring them up to today’s current codes.  This coverage pays for all construction costs not attributed to your client’s insured damage, but required by the building authorities due to a loss in the reconstruction of the property.  In other words, the insurance company will pay the cost to bring the building up to present day code requirement.

Agreed Value Endorsements

These endorsements can be useful in avoiding valuation problems, i.e. co-insurance.  Once a loss occurs, the insurance company will look at the values at risk versus coverage purchased and in many cases there are requirements (contribution clause) that require the Insured to insure to certain minimums.  Failure to maintain those minimums and the Insured becomes a co-insurer, and by using a formula spelled out in the policy, will pay part of their losses out of pocket.

There are a number of ways to arrive at the value of a building; the market value approach, appraised value and building square footage calculations are just a few.  Although the courts have ruled on this, many companies still choose their own method of valuation which produces a variety of values and consequently, problems.  The easy solution to avoid value problems is an agreed value endorsement which, if written on the risk, allows the company and your insured to agree on the value ahead of time, thus preventing problems (co-insurance) at a later date.  Keep in mind that the claim still needs to be adjusted; however, it does eliminate the specter of co-insurance.

Another methodology of insuring multiple buildings and avoiding the specter of co-insurance is to blanket the coverage.  Although technically, co-insurance still may apply, it is rare that the insurance company will check the values of all buildings when only one is damaged and thus, if there is not sufficient coverage on a specific building involved in a loss, we can “rob Peter to pay Paul” by taking values from the other buildings during a claim situation.  This is a preferred methodology of valuing your property over individual limits when multiple buildings are insured.

In most cases all buildings in Southern California that have sprinkling systems should have Earthquake Sprinkler Leakage coverage (EQSL).  This covers the cost of water damage caused by an earthquake  and in buildings with sprinkler systems, the most likely cause of damage.  Due to the excessive cost of earthquake insurance, many of your policyholders will not carry EQ insurance however, if this building has a sprinkling system, EQSL is a must.

Personal Property Losses

One of the more important coverages under the category for Business Personal Property or Contents would be an agreed value endorsement.  This is beneficial in my view because it takes the risk of co-insurance out of the picture as we demonstrated in our discussion under Building.  The insurance company and your insured agree on a value in advance whether actual cash value or replacement cost and this becomes the limit of coverage, thus avoiding coinsurance clause again.  Make sure your client understands that you are agreeing on this value and that he is accurate in his calculations of those values.  You will have to live with them once the loss occurs.

If your Insured is a manufacturer or retailer who produces a product with name recognition, this next endorsement is very important. Brand and label endorsement  can save your Insured many headaches.  Take for instance a manufacturer of men’s leather coats.  A small fire happens in the finished goods area of the factory and a thousand units are affected.  During the course of the adjustment, the insurance company agrees with the Insured that they cannot sell these slightly damaged items and pays the policyholder for them. The insurance company allows the items to go to a salvage company.  Salvage companies sell distressed and damaged merchandise on behalf of insurance companies to help get them reimbursed for claims paid - sounds simple, but not so.  Without the endorsement above, the Insured’s goods can and probably will be sold on the open market (possibly entering into the Insured’s own sales territory).  These goods are distressed and the Insured is not allowed to alter or remove their label.  The risks to the Insured are as follows:  1) the consumer buys distressed merchandise thus affecting the Insured’s reputation for quality, 2) the Insured may receive countless returns because of the damaged state of merchandise and unable to discern between distressed goods and new goods not affected by the claim and 3) the Insured has no say as to where these goods will be sold.

With the above endorsement, the Insured can be paid to alter or remove their label or put an identifying mark on the label, thus identifying them as salvage or distressed.  The Insured will have some control as to the markets these goods are sold in and will be able to identify them if returned for warranty repairs.  Without this endorsement, the Insured has no control of their salvage.

The example above brings up another coverage - finished goods endorsement.  This pays the Insured his selling price of all finished goods, (not the cost actually incurred by the Insured to manufacture those goods).  This is preferable to the usual selling price endorsement which reads “goods sold but not delivered” for it covers all finished goods and pays the selling price.  Keep in mind that the Insured is in the business of making a profit not manufacturing goods and being reimbursed at cost by the insurance company.

Tenant Improvements and Betterments

Tenant Improvements and Betterments (TIB’s) usually insured under the personal property section of the policy is a source of much confusion and dispute.  When improvements such as walls, partitions, plumbing, electrical equipment, whether attached to the building or not, become damaged in a loss, the question of ownership and the basis of reimbursement always comes up.  Will the tenant and landlord be reimbursed based on a “use interest” basis?  Actual cash value of the TIB’s or no reimbursement at all?  Should the lessor’s policy pay or should the lessee’s policy pay?  Who owns the TIB’s? The landlord or the tenant?  Although the lease may or may not address these issues, the insurance company will not only look at the lease but who paid for those improvements and are they or are they not attached to the building?  Care must be applied when writing coverage for either tenant or landlord to make sure you insure them properly.  The endorsement for Tenant Improvements and Betterments can be modified or manuscripted and made better if the following language is added:  the tenant improvements and betterments, any lease or agreement to the contrary not withstanding shall be considered property of (landlord/tenant, you choose) and reimbursement will be made accordingly.  This can eliminate any confusion.

Time Element Losses

Retail stores, restaurants and some manufacturing concerns can benefit greatly from the extended period of indemnity endorsement, which increases the suspension time of your loss of income claim beyond that which is normally paid in a loss situation.  For example, when a restaurant suffers a fire loss, as adjusters we would calculate the time it would take to rebuild and add to that a period for the adjustment process and that would be the theoretical suspension claim.  That is what the insurance company would use to base the loss of income claim on and pay no additional time after the theoretical period, regardless of whether or not the building was built in the right amount of time.  With any type of service business that is closed, you run the risk of customers developing new buying habits or in this case, eating habits.  With this endorsement, the   suspension period can be increased for a specific period of time over the claim period by 30/60/90/120 days, etc.  We would look at what the business should be doing versus what they are doing and the difference would be paid.  Remember, this endorsement increases the liability of the insurance company by a specific amount of time after the normal loss period ends.  You may need to add some additional coverage for amounts to cover this additional time period.  Remember to always try and consult with your clients accounting department or outside CPA professional in order to determine the amounts needed for business income coverage.  You can always consult with a qualified public adjuster, who is knowledgeable in each discipline, accounting and insurance, for suggestions on proper amounts of coverage as well.

Agreed Amount Endorsements can be applied to loss of income insurance (time element) as well, which will again waive the co-insurance clause in the policy and avoid the associated problems with values. This applies as it does under Personal Property or Building losses.

Since Hurricane Katrina, we noted that there is an endorsement that agents and brokers rarely write that is needed in the event of disasters.  Whether in the Gulf states or here in California, that endorsement is Off Premise Power.  Especially relevant in Southern California where we have rolling blackouts and power failures, this endorsement allows an Insured to make a claim for the power failure which can affect today’s businesses as we rely more and more on electricity and data communications.  When looking for a form to write for off premise power, please make sure that you pick the right one, whether for overhead transmission lines, underground transmission lines and one that includes interruption of communications and data, i.e., phones and internet service.  In today’s world, this is very important.

There many more endorsements that can be used and are made for specific types of risks.  They all should be studied carefully to see if they are appropriate for your client’s needs.  Sources of reference that you can use are the FC&S Bulletins, ISO; however, there are many other resources available to the broker/agent.  I would always recommend consulting with a qualified public adjuster on particularly complicated risks as to how a specific endorsement might affect the outcome of a claim.  Keep in mind that we Public Adjusters look at policies differently than the underwriting department that you tend to talk to.  We see the working end of the insurance  policy, not the theoretical one that underwriting tends to sell to you.  In other words, policies forms do not always work in the field as underwriting believes they will be applied.  A qualified public adjuster is an invaluable source to consult with and give advice as to how to write a risk properly.

One must always weigh the economic considerations of each additional endorsement sold.  By recommending various endorsements to your clients and giving them a choice, you not only perform a great service to them, but you can avoid errors and omissions claims down the road for failing to write or recommend the proper coverages.  As always, I will always recommend that any conversations you have with a policyholder be confirmed in writing and at least once a year, you make in writing, an offer to review coverages with your client.  You will understand the value of these last two recommendations if and when you are ever faced with an errors and omissions lawsuit.

Visit Tague Alliance for more information on becoming a member:

About the Author:
Robb Greenspan, SPPA is a senior partner and second generation owner of The Greenspan Company/ Adjusters International, a public adjusting firm  was established in Los Angeles 1946.  Greenspan  is  dedicated to representing the policyholders interest in property claims only. He has written numerous articles and papers on insurance and teaches continuing education for agents and brokers as well as other professionals for over 20 years. Greenspan is currently a member of the Curriculum Board for the California Department of Insurance and past member of the Insurance Commissioners Consumer Complaint and Unfair Claims Practices task force. He holds the Senior Professional Public Adjusters accreditation issued by the National Association of Public Adjusters.

Friday, November 15, 2013

Thanksgiving Is the Leading Day for Cooking Fires

Thanksgiving is the Leading Day for Cooking Fires

Tips to Avoid Burn Injury When Deep frying The Thanksgiving Turkey and More

Newswise — Thanksgiving Day has more than double the number of home cooking fires than an average day according to the U.S. Fire Administration. More than 4,000 fires occur annually on Thanksgiving Day as celebrants deep fry turkeys, boil potatoes, bake pies and more. “Cooking remains a major mechanism of injuries for adults, and for children who are underfoot,” said Dr. Richard L. Gamelli, director of the Burn & Shock Trauma Research Institute, Chief of the Burn Unit and senior vice president and provost of health sciences at Stritch School of Medicine, Loyola University Chicago.

The recent trend of deep frying the turkey has ignited an increase in injury. In the United States, more than 141 serious fires and hot-oil burns have been reported from the use of turkey fryers over the last decade, according to the U.S. Consumer Product Safety Commission.

Serafino Alfe of suburban Chicago knows. He was deep-frying turkeys for an annual fundraiser dinner a few years ago and ended up at the Loyola Burn Center with third-degree burns—the worst—on his leg.

“I tripped and fell right into the deep fryer,” he said. “Thirty quarts of hot oil poured over my leg and I basically fried myself.”

Alfe said he has used a deep fryer for many years and is always careful. “We put the deep fryers on cardboard and I caught my shoe on the edge and just lost my balance,” said Alfe, who underwent surgery at Loyola on his injured leg the day before Thanksgiving in 2011. “We were using the older fryers that do not have a secure lid and the gallons of hot oil just splattered out everywhere.”

An estimated $15 million in U.S. property damage is caused by deep fryer fires,

“It doesn’t matter if it is a turkey fryer or a conventional oven, you should always take great care when using appliances, vehicles and any other device that has the potential to cause great harm to yourself and others if used in a careless, irresponsible manner,” Gamelli said.

If you’re planning to use a turkey fryer, Gamelli offers these safety tips.

Look for the newer fryers with sealed lids to prevent oil spills.

Keep the fryer in full view while the burner is on.

Keep children and pets away from the cooking area.

Place the fryer in an open area away from all walls, fences or other structures.

Never use the fryer in, on or under a garage, breezeway, carport, porch, deck or any other structure that can catch fire.

Make sure the turkey is dry when placed in the hot oil. Slowly raise and lower the turkey to reduce hot-oil splatter and to avoid burns.

Never cook in short sleeves, shorts or bare feet. Cover all bare skin when dunking or removing bird.

Protect your eyes with goggles or glasses.

Immediately turn off the fryer if the oil begins to overheat.

Make sure the turkey is completely thawed and be careful with marinades. Oil and water don’t mix and water can cause oil to spill over, creating a fire or even an explosion.

Don’t overfill fryer with oil. Turkey fryers can ignite in seconds after oil hits the burner.

Keep a fire extinguisher appropriate for oil fires close at hand and be familiar with how to operate it.

Do not use a hose in an attempt to douse a turkey fryer fire.

If you do burn yourself, or someone else is burned, seek immediate medical attention.

“With some careful preparation, all can gather around the table and enjoy the Thanksgiving dinner they prepared themselves, rather than spending it as a patient in the hospital burn center,” said Gamelli. Loyola’s Burn Center is one of the busiest in the Midwest, treating nearly 600 patients annually in the hospital and another 3,500 patients each year in its clinic.

Released: 11/12/2013 4:20 PM EST

Source Newsroom: Loyola University Health System

Thursday, September 26, 2013

Tague Alliance Brings The Agency Growth Seminar To Member Agents

Tague Alliance is always looking for ways to help our member agencies become more successful preferred independent agents!  We brought in the Agency Growth Seminar to train a number of our members in simple but effective ways to dramatically increase their revenue.  We had a great training session and look forward to seeing positive sales growth as a result of the immediately implementable ideas that were provided to the attendees.

The class size was limited to allow for good interaction and a more personal experience.

Talking shop!  The class took the agents through an agency analysis and then into solutions for growth.

How to maximize cross‐line selling by Taping the income potential of your book of business

Setting the Stage
“Most people already have the knowledge and ability to increase sales results.  What they don’t
have is the knowledge about how to put it all together, manage it and make it happen.”
Scott Channell

The Agency Growth System has four distinct features:

  • A Sales and Marketing System that generates a dependable and reliable source of new business.
  • Simplified Goal Setting
  • How to Tracking and Measure for Results
  • Staff Accountability

Problems and Challenges
Here is the reality of what you face on a daily basis: The average household owns 7.1 policies.
The average agency has a household penetration of 1.9 policies which means 5.2 policies are in some
other agency’s book of business. The numbers don’t get any better when you analyze life and
financial services. On average 1 in 12 households will purchase some form of life or financial
service from someone in the next 12 months. Over the next 7 years, statically, 100% of your book of
business will purchase life or a financial service from someone else.  It isn’t a question of “if”
they leave; it’s a question of “when.”

The problems and challenges that face insurance agencies never seem to change. Every agency has the same basic questions:

  • How can I increase New Business?
  • How can I improve Profits?
  • How can I improve Retention?
  • How can I accomplish all of this with the least amount of effort?

The Solution is Simple
Faced with limited resources and time, The Agency Growth System provides an agency with
ready‐to‐deploy field proven sales and marketing strategies where much of the work is already done
for you, not by you.

  • It is low impact for the staff and the client
  • It is specifically designed to redefine the agent’s role as a Profession Insurance Advisor
  • It focuses on what I believe is our Professional Obligation and that is to ask questions, identify problems and offer realistic solutions
  • It is a systematic and dependable way of producing a steady follow of new business.

The Agency Growth System Workshop

The participants will leave the workshop with a customized “Game Plan”, for their specific agency,
that can be immediately implemented and produce measurable results in days not weeks or months.

The Agency Growth System takes the guesswork out of increasing sales and agency profitability by
giving the agency a unified approach to establishing an Agency Sales Culture based on simple easily
implemented strategies.

The sales strategies include:

  • Policy Review / Cross‐line Selling
  • Internet Sales
  • Targeted Markets
  • Life and Financial Services

Agency Growth Systems will provide implementation assistance and coaching for 30 days. We will do
what is necessary to make you successful.

The Philosophy
The philosophy behind the Agency Growth System is simple:    “Stop selling insurance!”

"I believe our Professional Obligation is to ask questions, identify problems and offer realistic
solutions. This means providing client with advice on all of their policies regardless of who
controls them. If we can accomplish this in a professional manner, clients will give you the opportunity to provide the policies they want."  Harlan Warthen

Monday, September 23, 2013

Tague Alliance End of Summer BBQ

The Tague Alliance staff had a great time with some of our members and partner insurance companies last Friday!  Thanks to everyone who showed!

Here is a link to our Facebook page so you can check out some of the photos:

Or check out our Google+ photo page:

Friday, July 26, 2013

Tague Alliance - Insurance Industry Report Out Now

At Tague Alliance we try to keep our members updated on what is happening in the insurance industry so we all have a better idea of the trends that will have an impact on our agencies and our clients.  Read the report below for a ton of good information:

Monday, June 3, 2013

Wineries and Fire Hazard

Agents in our Southern California territories have great opportunities to write business for Wineries. Below is an article on the unique fire hazards associated with wineries. If you have questions about placing winery business, feel free to contact Tague Alliance for more info, and available markets (contact info at the end of the article)

Written By:

Laurie Infantino AFIS, CISC, CIC, CRIS, ACSR, CISR
President, Insurance Community Center, Insight Insurance Consulting

On July 12th of this year, The Insurance Community University taught a class on Wineries that was sponsored by AmWINS Insurance Brokers. That class discussed the distinctive exposures that a winery operation has and the unique insurance coverages that are available in the industry.

One of the coverages that we did not discuss, in any detail, was the simple peril of fire. On July 19th , just seven days after the class, Wines and Vines Magazine reported two significant fire losses that affected two different wineries; July 7th at Oakstone Winery in California and a few weeks earlier, in late June, Milleta Vista Vineyards near St. Paul, Nebraska. Both fires occurred in the early morning and were total loses. The buildings; inventory and equipment all went up in flames. Owners of both wineries intend to rebuild their facilities.

While fires are rare in the wine industry they tend to be catastrophic and hard lessons are learned following the flames being put out. The largest winery fire in 2005 on Mare Islands in the San Francisco Bay Area, which was caused by an arsonist, destroyed more than 4.5 million bottles and caused in excess of $54 million dollars in loss. Many wineries have still not recovered from that loss.

The cause of loss at the Oakstone Winery was not definitively determined but it was determined to have started on the side of the building near an electrical panel and forklift charging station. The cause of the loss at Milleta Vista Vineyards was still under investigation in late July. The fire destroyed the restaurant and wine storage portions of the business.

The article in Wines and Vines Magazine quotes Guy Colonna, a division manager for industrial and chemical fires at the National Fire Protection Association as having said: “there are no fire codes specific to the wine or beer industries”. He said; “ the single most dangerous aspect of winemaking is the risk of asphyxiation for staff working in confined spaces, often in the presence of carbon dioxide from fermentation or from inert gases for flushing out oxygen. “ Colonna went on to remark that while he does not think that “fire risk” is unique to wineries that the greatest hazard is provably from electrical systems and all the water used in winemaking”. His belief was that if wineries were compliant with current building and fire codes that the risk would really be minimal.

What is important in this discussion is the absence of any ordinances specific to the industry; that many wine operations are in older buildings; that many of the wineries do not have sprinkler systems AND if there is a loss that they will have to build in compliance with codes in effect at the time of the loss. It is , also, not uncommon for wineries to be operating out of converted buildings such as a home. In such cases the winery operation must comply with industrial and commercial codes.

Case in point is the Oakstone Winery. The building at Oakstone was built in 1966 and did not have a sprinkler system or a water supply because codes did not require these codes in place when the buildings were built.

With any winery loss that involved inventory or wine in process, we have to be cautious of the valuation clause found in the specific winery programs. Replacement of finished wine is close to impossible which then brings up the complex issue of determining if the insured has a business income loss. Most often finished wine is insured at selling price, however, in a total loss such as these two wineries that may easily incur a loss of income due to their not being able to produce wine for the foreseeable future.

Insurance lessons learned from these most recent winery fires include:

1. Making certain that wineries have Building Ordinance Coverage

2. Determine if the Building Ordinance Coverage covers “building ordinances in affect at the time of loss or building ordinances in affect at the time of replacement. With rare exceptions Building Ordinance Endorsements/coverage cover ordinances in affect at the time of loss which could limit the amount of coverage available

3. Make certain wineries have Loss of Income coverage AND that they have Building Ordinance on their Loss of Income and Building Ordinance Increased Period of Restoration

4. Review the valuation clause that is found in the policy for both the structural loss and inventory loss

5. Make certain that all equipment is covered properly in terms of amount of coverage; value of items; and whether the equipment is insured as part of the winery program as equipment that includes mobile equipment.

Tague Alliance, an SIAA Member:  Ph (760) 729-1143, email:

Wednesday, May 8, 2013

Additional insured, waiver of subrogation, & primary & non-contributing on GL policy

Here is a great Q&A from Marjorie L Segale regarding Waivers of Subrogation, Non-Contributory wording, etc.

Answer Written by:

Director of Education, Insurance Community Centr, LLC
President, Segale Consulting Services, LLC


Question about adding an additional insured, waiver of subrogation, and primary and non-contributing on the GL policy.

The answer was the waiver of subrogation is automatic if entered into before the loss and add the primary and non-contributing endorsement. My understanding it is the other way around. The primary wording was included and you had to endorse the waiver of subrogation (CG 2988). I read the policy (CG 00 01 10 01)and found the primary wording on page 11 of the GL policy and found on page 12 you must do nothing to impair the rights to recover.

In my list of GL endorsements I couldn’t find anything about primary and non-contributing.

Am I correct or did I read the question and answer wrong?

Submitted by Insurance Community Member


Well, you hit upon the one question that I included just to be a total geek. I am impressed that you went to the policy to look before writing to us.

Here's what I want you to go back and check out. Remember to read the policy, not as the coverage for your own insured, but rather view the coverage as provided for an Additional Insured.

Waiver of Subrogation:

The CGL automatically allows a waiver of subrogation. Condition Number 8 begins with a stern statement that the insured's rights are given to the insurance company and "you must do nothing AFTER loss to impair" those rights. The policy therefore allows subrogation waiver prior to a loss, but forbids waiving those rights after a loss occurs. The main purpose of obtaining the Waiver of Subrogation endorsement is to have an express agreement, but actually is not needed and if you read the endorsement is a little restrictive in the application of the waiver.

Policy Language:

8. Transfer Of Rights Of Recovery Against Others To Us

If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them.

Primary, Non-Contributory

Other Insurance Condition Number 4:

There are two main paragraphs regarding the issue of other insurance: Primary and Excess

The language under the first paragraph says that the general liability policy is primary unless other primary insurance also applies. If there is other primary insurance available to the insured (think additional insured here) then under the next paragraph the policy says it will share on a contributory basis with the other insurance. Paragraph b. of this condition says that this insurance will be excess over other valid and collectible insurance for the named insured. This language, therefore, has no impact on the Additional Insured.

So, the purpose of primary, non-contributory is to modify paragraph a. Primary Insurance as it applies to the Additional Insured. Since the Additional Insured has their own separate insurance, there would be two primary policies available for the Additional Insured. From the standpoint of the AI, they are transferring risk to your insured and wants their own insurance program to be excess over your insured's policy.

Policy Language:

4. Other Insurance

a. Primary Insurance

This insurance is primary except when Paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in Paragraph c. below.

b. Excess Insurance

(1) This insurance is excess over:

(b) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.

Want to become a member of SIAA to obtain direct agency appointments? You can call Tague Alliance for more info: (760) 729 -1143, or email at

Tuesday, May 7, 2013

Tague Alliance 8th Annual Awards Dinner

At Tague Alliance we put a very heavy emphasis on profitable growth with our partner insurance companies and each year we celebrate our results at the Annual Awards Dinner.  This gathering is designed to bring all our constituents together (members, carriers, and staff) to deepen our relationships and reinforce our the value of our partnerships!

The value that SIAA as a national group brings to our local Tague Alliance members is huge, and as a local SIAA Master Agency in California Tague Alliance is able to deliver deep value to our member agencies and partner carriers.  We are very blessed to have an extremely talented and experienced group of carrier executives supporting Tague Alliance.  As we all know nothing starts without a sale, so thank you to all our member agencies who are the horsepower behind Tague Alliance.  Of course, without our Tague Alliance staff supporting the entire effort we would not be where we are today.  It takes all of us contributing to be successful!

Thank you to everyone for your commitment to growing profitably!  Below is a link to our photos and a small montage of photos.  See you all at our 9th Annual Awards Dinner.

8th Annual Awards Dinner Photos

Photo montage on YouTube

Saturday, April 27, 2013

Fighting Insurance Fraud - Some Red Flags That Should Cause An Insurance Agent To Ask More Questions

Tague Alliance works diligently with our member agencies to help them build profitable and stable independent insurance agencies.  In working to mitigate our loss ratios we need to utilize all frontline underwriting tools and insights that are available.  The article below provides some great tips on various red flags that an insurance agent should be aware of.

Fraud Red Flags

Allied's Special Investigation Unit (SIU) is where the fight against insurance fraud ends. Your agency is where it begins. By reviewing this list of red flag behaviors for a new applicant, you may be able to head off a potential fraudulent claim.

Please note: The following are industry red flags as established by the NICB. The presence of one or more does not prove fraud.

NICB general indicators of application fraud
The following list of behaviors may indicate a possibility of intent to commit fraud when applying for insurance.
  • Unsolicited, new walk-in business, not referred by existing policyholder.
  • Applicant walks into agent's office at noon or end of day when agent and staff may be rushed.
  • Applicant neither works nor resides near the agency.
  • Applicant's given address is inconsistent with employment/income.
  • Applicant gives post office box as address.
  • Applicant has lived at current address less than six months.
  • Applicant has no telephone number or provides a mobile/cellular phone number.
  • Applicant cannot provide a driver's license or other identification, or has a temporary, recently issued or out-of-state driver's license.
  • Applicant wants to pay the premium in cash.
  • Applicant pays minimum required amount of premium.
  • Applicant suggests price is no object when applying for coverage.
  • Applicant's income is not compatible with the value of the vehicle to be insured.
  • Applicant is never available to meet in person and supplies all information by telephone.
  • Applicant is unemployed or self-employed in transient occupation.
  • Applicant questions agent closely on claim handling procedures.
  • Applicant is unusually familiar with insurance terms or procedures.
  • Applicant is not signed in agent's view (i.e. mailed in).
  • Applicant works through a third party.
  • Applicant has had a driver's license for significant period, but not prior vehicle ownership and/or insurance.
NICB indicators associated with coverage
Existence of any of the following conditions may indicate intent to commit fraud.
  • Name of previous insurance carrier or proof of prior coverage cannot be provided.
  • No prior insurance coverage is reported although applicant's age would suggest prior ownership of a vehicle and/or property.
  • Significant break-in coverage is reported under prior coverage.
  • Question about recent prior claims is left unanswered.
  • Full coverage is requested for older vehicle.
  • No existing damage is reported for older vehicle.
  • Exceptionally high liability limits are requested for older vehicle inconsistent with applicant's employment, income or lifestyle.
NICB indicators associated with applicant's vehicle/business
Existence of any of the following conditions may indicate intent to commit fraud.
  • Vehicle is not available for inspection.
  • Photos are submitted in lieu of inspection.
  • Vehicle does not appear to be appropriate for the claimed address or income.
  • Vehicle has an unusual amount of after-market equipment (stereo, wheels, car phone, etc.)
  • Vehicle inspection uncovers discrepancy between VIN listed on title/bill of sale and the VIN plate on the dashboard or the manufacturer's door sticker.
  • No lienholder is reported for new or high-value vehicle.
  • Vehicle title or authenticated bill of sale cannot be produced.
  • Applicant is seeking new business coverage and has never been in any, or this type of business, in the past.
  • Sound financial backing for the business to be insured is not apparent.
  • Loss payee is not a legitimate lending institution.
© 2001 Allied Insurance, a member of Nationwide Insurance, All Rights Reserved

Wednesday, April 3, 2013

She was drunk at her Junior High Dance Who gave her the liquor???

As insurance agents, we all know how important it is for our clients to carry sufficient liability coverages. In some cases, it's difficult to explain to clients why they need it, what kinds of claims can occur, and how the liability coverage would kick in. Here is a GREAT example, that a lot of clients don't think about.... liability associated with their children and the choices they make.

Written By:

Laurie Infantino, AFIS, CISC, CIC, ACSR, CISR, CRIS
President of Insurance Community Center

This weekend I had a friend, Amanda, visit for a couple of days. Within hours of arriving she got a call from her daughter’s school saying she (her 15 year old daughter) had to be picked up immediately because she and her friends had been drinking. The drama unfolded with her being picked up, suspended for at least a day and hopefully being an indentured servant at her home for an unlimited time frame. But the question Amanda kept asking in heated tone was “where did you get the liquor”. Finally, after escalating threats, the daughter admitted to getting the liquor from her friend’s parent’s home with whom she was spending the night. Lucky in this case there were not any injuries---no one getting behind a wheel intoxicated—but, it could have happened and what then.


As we look at the holiday season and the parties we give and attend (and those our children are attending) we have to revisit our treatment of this issue from our last holiday newsletter which discussed “Social Host Liquor Liability”.

Most of us are aware of business’s legal requirements to stop serving alcohol to people that are visibly intoxicated. This is especially true for those insureds in the business of serving alcohol. What we are not as aware of is the liability we assume by serving liquor in a social setting referred to as “social host” liability.

We cannot have this discussion without broaching the topic of parents who actually provide alcohol to minors in their homes—who become “social hosts” to under aged people. It may be that they do not serve the liquor to the minors but make it available or they allow alcohol to be brought in their home by their children’s friends. Some parents use a thought process that goes something like this: I would rather my child drink at home than attend a party and either drive home drunk or ride with someone who has been drinking. And here is the flaw in that thought process while you think you are providing a safe haven to your child, your friend’s parents may not share your same philosophy and, in fact, you have contributed to the delinquency of a minor. If that child gets hurt or hurts others and you contributed to that harm by providing alcohol, you will be named in the ensuing lawsuit and you may find yourself being held liable.

This brings us to the discussion of “social host” liquor liability. We become a social host whenever we are hosting an event that serves liquor be it a dinner party for another couple or putting on a wedding in our backyard. Examples of “social host” liability could be cases where our guest gets intoxicated and hurts themselves or causes injury to others; or the situation where our guest leaves our party and is involved in an accident as a drunk driver. Or, it could be a guest that leaves your party and is stopped and ticketed for drunk driving. I know you might be thinking “my friend…my brother in law would never sue me”. Surprise!

They will.

State laws differ as relates “social host” liability and not all states recognize social host liability. However there are some guidelines as to when a host serving liquor can be held liable:

-The host did, in fact, provide or serve liquor to the individual in question

-The individual was intoxicated and caused either bodily injury or property damage to a third party

-The host was aware or “should have been aware” that their guest was intoxicated

And now to the question of insurance when you are sued as a result of someone becoming intoxicated in your home and incurring or causing damage be it bodily injury or property damage. The Homeowners Policy? The Umbrella Policy? The answer is a “probably” yes but as always you have to check the policy. While the Homeowner’s Policy may not have a specific liquor exclusion, most policies will have an “expected or intended injury exclusion” that the claims adjuster may or may not want to pursue. Whenever we talk about limits on a policy, these are specifically the type of situations that can take that $300,000 limit trying to respond to a $1,000,000 judgment.

The ISO 2000 edition says the following:

E.1. Expected or Intended Injury “Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage”:

a. Is of a different kind, quality or degree than initially expected or intended; or

b. Is sustained by a different person, entity, real or personal property, than initially expected or intended.

Could this exclusion be broad enough to remove coverage for the parents? Perhaps it could. Could you then look to the Personal Umbrella? Better read the form. Some forms have a liquor exclusion that applies when serving liquor to a minor.

Let’s talk for a moment about a business that occasionally or incidentally serves liquor. The Christmas season is the perfect time for this discussion. We go to our hairdressers and they offer us a glass of wine, or eggnog with a little bourbon. The office that decides rather than taking everyone to an expensive restaurant will have pizza and beer brought into the office for the big celebration. Is there coverage on the Commercial General Liability Policy for the liability of the business in these situations? Are these businesses in the “business of serving liquor”? The CGL provides automatic coverage as the exclusion only applies if the named insured is the business of manufacturing, selling, serving or furnishing alcoholic beverages. The result of this language is that a business typically has coverage for these “social” situations involving liquor.

Questions about liquor liability coverage? Or placing liquor liability business? Contact Tague Alliance at (760) 729-1143, or

Thursday, March 21, 2013

Performance Compensation For All Insurance Agency Staff

It is important for our Tague Alliance agency principals to always remember that they need to align staff compensation with the financial realities of their agencies.  An insurance agency cannot endure over the long-term unless there is a relentless focus on profitable growth.  The entire focus of SIAA and Tague Alliance is about helping our members grow profitably.  The article below from the Insurance Journal spells out some great advice and input.

Agency Compensation: Who’s Worth What in Your Independent Agency?

By Andrea Wells | March 20, 2013

From top level managers to office and support staff — every person in an agency has a role to play in helping the agency win in the sales game.
When one person fails, the whole agency suffers. And when an agency suffers, so does employee compensation. Or at least it should, say the experts.

Producer compensation in particular suffers when sales are down, but the compensation of everyone in an agency should be affected when sales don’t happen, says Al Diamond, president of the Cherry Hill, N.J.-based Agency Consulting Group, an independent agency valuation and consulting firm serving firms nationwide.
“Employees need to realize that if an agency is going backward, for whatever reason — lost business, soft rates, no growth — it’s very difficult to give more money [to salaries] because you are literally taking it out of whatever profit is left, if there is any,” Diamond says.
Diamond says he witnesses the vast majority of agencies — 95 percent by his estimate — continuing to give salary increases based solely on the longevity of the employee, with average raises ranging from 2 percent to 3 percent. Traditional compensation models that reward employees based on years of service is a horrible way of rewarding good employees, he says, because “agencies end up rewarding mediocre employees, right along with the good ones.”
Agency compensation should be sensitive to the growth and profitability of the agency. That’s why Diamond advocates incentive-based compensation for all employees, not just producers. “We are spending a lot of time doing incentive compensation programs for agencies to get them out of the process of giving raises based on longevity,” he says.
Justin Berry, vice president, sales management for MarshBerry, a national consulting services organization for independent agencies and brokerages, hears a lot of talk about incentive-based compensation for employees outside of sales. But, he agrees, it’s mostly just talk. “I wouldn’t say it’s the norm,” Berry says. “It’s the norm for a conversation but not all agency owners have gone to incentive-based compensation yet.”
Agency compensation models have to move in that direction, according to Berry.
“It has to go to where they (owners) can have control over certain metrics. It’s not the entire salary or base, but we’d like to see a standardized renewal expectation of at least 90 percent for someone in the account executive role. If they are not meeting that level then there will be negative consequences that apply. If they are above that threshold they stay static on their salary. If they exceed the standards of using that 90 percent they are getting some type of bonus,” Berry says. The bonus could be a cash reward or other incentive such as increased vacation time.
Brian Burke, chairman of B.H. Burke & Co. Inc., a Westbrook, Conn.-based organization that advises individuals and firms on the sale, purchase and management of independent insurance agencies, says many of the agencies he works with understand the need to improve the compensation system. He says the recession and the challenging insurance market of recent years convinced a number of agency owners to finally change their agency compensation playbook, especially as it deals with sales.
“Most agencies know that there’s some improvement to be made on the sales compensation line,” Burke says. “So this period of a few years spurred a number of them to finally do what they know they should be doing there.”
One of the biggest changes he’s seen to producer compensation has been the elimination of renewal commissions on small accounts. This compensation play is nothing new, Burke adds. But tough times brought more buy-in from latecomers in the industry.
“Almost all agencies are realizing that you really can’t afford to pay the service staff and the producer on small accounts,” he says.
The transition has been slow — it’s been happening for decades —and it has been hard psychologically for many agency owners and producers. “But when you have tough times and you have the opportunity to say, ‘hey we have to tighten our belts here,’ it tends to be a time when changes are stepped up,” Burke says.
For Chris Burand, founder and owner of Burand & Associates LLC based in Pueblo, Colo., the issue is alignment.
“It pays to be pound wise and penny foolish when it comes to compensation,” says Burand. “A good compensation plan is a plan that aligns the agency’s interest and the producer’s interests. This means the producer is only paid for sales that increase the agency’s value and income.”
Salaries Up Overall
There is some good news in the area of agency compensation: In the past year, agents’ pay has rebounded, growing about 2 to 4 percent on average. As a result, salaries for everyone else in agencies have been on the up as well.
According to Insurance Journal’s annual Agency Salary Survey 2013, average salary adjustments for 2012 came in a full percentage point higher for all three employment sectors:
  • Agency owners, principals and management reported salary increases of 2.8 percent in 2012, compared to a 1.1 percent increase in 2011.
  • Producers/sales reported average increases of 2.9 percent in 2012, compared to a 1.6 percent increase in 2011.
  • Agency support staff reported a 2.2 percent increase in salary in 2012, compared to a 1.1 percent increase in 2011.
Total Income
The 2013 Agency Salary Survey revealed even more positive trends in total income, which includes profit sharing, bonuses, and other income:
  • Agency owners/principals/managers reported a 4.5 percent bump in total income for 2012 compared to a 3.9 percent increase in 2011.
  • Producers/sales said their total income increased by 5.5 percent in 2012, compared to a 3.3 percent increase in 2011.
  • Support staff reported a 2.3 percent increase in total income compared to a 2.2 increase in 2011.
While compensation in agencies appears to be on the rise, the increases are modest in most regions across the country.
According to Burke, following the financial crisis of 2008, the prevailing message of insurance agencies to their employees was that times were uncertain — and so was compensation.
“For a couple of years many people had no increase at all,” Burke says.
But things have gotten better. “People are a little less worried that we are going to go over the edge of the cliff,” he says.
Even though the economy is not roaring back, the property/casualty industry is experiencing a modest lift in income thanks to a gradual hard market in commercial lines.
“So salary increases are not only hoped for and expected, but also affordable,” says Burke. “There’s nothing dramatic happening but for agencies that are reasonably well-run and have enough new business production to grow a little” agency compensation is looking better.
Burand is also seeing salaries rise in the agencies he works with but he sees the increased pay coming more out of need rather than agency profits. “Staff salary increases are minimal but increasing out of necessity,” Burand says. “Agency owners are recognizing that after several years of little to no increases, their staff need raises.”
According to the IJ survey, 25.5 percent of agency owners/management/principals increased the overall compensation paid by their agencies in 2012, and 38.7 percent plan to increase compensation in 2013.
Jo-Ann Gastin, senior vice president for human resources at Lockton, says many agencies, including Lockton, took steps during the recession and soft market to work smarter, opening up monies to increase compensation.
“We’ve all taken steps to right-size,” she said. “That always impacts the bottom line and releases money for increased salaries. I think we’ll be seeing more of that in the future.”
The Right Staffing
Agencies are not only paying out more in compensation, but many agencies are also paying more employees. Agencies have either stabilized or are growing their staffs; not many are downsizing.
According to IJ’s Agency Salary Survey, 36.3 percent of respondents reported increases in staff size in 2012. Just 15.5 percent of respondents reported decreasing staff, while nearly half (48.3 percent) reported staff size stayed the same in 2012 compared to 2011.
More than half of all agencies responding said they believe their agency’s staff size will remain the same in 2013 as 2012, but some 42.7 percent believe their agencies will increase staff size this year. Just 3.9 percent anticipate staff size will decrease in 2013.
According to research conducted by his Agency Consulting Group (ACG), most agencies will remain stable or shrink in staff size in the coming year, Diamond says.
“One of things we measure in our composite group on a regular basis is the number of employees and the revenue per employee,” he says.
The latest set of numbers revealed by ACG’s composite group show that agencies under $1 million in revenue averaged 6.56 employees in 2011, while in 2012 that number posted at 6.33.
The ACG survey also found that agencies between $1 million and $2 million averaged 16.8 employees; in 2012 it was 16.6. Agencies between $2 million and $3 million averaged 24 employees and they stayed stable at 24 employees.
And the largest agencies, those with more than $3 million in revenue, averaged 65.3 employees in 2011 and 64.3 employees in 2012.
In Diamond’s view, agencies are finally using automation appropriately to generate more revenue per employees. In addition to increasing efficiency through automation, those agencies with incentive compensation plans in place are able to provide raises to employees, he says. “And you do that by not adding employees. You do that by growing with the employee base that you already have,” he adds.
Burke agrees. He hasn’t seen increases in staff but he has seen many agencies doing a better job using technology to be more efficient, sometimes changing agency management systems to help.
“Revenue per employee is the whole deal,” he says. “Agencies have to find ways to operate more productively so there’s quite a lot of effort going on in the better agencies to learn how to be more efficient.”
In Berry’s view, agency staffing has never really decreased, even in the worst years of the recession. “Usually small businesses don’t react as quickly to the market. They hang in there a little longer before making changes,” he says.
He has seen agencies move out lower performers in recent years. “It’s been a good opportunity for that decision,” Berry says. Now, as times for agencies improve, he sees agencies hiring again. “Hiring is increasing right now. It’s the right time to hire. But it’s always the right time to hire the right person.”
Burand says that too many agencies make the mistake of waiting to hire staff until sales increase so much that the workload is not bearable.
“The best time to hire is when the workload is high but manageable, so that the staff still have time to help train the new people,” Burand says. “The smartest agency managers know that hiring staff earlier rather than later can make all the difference in whether an agency achieves quality organic growth.”
The Right Compensation Plan
The insurance industry is well- positioned to attract top salespeople for a number of reasons.
Producers want to be rewarded for their success with an open opportunity to earn more money, according to Berry. They want to know they are in control of their income.
They also want a re-occurring revenue stream that most organizations or industries don’t offer, Berry added. That’s a perk that the insurance business delivers over other sales industries.
“They get paid 90 cents on every dollar every year plus that high retention percentage of that re-occurring revenue,” Berry says. “They only have to sell that product one time and get paid on it 90 percent of the time for the rest of their lives.”
Lockton’s Gastin says that’s one aspect that draws top-notch sales professionals from outside of the insurance world into the business.
“We have a unique model and our financial model does lend itself well to the entrepreneur because it’s their own business,” she says. “It’s a very different financial model than you would see in other companies.”
The independent agency producer model has no compensation restrictions, and no geographic restrictions. “Producers are literally in their own business and can go anywhere that they want and make as much money as they want,” says Gastin, who believes that’s a good recruiting tool for the industry.
Diamond says what producers want in compensation may depend on where they are at in their career.
“The producers that are young and inexperienced are looking for the highest dollar amount coming out of the agency,” he says. “But the producers who know the business and understand that it is the net money that counts and not gross money are saying, ‘We can trade off percentage commission if I can get other things paid for that I would have to pay for myself.’ They are looking for the net dollar.”
Burke says what producers want most is a fair split of commissions. “And it’s all over the place as to what the perception of fair is,” he says.
They also want “good support” in terms of having proposals prepared on time, good service, and good carrier relationships.
Then producers who are moving through their 30s and early 40s realize that they not only have to get income, they have to “build some equity in something,” Burke says. That means some type of post-career benefits, usually in the form of deferred compensation. “So if they if they die, or are disabled or retire they, or their beneficiaries, get paid a percentage of their commissions for a few years. It’s usually in the form of deferred comp in addition to the cash compensation,” Burke says.
Some agencies embrace that idea and some fight it. “It’s something you want your producers to have. Why fight it? And it’s a very good recruiting tool,” Burke adds.
Diamond agrees that retirement benefits, whether a pension plan, a deferred compensation plan, or shadow stock, are a good idea for both the producer and the agency.
“The reason it benefits the agency is that the more they have tied up in those plans the more likely it is that those producers will stay until retirement as opposed to jumping ship. The reason it’s good for the producer is that he has the same benefit as if he owned an equity position in the agency or in his book,” he says.
This kind of benefit is important to offer key agency players who, Diamond says, are the “most valuable players” in an agency.
When it comes to the right compensation plan for service staff, good wages are important.
“What is important for agency owners is to determine whether they need quality staff,” Burand says. “Quality staff are far more productive than average staff but the agency must pay approximately 10 percent more for this quality. These agency owners believe 10 percent more is a great investment. Agency owners that focus less on productivity feel differently.”
Dave Coons is senior vice president of The Jacobson Group says the insurance industry as a whole is witnessing a push to incentivize. “While base salaries are remaining relatively flat, insurance organizations are crafting enticing bonus plans and benefit offerings. To cater to a diverse and mobile workforce, flexibility in scheduling and geographic location is becoming commonplace. Work-from-home and other telecommuting options are opening up the talent pool,” he says. “Competitive compensation will always be a selling point for candidates and greater incentives will attract stronger talent.”
Berry says it’s important for agency owners to understand that they “get what they pay for” when it comes to top employees.
“It’s a tough bite to put out money for a good producer,” he says, but in the end it’s worth it to the success of the agency.
Insurance Journal’s Agency Salary Survey collected 1,386 responses from independent insurance agencies and brokerages nationwide via an online survey. Demotech Inc., Insurance Journal’s official research partner, assisted with analysis of this year’s survey results. For the full 2013 Agency Salary Survey report, see the Feb. 25, 2013, issue of Insurance Journal Magazine. For more information, contact

Friday, March 1, 2013

6 Tips For Sales Goals That Stick

Here is a GREAT article with helpful tips that will help you achieve your sales goals.  It's geared for year end, but can be applied to any time of the year. If you're in a rut, and want to talk to someone about increasing your opportunities by having access to more carriers, contact Tague Alliance (SIAA Master Agency) at 760-729-1143, or email at

Written by:   Phil Beakes, CEO
Peregrine Insight Group, LLC

It's near year-end, and it's time to meet with your individual sales teammates to set goals and expectations for the new sales year ahead. I get feedback on this process that ranges from "We don't set goals at all", to "We dictate goals and hope for the best," and everything in between. Many avoid this completely, at their peril.

Unfortunately this process, many times, follows along two typical paths. The first one is where management looks over the cash needs of the company, which get's divided up into regions and districts, and down to the individual sales person. These "quotas" are handed to the sales person, like it or not, without their buy-in or even their input.

The second difficult scenario is where sales management sits with a sales person and a negotiation ensues to get to a goal everyone "can live with". Both parties gear up for the encounter with the manager coming in with twice what they need, and the sales person entering the conversation with half what they can accomplish and they "settle" in the middle somewhere. The entire process is to gain agreement so that accountability and consequences can be brought to bare. But where is the plan? Where is the discussion and plan around the individual behaviors needed to make this goal happen? And, is it even the right sales number for the organization in the first place?

Does this ring a bell? Isn't it time for a change? Remember, "We manage what we measure", and "Every journey of 1,000 miles begins with the first step." The following is a solid system to set sales goals with your teammates that leaves you with a solid goal. One that is endorsed and supported by your team member, and provides you with behaviors to measure (remembering that we can't manage numbers in sales...only behaviors that lead to those numbers.)

1. Vision: Re-visit "What's in it for them?" Why are they in sales? What do they want for themselves and their families? What income do they need to support this, translated to sales levels needed to provide this. This creates the critically important emotional drive needed to see them through and drive them towards the goal. (Write this number down.)

2. Last Year: Produce their list of clients and the sales or income these represented this year. Notice the large ones, the small ones, the forgotten ones in the middle that are so easy to do business with. (Write this number down.)
3. Evaluate: Here we need to do two calculations.

A.) What accounts will be going away, either through competition, acquisition, the economy, or other reasons that would result in them not providing you the income they did the prior year.

B.) What is available to expand from the remaining clients, either from new products sold or the clients account grew and will lead to more sales (Add this to #2 above.)

4. New Business: Evaluate your market. What accounts you did not get but might this year. Look at new markets, new approaches and activities. From all of this, add up the opportunities and add the sum total of the new revenue to #2 above.

5. Compare: Now, compare this total to several areas:

A.) The visionary income needs of the sales person. Is this going surpass it?

B.) Incremental sales contribution to the top line needed by the company. Does this match or exceed what the budget needs are? Is it enough? Is it a fair request?

Once this is done, determine what adjustments need to be made, like support needs or pricing? Get agreement on the final number be PRODUCED.
6. "Doable Doses": Break down all aspects of the successful sales goal called KPI's (Key Performance Indicators), like average transaction size, hit ratio, number of appointments and calls needed to produce that revenue, and you are done!

You now have the annual goal, how it's made up, and the behaviors you need to manage the sales person who is now a voluntary participant in the process.

If you use this process, or something close to it that conforms to your business process, you are ready to start the new year with a plan of action you can track and manage to the success of the whole team.

Peregrine Insight Group, LLC

P.O. Box 5046 ~ Ventura , CA 93005

Toll Free: (888) 868-5055 ~ Office: (805) 382-4500 ~ Cell: (805) 284-2626
Effective immediately, please use my new email address:

Learn more at:

Wednesday, February 6, 2013

Referrals... Referrals... Referrals

Your best source of leads for new business will be your current book! They're a warm market for you. They know who you are, and already love your service. So whynot ask if they know someone who could also benefit from relationship with you and your agency??

Written by: Jerry Nisker

Target Marketing Training

This is the nineteenth article in a series of Target Marketing ideas that I hope will help you to think differently and set yourself apart from your competition. In this article I will deal with one item that most agents do very poorly; asking for referrals!

Referrals are the lifeblood of sales…any kind of sales! Whenever you call someone and are able to say “I was asked to call you by____________” it increases your chances of an appointment and later the sale. The real question is why so many agents fail to ask for referrals. My theory is that they don’t want the rejection that they believe comes with asking for a referral.
Early in my career I began trading Laker tickets for five referrals. There was little or no rejection and I found that I expanded my book of business without making “cold calls.” I have also learned that if someone believes that you have done a good job for them they are happy to refer you to others. You simply need to ASK.

The renewal appointment is the perfect way to accomplish three goals. (1) To be certain that you have properly covered your client. (2) It give you the opportunity to speak with them about other lines of insurance (3) It gives you the opportunity to ask for referrals.
Asking for referrals should be part of the renewal process. I recently did a seminar for an agency in southern California. The next morning I received an e-mail from a producer telling me that he had a renewal appointment at 2 p.m. that day. He received three referrals from his client; and one of those referrals was made by the client directly to a friend of his during the renewal appointment.

All of this is especially true when Target Marketing. The reason is that your client knows others in the same industry; the industry that you are specializing in; the industry that you are considered the expert. All you have to do is ASK.

I welcome your comments, and if you are interested in taking my complete Target Marketing Seminar, please give me a call at 714 813-3221. Four hours could change your entire career. (4 CE credits available in California)

Thursday, January 3, 2013

10 Ways to Attract and Retain Great Employees - Parts 1 & 2

At Tague Alliance, we always get questions from agents wanting to know about hiring employees. Here is a great article from The Insurance Community University on how to obtain and keep great employees!

The "human factor" has always been paramount for the insurance industry. In today's business environment, clearly the long-term winners will be companies that provide a flexible and challenging work environment, along with employee recognition and rewards. Organizations have to be willing to share their successes. If employees are asked to share the risks, then they have to share the rewards.
In our work as consultants we often discuss what owners and employees think are the key motivating factors. Most business owners initially think money is the key issue. However, many employees state that they are looking for challenges, recognition, and empowerment. 
Despite the current softness in the economy and the rise in the unemployment rate, the shortage of skilled insurance workers is still restraining growth for many agencies. Given this environment, what can a firm do to retain and attract the best and brightest employees, while challenging them to achieve the business' goals? 
First, recognize that money, by itself, will not do it. High performing employees are searching for something more than just a high salary. The typical employee compensation plan should include a total package of rewards, recognition and environment. Some of the elements are "satisfiers" that allow a firm to attract and retain employees such as benefits, flex-time and training. Other elements of compensation are "motivators" such as bonuses, incentives, challenge, and opportunity. A well designed plan will have long term and short term compensation components. 
The key to attracting and retaining the best people to the firm is the use of a "total compensation" approach. It is also a critical component in improving employee performance. A firm that takes the time to carefully customize a "total compensation" package will transform individual employees into high performing, and committed employees. 
There are three basic ingredients to the total compensation package that every agency must have:       
1.         Challenging Work
The old system of directing and monitoring every task that an employee performs is out. Employees with multiple skills and authority are in. For example, a major retailer has a one-paragraph employee handbook that states: "Rule #1: Use your judgment in all situations. There will be no additional rules." To truly perform at this level requires enormous trust in the employees. However, if a business is able to perform at this level it will reach incredible heights. 
Provide additional opportunities for learning and skill development to spice work up. Encourage the staff to take classes to get licensed and for courses to earn the necessary CEUs. But, an expansion of training could provide more flexibility through a higher skilled workforce. Send the employees to Dale Carnegie, Microsoft software training, business skills seminars, team building sessions or a sales class (such as Dynamics of Sales sponsored by CIC).   
2.         Work Environment
Today's workforce is looking for flexibility on the job and balance in their life. Management needs to evaluate ways to realistically provide this sought after flexibility in work. For example, tradition has it that the employees work in an office with established work hours. Could the firm allow for variations, such as 4-day workweeks, working at home two days a week or job sharing? Flexible work hours are becoming a common tool to attract and retain good employees.   
3.         Recognition and Rewards
Non-cash recognition awards are a very effective way to reinforce the agency's values. They can be a low-cost, high-impact element of the total compensation package. For example, employees who provide outstanding or innovative customer service receive special awards. One way is for employees to be nominated by customers or their peers.
Management needs to think about the types of awards that make sense for employees. Here are some examples:
¯Provide a day off with pay 
¯Provide tickets to sports, music or cultural events 
¯Take out an advertisement in the local newspaper thanking your employees for their contributions 
¯Provide a donation in an employee's name to the charity of his or her choice 
¯Pay for tutoring for the winner's child
¯Have the winner's car detailed during work
¯Pay for the winner's house to be cleaned
¯Pay for an evening out for the winner and their spouse - dinner and babysitting
Once the basic ingredients are established, the firm can then look into advanced tools to attract and retain employees. The following are some of the approaches that owners should also consider:
4.         Profit Sharing
Although money is not always king, it still has a lot of clout. Firms that establish a bonus plan based on the business profitability will have employees that strive to increase sales and cut expenses. Profit sharing can be based on the profitability of the overall business or by profit centers such as commercial lines versus personal lines versus life and health. The pool of bonus money can then be distributed to the staff based on management's discretion. 
A variation of profit sharing is to reduce the employees' base compensation while providing quarterly bonuses based on a department's performance. A plan that tracks employee performance will then allow them to see a direct correlation between their effort and their compensation.         
Even in this economy, great employees are hard to find. You need to work hard and smart in order to find those star performers. Below are six more ideas for your agency to find and keep those high performers. 
One of the key steps to take is to do your homework before you even begin the process of hiring a new employee. First, you need to identify what you are looking for. This includes the responsibilities for the position, skills required and your basic expectations for the type of person you want to hire. 
We are very excited to offer to you our new employee hiring service through our partner, Insurance Hiring Systems. This is a great resource to help you do your homework before you hire and then have access to many tools that make sure you hire the right person.
10 Ways to Attract and Retain
Great Employees - Part 2  
5 and 6            Phantom Stock and Stock Appreciation Rights
Stock appreciation rights (SARs) and phantom stock are both specialized deferred compensation techniques designed to provide an employee with the economic benefits of stock ownership without the employee actually owning any company stock. When an owner cannot or will not change the existing ownership structure, SARs and phantom stock are often used, to provide an employee with some sort of incentive compensation based on the actual business performance. 
A SAR is simply a grant to an employee which gives that person a right, at some specific time in the future, to receive a cash award equal to the appreciation in value of a certain number of shares of company stock. In concept, SARs are similar to stock options, but different in several points. Stock options require the employee to purchase the company's stock at the grant price. However, SARs do not require a cash outlay from the employee. The employee only receives the appreciation in value of the stock.
Phantom stock on the other hand can be viewed as units of value, which directly correspond to an equivalent number of shares of company stock. These phantom stock units are then granted to an employee for a specific period of time. When the maturity period is reached, the employee is then compensated directly in cash, based on the value of the phantom stock. Unlike SARs, the amount of compensation with phantom stock usually includes the underlying value of the stock as well as any appreciation above the grant price. Another difference is that SARs are typically paid out when the employee chooses to exercise the SAR, while phantom stock typically has a fixed award date. 
7.         Deferred Compensation
Deferred compensation is a method for producers to build long term value for their efforts directly related to their books of business. We recommend using deferred compensation instead of ownership in the producer's book of business. The plan is often phased in over time until the producer is fully vested in the plan. 
The agency benefits by having a system that encourages the producers to build their books as well as remain with the firm. It must be noted that a deferred compensation plan (as well as SARs and phantom stock) creates a contingent liability for the firm, which does negatively affect agency value. However, deferred comp is also "consideration," which helps uphold the covenant not-to-compete in a producer contract. This is another good reason to include deferred compensation as part of a producer agreement.
8.         Split Dollar Life Policies
A split-dollar plan is a way to provide life insurance for an employee or their spouse at a reduced cost to that individual. The premium for the insurance is shared by the employee and his or her employer (thus the name "split dollar"). 
It is an effective way to retain key employees while the business is reimbursed for every dollar it advances. From the employer's perspective, split-dollar is an inexpensive method of buying life insurance for any personal or business needs of select employees. It enhances employee loyalty by providing substantial insurance benefits. Some split dollar policies can provide funds, which may be used for additional employee benefits in the future (deferred compensation, salary continuation, stock redemption, or retirement income).
From the employee's perspective, split-dollar can help replace needed family income that would be lost at the employee's death or help pay any estate taxes. If the employee owns the policy and collaterally assigns the policy to the employer, the employer can borrow against the cash value to the extent allowed by the collateral assignment form. 
9.         ESOPs
Employee Stock Ownership Plans (ESOPs) are a way for business owners to sell shares in the company or to provide an additional benefit to all qualified company employees. These plans were initially created as a win-win for business owners and employees. ESOP contributions are tax deductible as are dividends if they are paid to employees directly, on their behalf to the ESOP or applied to the loan payments of a leveraged plan. Because the ESOP is funded with pretax dollars, the company's tax savings may increase even further.
The selling shareholder can also defer the capital gains on stock sold to an ESOP as long as the ESOP owns 30% or more of the company's stock and the seller rolls over the sale proceeds into qualified replacement property (stocks or bonds of domestic companies). Employees pay no tax on the contributions until they are entitled to receive the stock when they leave the company or retire. At this point, the company generally buys back the stock through a buyback provision in the ESOP. 
ESOPs are expensive to set up and maintain. Businesses need to be a certain size before it makes financial sense. We recommend that agency owners do their homework before seriously considering this option. 
10.       Stock Equity
Stock ownership usually conjures up visions of importance and respect. Producers and employees feel that having the word "Owner" on their business card will improve sales and stature. Often the employees only understand the benefits of stock ownership and the drawbacks are ignored or not understood.
Agency owners are often unclear themselves whether or not they should offer stock to an employee. They usually first think about it either when a current employee is about to walk out the door and may not come back. Owners might often feel that they are forced to offer stock in order to entice a new producer to join the firm or to retain the currently employee, such as a producer with a book of business.
We recommend that owners think long and hard before offering stock to an employee. The decision whether or not to make an employee an owner needs to be based on a review of many factors. The right decision can propel the agency forward for many years to come. The wrong decision can mire the firm in unimportant muck. 
A Final Thought
A good principle to follow is that if you want outstanding results, you need to be prepared to pay outstanding rewards. Implementation of a "total compensation" plan will motivate employees to improve not only their own performance but the performance of the firm as well.   
Questions about joining Tague Alliance? Call the office to get the answers to what you are looking for! 760-729-1143 or