an in-depth analysis of the issues facing business owners...

2018 · 2019

INsights An in-depth analysis of the issues facing business owners today.

....

Topics include:

Worker’s Compensation – What you need to know!

Who’s in Your Work Computers? Hackers, data breaches & cyber liability

How to Navigate & Manage Employee Leave Issues

Captives & Alternative Markets for Employee Benefits

Creating a Culture of Accountability

Tax Reform

....

Visit rogersgray.com/academy to learn more.

If knowledge is power, we want our clients to have superpowers.

As a trusted and innovative provider of protection to our clients,

we believe education has a direct impact on our clients businesses and the best

relationships are partnerships. Join us for the Rogers & Gray Academy Seminar Series.

877.511.7937 I rogersgray.comBusiness I Employee Benefits I Personal

rogersgray.com | 2018 · 2019 | INsights 3

For more than 100 years, Rogers & Gray has provided expert direction and professional support for our cli-ents’ business, personal, and employee insurance needs.

That means something to us.

It’s not an accident or a fluke that we’ve been in business for so long. It happens by giving deliberate, authentic service. It happens by creating deep relationships with our clients. It happens by offering value beyond what is in a policy.

As you can see from the pages of this issue of INsights, our team is dedicated to sharing thoughtful education, staying abreast of the changing landscape of the insur-ance industry, and doing the absolute right thing for our people and our clients – always.

What does that mean for your business and your family?

Education – Insurance is a complicated topic. Our ed-ucational seminars, webinars, articles, content, thought leadership, and other offerings are designed with you in mind. The nature of the industry dictates that our agen-cy and our clients are kept up to date. INsights is a per-fect distillation of the work we do to ensure that you are kept informed.

Coverage – Our insurance clients trust us to safeguard their assets, their businesses, and their employees. We won’t shortcut this and we continuously review your

coverage to ensure that it evolves over time as your needs do.

Guidance – We’re more than an insurance agency – we’re business owners, spouses, and parents, too. We work closely with our clients to help guide them through milestones and challenges, just as they do for us. That can be everything from guiding them through succes-sion planning, to helping them protect personal assets when their teenager begins to drive, to proposing alter-natives to rising healthcare costs for their employees. That is the true meaning of partnership.

We hope you find the information shared in this issue of INsights valuable, both personally and professionally. We’d love to continue the conversation – please contact us with any feedback or suggestions.

Michael C. RobinsonChairman | Partner

David T. RobinsonPresident & CEO | Partner

Want to protect what matters most? We’re with you.

Need guidance? We’re with you.

Do you value relationships? We’re with you every step of the way.

(800) 553-1801 I rogersgray.comBusiness I Employee Benefits I Personal

4 INsights | 2018 · 2019 | rogersgray.com

INSIDE INsight

[6] Cybersecurity: Who’s in your computer?

[8] By the Numbers: The dangerous disconnect: Cyber insights for small business

[10] Captives offer a long-term, sustainable health insurance solution

[12] Case study: Cape Abilities

[14] Insurance for insurance: The global reinsurance marketplace

[16] Creating a ‘Best Place to Work’

[18] The expanded role of finance and the CFO: Reshaping businesses through business intelligence and analytics

[20] Case Study: Rogers & Gray’s management evolution

[22] The power of the Internet of Things

[24] Group captive insurance – risk vs. reward

[26] Voluntary benefits are a key retention tool

The insurance experts at Rogers & Gray have the experience, knowledge, and expertise to help you manage the issues facing business owners today.


[28] Q&A with HR

[31] HR practice calculator: The true cost of your HR practices

[32] How to succeed at family business succession planning

[34] Managing your company’s automobile risk

[36] Claims Made vs. Occurrence Form: Which type of professional liability policy should you have?

[38] EAPs and the opioid crisis

[40] Consider construction coverage to protect projects

[42] What’s ahead for flood insurance?

[44] Case Study: Consolidating coverage to avoid gaps

[46] By the Numbers: #metoo The spotlight on sexual harassment and EPLI insurance

[48] EPLI and 3rd party tenant discrimination coverage

[50] Ordinance or Law Coverage can provide both personal and commercial protection

[52] Negligent entrustment laws affect commercial automobile coverage

[54] New friends: Creating a network of referral sources

[56] Personal insurance (auto/homeowners/ renters) as a voluntary employee benefit

[58] The client experience

[60] Home sweet home business

[62] How to ensure you are protected when using Airbnb

[64] 5 real-life claims that will convince you that you need umbrella insurance

[66] The benefits of being an educated healthcare consumer


Cybersecurity: Who’s in your computer?

By Michael Duffley

TECHNOLOGY INsight

Michael Duffley is Vice President and Director of Sales at Rogers & Gray Insurance. He can be reached at (781) 936-4310 or [email protected].

It seems like every day we read another headline about a cyber attack or data breach. Cybercrime is a very real threat facing any company today. In their 2017 Annu-al Cybercrime Report, Cybersecurity Ventures predict-ed that global cybercrime damages will top $6 trillion annually by 2021. These damages include destruction of data, stolen money, lost productivity, theft of intel-lectual property, theft of personal and financial data, embezzlement, fraud, and post-attack disruption to the normal course of business, forensic investigation, res-toration and deletion of hacked data and systems, and reputational harm. Businesses that aren’t addressing these real and growing threats expose themselves, their employees, their vendors, and their clients by not fol-lowing best practices and insuring their risks properly.

Keep this in mind – the hackers, whether they are a lone wolf operating independently or more organized groups of individuals, are expecting a return on their invest-ment. They are spending time and resources working to develop better schemes and more effective proto-cols in order to improve their success. This is a busi-ness to them, complete with planning, strategy, areas of expertise, and growth. Business owners must treat their defense against these threats with the same level of seriousness, know and implement the most common threats and the best practices to prevent and avoid an attack. And in case you do suffer an attack, protect the business with proper insurance coverage.

All business owners should be aware of the develop-ments around cyber attacks. The first step is consulting with your risk management or insurance partners for guidance and education around what your risks are and how to prevent and protect against them.

According to research from Symantec, worldwide ran-somware attacks increased by 36 percent in 2017. The report also found that emails are being increasingly used by hackers, with an estimated 1 in every 131 emails containing malware. Depending on how many emails your organization receives, that could mean multiple exposures to malware on a daily basis.

Furthermore, a study done by Panda Security conclud-ed there are more than 230,000 new malware samples produced every day, and this is predicted to rise. The study estimated that Trojans were the main source of malware, being responsible for more than 50 percent of all malware.

So what can you do to minimize your risk? Aside from the usual security advice of using strong passwords, avoiding the use of the same password for different sites, refraining from clicking on strange links in emails, these are some of the best practices for individuals to adopt to prevent an attack:


1. Download a password manager, such as Keeper, Dash-lane, or LastPass.

2. Use a VPN.

3. When clicking links in an email, hover over the link to make sure the address matches the URL you’re trying to visit.

4. Make your social media accounts private.

As a business, there is even more you can do to mini-mize the risk of an attack:

1. Establish security practices and policies to protect sensitive information. Create policies on how employ-ees should handle and protect personally identifiable information and other sensitive data. Clearly outline the consequences of violating your business’ cybersecurity policies.

2. Educate employees about cyberthreats and hold them accountable. Ensure that your employees are aware of online threats and how to protect your busi-ness’s data, including safe use of social networking sites. Employees should be informed about how to post on-line in a way that does not reveal any trade secrets to the public or competing businesses. Hold employees accountable to the business’s Internet security policies and procedures.

3. Employ best practices on payment cards. Work with your bank or card processors to ensure that the most trusted and validated tools and antifraud services are

being used. Isolate payment systems from other, less secure programs and do not use the same computer to process payments and surf the Internet. Also, October 1 is the deadline set by major U.S. credit card issuers to be in compliance with the transition to safer, more secure chip card technology, also known as EMV.

4. Control physical access to computers and network components. Prevent access or use of business comput-ers by unauthorized individuals. Laptops can be partic-ularly easy targets for theft or can be lost, so lock them up when unattended. Make sure a separate user account is created for each employee and require strong pass-words. Administrative privileges should only be given to trusted IT staff and key personnel.

5. Create a mobile device action plan. Mobile devices can create significant security and management chal-lenges, especially if they hold confidential information or can access the corporate network. Require users to password protect their devices, encrypt their data, and install security apps to prevent criminals from stealing information while the phone is on public networks. Be sure to set reporting procedures for lost or stolen equip-ment.

The most effective way to manage cyber attacks is by utilizing the right preventative methods, having a disas-ter recovery plan, and putting insurance in place that will help cover the losses associated with a cyber attack.

Number 1Rank of hackers as threat to

emerging exposure to businesses.

4,000Average number of cyber attacks per day on

businesses last year – the most common being ransomware and wire transfer fraud -

according to the Department of Justice.

$350/hourThe costs associated with even the

most basic attack can range from computer forensics ($350/hour), data breach attorneys

($350/hour), public relations firms ($250/hour), lost customers, and business downtime.


By the NumbersThe dangerous disconnect: Cyber insights for small business

According to the Small Business Admin-istration, a small business generally is one that has less than 500 employees. The SBA reports there are 28.8 million small busi-nesses in the U.S.; which accounts for 99 percent of all businesses.

For instance, a Soybean processing plant can have up to 1,000 employees while a Home Health Equipment Rental business can have up to $32 million in revenue.

And yet, there is a dangerous disconnect happening in the small business world in relation to cybersecurity – small businesses just don’t think the threats apply to them. More than half say that they don’t store any valuable information, but in reality, they do and they are responsible for the protec-tion of that data including email addresses, phone numbers, and billing addresses.

CYBERSECURITY INsight

Small Businesses report that only:

38% regularly update software solutions

31% monitor business credit reports

54% store billing addresses

If a company has a password policy,

65% of those companies report that they do not enforce it

16% admit that they only received their cybersecurity procedures after they were attacked

25% of business have a cyber risk insurance policy

But they are being attacked:According to the National Cyber Security Alliance:

50% of small businesses have experienced a cyber attack

>70% of attacks target small businesses

60% of small and medium-sized businesses that experience a data breach go out of business after 6 months

>75% of employees leave their computers unsecured

87% do not have a formal WISP for employees (written internet security policy)

60% do not have a privacy policy that employees must comply with when they handle customer or employee information


Top 5 Cyber Statistics

1. Cyber crime damage costs to hit $6 trillion annually by 2021. It all begins and ends with cyber crime. Without it, there’s nothing to cy-ber-defend.

2. Cybersecurity spending to exceed $1 tril-lion from 2017 to 2021. The rising tide of cyber crime has pushed information security (a sub-set of cybersecurity) spending to more than $86.4 billion in 2017.

3. Cyber crime will more than triple the num-ber of unfilled cybersecurity jobs, which is predicted to reach 3.5 million by 2021. Ev-ery IT position is also a cybersecurity position now. Every IT worker, every technology work-er, needs to be involved with protecting and defending apps, data, devices, infrastructure, and people.

4. Human attack surface to reach 6 billion people by 2022. As the world goes digital, hu-mans have moved ahead of machines as the top target for cyber criminals.

5. Global ransomware damage costs are pre-dicted to exceed $5 billion in 2017. That’s up from $325 million in 2015 – a 15x increase in two years and expected to worsen. Ransom-ware attacks on healthcare organizations – the No. 1 cyber-attacked industry – will quadruple by 2020.

Source: CSO Magazine

Effects on Small Business

$225 per record = the average per capita cost of data breaches in 2017

Cause of data breaches

Risks and vulnerabilities

> 75% of all legitimate websites contain unpatched vulnerabilities

> 80% of cyber attacks are perpetrated via weak or stolen passwords

44% of security alerts go uninvestigated due to the overwhelming amount of information received by security officers

1 in 131 emails contain malware – the highest rate in five years

6x more likely – corporate accounts are more targeted than personal ones

Middle of the work week = when most cyber attacks happen, because scammers can easily contact prime targets via email

Sources: Symantec, Panda Security, Cisco, Rapid7

52% malicious or criminal

attack 24% human error

24%system error

What type of attacks did your business experience? (more than one choice permitted)

Web-based attack 49%

Phishing/social engineering 43%

General malware 35%

SQL injection 26%

Compromised/stolen devices 25%

Denial of services 21%

Advanced malware/zero day attacks 14%

Malicious insider 13%

Cross site scripting 11%

Ransomware 2%

Other 1%


Captives offer a long-term, sustainable health insurance solutionBy John Turco

HEALTHCARE INsight

John Turco is Senior Vice President, Employee Benefits at Rogers & Gray Insurance. He can be reached at (508) 747-2513 or [email protected].

We all know that health insurance is expensive. One can safely bet that it’s one of the top three expenses in any employer’s P&L statement.

With the cost of health insurance growing to unsustain-able levels, employers are desperate for a way to control this expense. Healthcare costs are predicted to reach $30,000 for a family of four by 2020, according to a 2016 Benefits Benchmarking Survey.

We also know that talent follows compensation and benefits. A competitive benefit strategy is a requirement for companies looking to attract the best employees. A funding approach that offers cost savings, plan design creativity and responsiveness, is an essential part of an employer’s objective to recruit and retain top talent.

Many employers are finding that the solution lays with-in medical captives. The medical captive is a health insurance plan that is controlled by its employer participants. Multiple employers pool premium and self-insure an individual and shared amount of prede-termined risk.

Employer participants of the medical captive program purchase insurance the same way they do in the stan-dard market. Like standard health insurance, a medical captive program requires infrastructure for the effective administration and reimbursement of claim payments. This includes a claims administrator, network of med-ical providers, reinsurance and an insurer to issue the policies.


The real key to the medical captive is the shared risk lay-er. A portion of each employer participant’s reinsurance premiums do not go to a reinsurance carrier. Instead those premiums are retained by the captive to fund the shared risk layer. This accomplishes two key goals. First, it lowers the cost of reinsurance with the spread of risk. Second, most large claims are completely fund-ed through the shared layer, not the reinsurance carrier. Therefore, those large losses are “smoothed out” and do not result in erratic reinsurance premium increases.

The medical captive functions like any other insurance company and reports to its owners (employer partici-pants) its financial performance with premium earnings, loss payments and expenses. These positive underwrit-ing outcomes would normally be retained by the health insurance company in a fully-insured environment. How-ever, within a captive, underwriting profits are returned to its employer participants, further reducing cost over traditional health insurance coverage.

Not to be understated, transparency and control is also

delivered within a medical captive. Controlling claims cost can only occur when the information or data is available. Not knowing where the costs are coming from effectively prohibits a solution to an employer’s rising health insurance costs.

Participating members also realize results that surpass their traditional insurance because of the shared in-centive the members have with each other. Unlike the traditional insurance transaction where you pay your premium and your losses are largely irrelevant to you, a captive member contributes capital to a risk bearing enterprise that is dependent on the group’s claim expe-rience. Each employer participant has real “skin in the game.” The incentive is there for the member to police its claim activity more diligently.

Cost containment efforts are stimulated as the medical captive members share and apply best practices for the delivery of Rx, medical procedures, wellness and early identification of severe claims.

The medical captive functions like any other insurance company and reports to its owners (employer participants) its financial performance with premium earnings, loss payments and expenses.


Case study: Cape Abilities

EXPERIENCED INsight

2017 Options

2016 Expiring Premium – $1,372,872

2017 Fully Insured Increase – $1,865,735 (Difference = $492,863). This represented a 35.9% increase. No oth-er options were available in the fully funded insurance marketplace.

This was not affordable to the organization or employ-ees.

We reviewed all the options with them: change of plan design, deductibles, and the Self-Funded Health Care Captive.

2017 Proposed Solution

Rogers & Gray Insurance Agency has access to a Self-Funded Health Insurance Captive and, as you can see from the chart below, this represented a significant savings option for Cape Abilities over the fully insured renewal costs.

We received a quote from our Captive Underwriting Team with matching plan design and they did not have to change health insurance providers. Cape Abilities had BCBSMA’s third party administrator – Blue Benefit Administrator – paying claims.

Overview and History

Cape Abilities is a large nonprofit dedicat-ed to serving individuals with disabilities on Cape Cod by educating, counseling, and providing residential, therapeutic, so-cial, and employment support. They em-ploy roughly 230 staff members and offer a robust Employee Benefit package. Their health insurance program is the most cost-ly benefit to the organization.

The health insurance renewal increases outlined below were quickly becoming un-affordable to the organization.

2014 Renewal - Fully Insured with Blue Cross Blue Shield of MA +7.5% increase. Moved to THP at -7% decrease.

2015 Renewal - Fully Insured with Tufts Health Plan +15.6% increase. Moved to BCBSMA at +4% increase.

2016 Renewal - Fully Insured with BCB-SMA +14.9% increase. No other options available. Renewed.


2017 BCBSMA Fully Insured Renewal Cost Proposal

2017 Self-Funded Health Insurance Captive Cost Proposal

= $155,478 monthly renewal cost – a 35.9% requested rate increase.

Expected = $113,498 Max = $133,154

2017 Choice:

Self-Funded Health Insurance Captive

2017 Results:

Estimated savings over the Fully Insured Renewal: $34,167 per month, subject to final audit.

Cape Abilities ran at +6% above the expected number. This is a fantastic result.

2018 Self-Funded Health Insurance Captive Proposal

Expected = $127,216. Max. = $150,650.

Even if Cape Abilities runs 6% above expected in 2018, that number ($134,849) is still 14% below the 2017 BCB-SMA Fully Insured Renewal.

The BCBSMA Fully Insured Premium in 2018 would have

been over $2,000,000, based on average renewal in-

creases.

The captive solution offered:

• No plan design changes

• No carrier changes

• No rate increase to employees

Items to consider when thinking about Self-Funded Health Insurance:

Cash flow – Having reliable cash flow and funds to fulfill

the duties of sponsoring a plan is imperative to the suc-

cess of a self-funded option. Weekly varying premiums

vs. a set monthly fee are the norm.

Administrative Tasks and Burden – There is a higher de-

gree of involvement from Finance and HR when related to Self-Funded Health Insurance Captive plans vs. a fully insured plan. The initial year is the most challenging as both departments settle into the new routines and rela-tionships with the third party administrator.

Contact John Foley with questions.


Insurance for insurance: The global reinsurance marketplace

By John Gaynier

REINSURANCE INsight

John Gaynier is Partner and Executive Vice President at Rogers & Gray Insurance. He an be reached at(781) 936-4309 or [email protected].

With momentous weather events in recent years in-creasing, it’s important to consider the implications of climate change on the global property reinsurance mar-ketplace.

Reinsurance, also known as insurance for insurers or stop-loss insurance, is the practice of insurers transfer-ring portions of risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. By spreading out the risk in this fashion, insurers can re-main solvent by recovering some or all of the amounts paid out to claimants.

With the 2017 storm season being one of the worst storm seasons in history, the global reinsurance market place will be impacted for years to come. These cata-strophic natural disasters and weather events can leave behind lasting and expensive property damage and bil-lions of dollars that need to be paid out to claimants.

The record number of major hurricanes, earthquakes, wildfires, and hailstorms made 2017 the third-most ex-pensive year for insured losses. This includes hurricanes in the United States and Caribbean, wildfires in Cali-fornia, earthquakes in Mexico, and hail storms in Texas. In 2017, there were more than $400 billion in losses – translating to $135 billion in insured losses, most as a result of Hurricane Harvey and Hurricane Irma.

The effects of these recent natural disasters on proper-ty cannot be underestimated, and after this record year of losses, global property reinsurance prices were ex-pected to rise – however, initial price increases were less than expected in January 2018.


Generally, global reinsurance renewal dates are January 1, April 1, and June/July 1 each year. January 2018 rates showed an increase of 5 percent to 7 percent globally, which was less than expected. April 2018 reinsurance re-newals also rose less than expected and continued the trend of single-digit increases. This means that reinsurers will try to obtain more rate increases on future renewals.

The two major forces holding premium increase at bay are insurance-linked securities and fierce competition for businesses. Insurance-linked securities (which act as capital in the insurance market) are financial investment products that are valued based on catastrophic loss events. Insurance-linked securities were first introduced to the financial market in 2001 and have seen upward growth since and the trend has continued even after the performance of insurance-linked securities products in 2017.

Heavy competition is also a major component holding pricing to less than expected growth. All reinsurers are cautious about losing market share, which is having an impact on the increases that are being achieved. In the United States, the property insurance market is seeing some property insurance increases on properties in coastal areas while non-exposed locations remain near expiring terms.

While global reinsurance isn’t a topic of conversation around most boardrooms, it does have a bottom line effect on insurance premiums for businesses. With wild weather and frequent natural disasters becoming more commonplace, it’s critical to stay abreast of changes in the global reinsurance market and understand the im-pact to your business.

Billion Dollar Disasters*

$198bHurricane Harvey

$102b Hurricane Maria

$65bHurricane Irma

$9.4bNorthern California Wildfires

$1.5b California Flooding

$2.1bMidwest Tornado Outbreak

*NOAA


Creating a‘Best Placeto Work’ By David Robinson

CULTURE INsight

David Robinson is President & CEO of Rogers & Gray Insurance. He can be reached at (508) 790-4127 or [email protected].

A few years ago, I may have modestly referred to our company as “The Best Place to Work in the Galaxy”

I was excited – what can I say?

In truth, we were actually voted the “Best Agency to Work For” in the United States. Not quite as impressive as the galaxy, but we were pretty proud. What I was most excited about was the realization that all the efforts we were putting in to reinforcing and enhancing our culture were truly effective.

Since then, we’ve won a few other awards too – and it’s caused us to reflect on how we got here.

Attracting and retaining talent is a full-time job. In the most recent MetLife 15th Annual U.S. Employee Benefits Trends Survey, 83 percent of employers chose using ben-efits to retain employees as their top objective. And 51 percent said that using benefits to retain employees will become even more important over the next three to five years. The job market is tight, and finding great people who fit into your company’s culture should be a top pri-ority of every CEO.

Where we were

Five years ago, if you asked anyone in our company what our culture was, they would say “It’s like a family.” That was – and still is – true. When someone gets hurt, we rally. When a spouse or a child is ill, we cook, drive, support. I’ve witnessed it time and time again and been a direct recipient of this familial support by our employees.

We also had a list of about 100 core values.

Getting to the meat

Our culture was there, but how does one even begin to enhance it when you have over 100 core values? How could we orient new employees to that? How were we to enhance what we felt, but had not defined? We needed a structured approach to take us from a good place to work to a great place to work.

We were fortunate to partner up with a consultant whose title is Director of Organizational Effectiveness, who serves as a coach and advisor to leaders on behavior-al and organizational challenges. He led us through the exercise of really looking at our existing core values and paring them down to the meaty ones. We assessed what was important, really pushing ourselves to ultimately create our guiding principle and six core values that we could remember and recite

Core Values

Everything we do at Rogers & Gray is governed by one simple guiding principle – to do the right thing for our people and our clients.

At our core, this is what we are about. We strive every single day to live up to that and when faced with a dif-ficult or challenging decision, we come back to it. If the result of a decision is doing the right thing by our peo-ple or our clients, then we know we’re headed down the right path.


Our Core Values became (in no order):

• Client Focused – Customer understanding and advoca-cy is paramount.

• Trust – We have the confidence of our people and our clients.

• Our People – Our employees are the heart of our busi-ness.

• Improvement – We strive to make our organization stronger tomorrow than it is today.

• Personal Leadership – We work to inspire excellence in ourselves and in others.

• Community – Be a good corporate citizen.

What next? Going from good to great

We felt good about all that work. We’d worked hard and thought we were in a good place, but now we had to cas-cade this across our organization.

Here’s a high-level look at the steps we took to go from “good” to “great” – all while adhering to our guiding prin-ciple and core values.

Integrated Core Values into everything – Our annual meeting, our intranet, our shout outs, our giving pro-grams and our decision making. Everything we do is tied back to a Core Value.

Hiring and firing practice – We knew this would be our toughest challenge – particularly with long-term employ-ees who might not have been able to adapt to our new values. And it has been a challenge – but for your Core Values to not be seen as corporate fluff, you’ve got to do the right thing. And sometimes the right thing means letting go of people who don’t live by those Core Values.

Employee Recognition Program – Peer to peer recogni-tion that rewards going above and beyond and is tied to one of our 6 Core Values.

Employee Giving Program – Community is a very im-portant Core Value to us. Through our RGG program, we support our team members’ involvement in commu-nity activities that are important to them. The program includes a donation match, time off for volunteering, community sponsorship of things like little league teams and non-profit organizations, and donations made to non-profits that our employees volunteer for.

Training & Development – Giving our team opportunities for professional and personal growth was paramount to our efforts. We created an academy and have four peo-ple dedicated to the training and development needs of our staff. This was a huge budgetary challenge when we first began it, but we were dedicated to making it sus-

tainable. We internally grow many of our new talented players through the Academy and it’s working. People want to come work here because they know they will be trained and supported.

Constant evaluation of our benefits and offerings – This was a big one. We’re not Google. We’re not a cool, hip tech company offering ping pong tables and unlimited vacation time. We have customer service requirements where our staff needs to be available to clients when they walk in and, sometimes they are in a real crisis.

We also had to look at the benefits package to ensure it met the needs of our 60-year-old employee all the way down to our youngest millennial. We approached the process with the thought that we needed to think holis-tically about how we could support our employee, their wellbeing, and their family.

We reviewed our benefit offerings and added benefits like paternity leave, adoption leave, paid short- and long-term disability, financial planning tools, and 529 college planning to our already robust package that included paid health insurance, profit sharing, and matching 401(k) program.

We also have a Wellness and Ergonomics Committee that is tasked with the physical wellbeing of our employ-ees. We pay for them to participate in organized runs/walks and have a great wellness program that rewards them financially for being more active and healthy.

Monitor, monitor, monitor – You have to keep a pulse on morale. If a computer issue is bubbling up and making it difficult for people to get their job done, fix it. If some-thing is festering, attack it. If someone does something really amazing, celebrate it.

As our employees submit nominations for “best places to work” awards, we do monitor their anonymous feedback to make sure we’re on top of things. We also participate in an employee survey through an industry group we’re involved in. Every two years, we do an in-depth survey, benchmark the results, analyze feedback, and create an action plan for anything that needs addressing. On our monthly senior management agenda we have a “morale” check-in.

The bottom line – it’s not money

It’s work. Plain and simple. But it’s not impossible to grow your culture from a good one to a great one. The results are worth it – and that’s not the awards. It is the fact our staff genuinely cares for one another and we genuinely care for them – a result much more important to us.

The importance of employee benefits

83%Employers who chose

using benefits to retain employees as their top objective

51%Employers who said that

using benefits to retain employees will become even more important over the next three to five years


The expanded role of finance and the CFOReshaping businesses through business intelligence and analytics

By James Lopes

FINANCE INsight

James Lopes is Senior Vice President and Chief Financial Officer at Rogers & Gray Insurance. He can be reached at (508) 760-4632 or [email protected].

In today’s business environment, soft skills, negotiation skills, and communication skills are as critical as tech-nical skills for financial leaders. Finance departments, CFOs, and Controllers must increasingly contribute to-wards the shaping and execution of business strategy, while simultaneously delivering on their traditional re-sponsibilities more and more effectively. Such strategy and execution should include driving the use of data and information to promote more critical thinking.

Progressive finance departments should be positioning themselves to help shape and execute on the strategy of insightful decision making through business and data analytics.

Effective finance departments routinely:

• support the CEO in assessing the marketplace, set-ting strategy and allocating capital resources;

• engage with virtually all operations of a company;

• act as a catalyst for desired behaviors/execution;

• recruit analytical thinkers and critical problem solvers that have been exposed to a multitude of industries and operating models; and

• leverage various technologies within its own opera-tions (e.g., financial ledger, planning/modeling tools, payroll systems, data warehouses, etc.).

A fully functioning financial department will consist of many different areas of expertise. Some of these dis-ciplines may be staffed in-house while others are out-sourced, depending on which is the best solution.

Evaluating and understanding how your Finance De-partment can help meet your organization’s needs

Why might two companies’ financial departments look


different? Quite simply, need. One company’s needs might be very different from another. To understand your organizational needs, CEOs and CFOs need to evaluate some key factors:

• The size and complexity of your company and its organizational structure

• The type of industry you operate in – is it a service/knowledge-based industry? Is it materials/invento-ry-based? Is it highly regulated?

• Are your clients, vendors, operations large or concen-trated, or are they small or very fragmented?

Once you have that deeper understanding, the next steps are to evaluate:

• People – Do you have the right skill sets to meet today’s highly technical, data-driven world?

• Business Practices – Do you have set structures, best practices, protocols and workflows in place?

• Tools – Do you have all the tools in place to help you accomplish what you are setting out to do?

In the case of Rogers & Gray, we came to the realization that after our people and our reputation, data might be our organization’s most valuable “asset.” Carefully man-aging that data – in particular our “operational data” was essential to becoming an “informed” organization. Many people use the terms “data” and “information” interchangeably, however, they are very distinct. Data only becomes information when it is delivered in a way that allows users to understand and act upon it – when it is actionable.

Data modeling and visualization software tools allow us-ers the ability to easily unlock useful information from their data and deliver that information in a format that

is useable, meaningful, and transparent. Over time, the technology to do this has become more robust, more user friendly and more affordable via cloud-based solu-tions. The process is an evolution and must remain on-going. The benefits are initially seen in both productivity and access to information not previously available. An insight driven organization embeds analysis, data and reasoning into the decision making process every day.

What’s in store for the future

Blockchain, Internet of Things, artificial intelligence, ro-botic process automation, the breaking down of indus-try boundaries (Google cars, Amazon Health Care) are all here. CFOs, controllers and finance teams can play a key role in framing these technological advances in the context of the company’s overarching strategy by focusing on:

1. What are our key client markets (geographic, client segments, distribution channels, product)?

2. What is our competitive advantage? What do we pro-vide that competitors cannot easily replicate?

3. What key constraints on growth and profitability do we need to push through?

4. What are the greatest uncertainties facing our com-pany and how can we minimize risk?

5. If we double or halve the size of our organization, can we rescale quickly?

6. What do we do currently, that we should not be do-ing?

By following these processes and answering these questions, CFOs and other financial leaders will be able to focus on the most important strategic steps to follow for continued success and growth.


Case Study: Rogers & Gray’s management evolution

By James Lopes

EXPERIENCED INsight

James Lopes is Senior Vice President and Chief Financial Officer at Rogers & Gray Insurance. He can be reached at (508) 760-4632 or [email protected].

Over the past five years, our organization has grown more than 50 percent. Rogers & Gray had to evolve in-ternally to adapt to the size we had become, and better position ourselves for future growth.

How did we do that?

• People – have the right people with the right skills and competencies

• Organization – have the right people solving the right problems by structuring business practices, proto-cols, and workflow

• Better tools – including cloud-based Software as a Service that quickly deploys reliable, scalable, low-maintenance solutions

We also came to the realization that after our people and our reputation, data might be our organization’s most valuable asset. Carefully managing that data – in particular our operational data – was an essential re-quirement to becoming an informed organization.

So in 2013 Rogers & Gray migrated our Enterprise Sys-tems to more customer-centric applications. The follow-ing year, our finance department led a formal Data Gov-ernance initiative. Data Governance is a term that refers to the overall management of the availability, usability, and integrity of data employed by an organization.

But our ultimate goal was always to transform our sys-tems’ underlying data into actionable information that


our team could use to develop successful business strat-egies and run our operations well. Many people use the terms data and information interchangeably, however, there is a distinct difference between the two. Data can be any character, text, words, number, pictures, sound, or video that, without context, means little or nothing. But information is useful and typically delivered in a way that allows it to be understood and acted upon.

Finally, by early 2017, we were ready to select and imple-ment a business intelligence software tool. The finance department led a deployment plan that identified a structure for system administration, end users, training, and building out of the reporting. Because our chosen solution operated much like Excel, which many of our employees were already accustomed to, the learning curve was relatively brief.

Adoption of the new tool remains ongoing, but its ben-efits are already being demonstrated in both productiv-ity and access to information not previously available. Before our business intelligence system, operational reporting consisted of spreadsheets, requiring data be manually extracted and converted into graphs and pre-sentations monthly. It was labor intensive and cumber-some, so reporting was only done monthly. Therefore, when a business question came up, it could take weeks to provide an answer.

Data modeling and visualization software tools allow us-

ers today the ability to easily unlock useful information from their data and deliver that information in a format that is usable, meaningful, and transparent, so much so that end users can drill down as deeply as necessary to get the answers they need. Over time, the technology to do this has improved – it has become more robust, more user friendly, and more affordable via cloud-based products.

Today, our company operates from three Strategic Busi-ness Units that have primary client-facing focus across our nine locations. Our divisions are each supported by central administrative teams with functional expertise in HR, Finance, Marketing, and IT. We operate in an in-dustry filled with a large number of carriers, each with their own sets of forms, processes, and systems and none motivated to collaborate as an industry. But be-cause Rogers & Gray provides service and consultative insurance expertise to clients of varying size and need, it is essential that we can bridge those insurance carri-er gaps and better understand the unique needs of our clients in a thoughtful and intelligent way and align that understanding with how we and our people can best meet our clients’ needs. From customer acquisition to customer service, profitable growth and differentiated customer service requires in-depth insight at all levels of the organization. An insight-driven organization embeds analysis, data, and reasoning into the decision-making process, every day.


The power of the Internet of ThingsBy Peter Cullivan

TECHNOLOGY INsight

Peter Cullivan is Senior Vice President andChief Information Officer at Rogers & Gray Insurance. He can be reached at (781) 936-4339 or [email protected].

If knowledge is power, how powerful do the 11 billion Internet of Things devices allow us to be?

In the early 1990s, the Internet became publicly avail-able and one of its original goals was to connect people. There are currently more than 4 billion users of the Inter-net and the focus has now changed from connecting peo-ple to connecting things – the Internet of Things (IoT).

IoT is Internet-connected intelligent devices that gener-ate data for automating business processes and enable new services. Lighting, security systems, watches, cars, refrigerators, and even heart monitors are all connected through the IoT. They exist in our homes and our busi-nesses and by 2025 are expected to surpass 25 billion devices.

IoT TrendsCustomer Engagement

Manufacturers who make their products “smart” are giv-ing users the ability to interact with their household and business products. This also allows these businesses to be more proactive with their client support offerings as they are monitoring their products, collecting data, and automating action.

Data analytics of critical business processes

There is an old saying, “You can’t expect what you don’t inspect.” IoT devices allow processes to be mea-sured and improved upon. Wearable devices, driving programs, and other sensors that provide monitoring and reporting deliver employers with greater analyti-cal data into day-to-day operations, data that is driving


enhanced productivity, reducing risk, improving time to market, and potentially increasing profits.

Retail becoming personal

Through IoT, it’s now possible to send personalized push notifications to shoppers who are in stores – even aisles – where products that meet their preferences are located. For instance, I love Lucky Charms cereal. I am in the store and it just so happens that the grocery store knows that their inventory of Lucky Charms is starting to age. As I turn the corner to the cereal aisle, I get a notice on my Apple Watch that Lucky Charms are buy one, get one free today. Sold! And the Lucky Charms inventory doesn’t get wasted. This logic can extend to any product.

Opportunities and capabilities are limitless when you look at where IoT is heading, but not without introduc-

ing new challenges. The exposure of these new IoT de-vices to malicious threats increases the risk to customer safety and information security. Private/personal data collected at levels never seen before requires new levels of cyber security to ensure that data safety.

As a consumer, we must be aware of the “who, what, where, when, and why” of personal data being collect-ed. We must first understand what is being collected and then confirm it is protected.

As a business owner, we must treat data as an asset and have appropriate strategies in place to protect it, leverage technologies, processes, and regular testing to confirm the data is always secure. Constant evaluation of the data being stored and understanding its level of exposure is a must. A compromise of this data is an ex-posure to the business that could ruin even the most established brand.

Manufacturers who make their products “smart” are giving users the ability to interact with their household and business products.

69% of organizations have adopted or plan to adopt

IoT solutions within the next year

Top Industries for IoT ImplementationIT Services · Retail · Telecommunications · Healthcare · Education · Manufacturing · Government Source: Cradlepoint


Group captive insurance – risk vs. reward

By Robert Bizak

CAPTIVE INsight

Robert Bizak is Partner & Executive Vice President at Rogers & Gray Insurance. He can be reached at (508) 747-4385 or [email protected].

Group Captive Insurance as an alternative to tradition-al insurance programs can be a very attractive option for the right customer. This program is not for every-one, however. Basically, in a captive arrangement, a pol-icyholder would literally partner with a group of poli-cyholders and form their own company. Participating members would actually be shareholders (owners) of the entity. The group would structure their arrangement with outsourced consultants for legal, underwriting, ac-tuarial claims and of course an insurance company that would actually front and issue the policies. Ultimately, the goal is for the group to take advantage of the under-writing profits that an insurance company would have earned from the group. In addition, the group should benefit by lower overhead expenses. I have seen many captives that have expense ratios that are 10 percent to 15 percent stronger than typical insurance companies. Captive members become less affected by the volatil-ity of hard and soft insurance markets. Outside of the cost of professional services and reinsurance, the loss performance of the group will drive the ultimate cost of insurance.

Captives structure their protection and exposure to loss differently from captive to captive, but all have elements of reinsurance, self-funding, and shared funding expo-sure. It is the job of the groups consultants and captive management firm to make recommendations as to the best structure, but in the end, it’s up to the sharehold-ers of a specific captive to decide how much exposure and or protection they should take. As a captive ma-


tures, gains scale, and an understanding develops of its group’s typical performance, the decisions will be easier. I’m familiar with a group captive that was founded in 2004 and began with a group retention of 35 percent of every loss that occurred. That captive has performed very well over the years and is now at a level where its board of directors recently decided to retain more ex-posure and purchase less reinsurance. They now retain more than 75 percent of the first million dollars of each claim.

There are certainly opportunities for savings, but there is also risk. If an individual shareholder or multiple share-holders do not perform well, they certainly will not indi-vidually reap the underwriting profit benefit they desire. In fact, they will likely need to pay in additional premium to fund their losses. This could result in additional pre-miums that may be 1.5 to 1.75 times the original pay in. These events are always guaranteed by some form of collateral, typically letters of credit or cash. This is done up front and is for the protection of the other sharehold-ers. This is why it is critical that groups are very careful and diligent when they are selecting new shareholders. If they bring in the wrong partners, they will all suffer with reduced returns. However, the right members will help strengthen and grow the group, which should yield some benefit to the expense ratio. I’ve had several captive managers tell me that they all understand that participants will have losses. The idea is to try to select “best in class” partners. Even the very best performer shouldn’t kid themselves and simply look at the attrac-

tive returns. They should be realistic and plan for having a bad year approximately every fourth year. Plan that your premium may be higher than what you may have done in the standard guaranteed cost marketplace for roughly one out of every four years.

What does a good prospective captive shareholder look like?

• They should have a very strong safety culture.

• They should have average annual loss ratios in the 40 percent range or lower.

• They should have a strong financial position. They must have the ability to pay their premium, post col-lateral for several years, and, typically, well-capitalized companies are not as likely to cut corners when it comes to operations and safety.

• They should view the captive insurance approach as a long-term strategy. This is not the type of strategy that companies should move in and out of. There can be a very long trail to receive dividend returns.

• They should generate a fairly significant level of pre-mium. Most captives don’t make sense unless a pol-icyholder generates premium in excess of $300,000 for Workers Compensation, General Liability and Automobile.

• They should be totally engaged and involved in the performance and management of the captive. This generally helps the company enhance its safety cul-ture and ultimate performance.


Voluntary benefits are a key retention toolBy Reggie Rolles

BENEFITS INsight

Reggie Rolles, CPIA, is Vice President, Employee Benefits at Rogers & Gray Insurance. He can be reached at (508) 209-6057 or [email protected].

Employee benefits are near the top of the list when it comes to recruiting and retaining quality employees. However, most business owners are daunted by both the administrative and financial resources needed to create and maintain a comprehensive benefits portfo-lio for their employees. By utilizing the services of in-surance experts, these plans can pay dividends when it comes to finding and hiring the right people for your business and keeping those people for the long term.

Employees tend to value benefits that are geared to their individual circumstances – which includes tradi-tional products like health insurance, and also expands to voluntary benefits.

Voluntary benefits can include short- and long-term disability insurance, supplemental life, vision plans, payroll-deducted auto and home insurance, and the in-creasingly popular critical illness. Benefits considered “must haves” by employees include:

• life insurance – 61 percent

• dental insurance – 68 percent

• accident insurance – 44 percent

• prescription drug coverage – 71 percent

• long-term disability – 43 percent

• short-term disability – 41 percent

For employers looking to help employees by filling in the gaps left by high-deductible health plans, voluntary options like critical illness and accident coverage can be valuable benefits for employees.


More innovative programs such as telemedicine tools can encourage good health and reduce costs by allow-ing employees to seek more efficient treatment before health problems become serious. Businesses can also offer voluntary benefits that help employees achieve financial stability (and thus reduce stress and increase productivity), such as student loan refinancing, debt repayment, credit score improvement and financial ed-ucation for future planning. Companies that have a ben-efits education strategy coupled with a voluntary bene-fits offering are highlighting the company’s investment to their employees. At the same time, they are protect-ing their business by securing their employees’ financial security, resulting in a more stable workforce.

Voluntary benefits are important because they offer companies innovative ways to off-set the increasing cost of health insurance. In addition, they provide em-ployees ways to have financial security and wellbeing; which helps in recruiting and retaining great employees.

This type of investment in employees will always pays dividends, especially when it comes to avoiding the costs associated with heavy turnover, namely hiring and training new employees.

By giving employees strategic options to take advan-tage of tools that can improve their lives in a variety of ways, voluntary benefits can lead to a happier, more productive workforce – and one that has strong loyalty to your company.

Benefits considered “must haves” by employees include:

life insurance – 61 percent

dental insurance – 68 percent

accident insurance – 44 percent

prescription drug coverage – 71 percent

long-term disability – 43 percent

short-term disability – 41 percent


Q&A with HRBy Allison McEachern

HUMAN RESOURCES INsight

Allison McEachern is Senior Vice President and Chief People Officer with Rogers & Gray Insurance. She can be reached at (508) 209-6060 or [email protected].

What benefits are subject to ERISA?

Whether a benefit offered by an employer is subject to the Employee Retirement Income Security Act of 1974 (ERISA) will depend upon whether the benefit is an “employee welfare benefit plan” pursuant to §3(1) of ERISA. Employee welfare benefit plans include, but are not limited to, any plan, fund, or program established or maintained by an employer, employee organization, or both, that is maintained for the purpose of providing (through the purchase of insurance or otherwise) med-ical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death, or un-employment. Vacation benefits, apprenticeships or oth-er training programs, day care centers, and scholarship funds are also included.

Some common ERISA benefits include, among others, medical, vision, dental, life, long-term disability (LTD), and accidental death and dismemberment (AD&D) plans; health flexible spending accounts (health FSAs); certain disease-specific plans, such as cancer plans; health reimbursement arrangements (HRAs); certain employee assistance plans (EAPs); certain short-term disability (STD) coverage (depending on funding); pre-scription drug benefits, and certain wellness programs.

Is a small owner-only business eligible for group med-ical insurance? At this time, our company is comprised of me (the owner) and my wife. There are no other em-ployees yet, but we plan to hire employees in the fu-ture. Can we buy a group policy now or do we have to wait until we have other employees?

The question of whether a “mom and pop” business can purchase medical coverage as a group often comes up. Each state’s insurance laws control the type of policies that can be sold in that state and also defines who is a “group.” Insurance laws vary from state to state, but generally a husband/wife business does not qualify as a group if there are no other employees. There must be at least one W-2 employee who is not an owner or busi-ness partner (or spouse of an owner or partner). In the meantime, the owner may apply for an individual poli-cy to cover himself and spouse (and eligible children, if any).

As a business owner, what do I have to be mindful of during the holidays to reduce potential exposure to re-ligious discrimination issues?

Pursuant to Title VII, employees with sincerely held reli-gious, ethical, or moral beliefs, including those with tra-ditional, organized religious beliefs, are protected from discrimination. This protection extends to all aspects of employment, including hiring, firing, pay, promotions, assignments, training, and benefits.

Here are things employers should keep in mind during the holidays to reduce potential exposure to religious discrimination issues:


Time Off Requests

Title VII requires employers to reasonably accommo-date an employee’s religious beliefs or practices. Em-ployers may need to make small adjustments to the work environment to accommodate its employees’ re-ligious practices, however, an employer is not required to make an accommodation if doing so would create an undue hardship.

Undue hardships may result when an accommodation is costly (more than a minor, or de minimis, cost), com-promises workplace safety or efficiency, infringes on the rights of other employees, or requires other employ-ees to complete more than their fair share of potential-ly hazardous or burdensome work. Furthermore, if the accommodation request violates the terms of a collec-tive bargaining agreement, it may also create an undue hardship for the employer.

It’s a good idea for employers to evaluate their staff-ing needs in advance of religious holidays to determine how to accommodate requests for time off for religious practice.

Activities at Holiday Parties

An employer’s obligation to consider diverse religious beliefs extends to religious-themed activities. With lim-ited exceptions as noted below, employees cannot be forced to participate in religious activities as a condition of employment. Ugly sweater contests, snowman dec-orating, and the like are not religious-based and should not cause issues for an employer. Some employers may be exempt from this limitation. Employers that are reli-gious corporations, associations, or educational institu-tions are exempt from Title VII’s religious discrimination provisions.

Decorations at Holiday Parties

Keep holiday party décor non-religious. Nativity scenes or other non-secular décor excludes other religious be-liefs and should be avoided.

A new employee just asked for a raise. She was hired near the top of the salary range for her position to be-gin with, but she is a great employee. How should we approach this?

First, schedule time to talk with your employee about her request. Listen to her reasons to better understand her perspective and needs. You may learn that when she accepted the salary six months ago, she believed that the job would be smaller in terms of responsibili-ties and workload. Or you may learn that she has been approached by one of your competitors and has been offered a similar job with higher compensation. This conversation may determine how you handle the pay re-quest. As you learn more about what she is doing in the job beyond the job specifications, you might consider re-evaluating the position, which could trigger a higher pay range. If you are in a competitive bidding situation

and don’t want to lose this good employee, you may consider some form of pay change, bonus opportunity (to avoid the salary range concern), or additional stock options or other perquisites.

If there isn’t a special circumstance triggering her re-quest, take the time to explain how pay is handled in your organization. If your pay practices are clearly out-lined and transparent to all employees with an expla-nation about how raises are handled, such as pay raise frequency based on a set schedule, work performance, and/or the incumbent’s position in the salary range, then describe when and how she can raise her pay in the future.

In addition to addressing the compensation issue, this is the perfect coaching opportunity to help your employee understand how she can develop and grow within your company, professionally and personally, and highlight other factors beyond compensation that your compa-ny can provide to her. In all cases, talk with her. Simply shutting down her request could result in her shutting down, becoming less productive, and eventually moving on. Express to this employee your appreciation for her hard work, and explain your rationale and procedures for raises with the hope that she will feel validated and understand how she can work toward an increase. Give her a clear understanding of when her pay will be re-viewed with the possibility of increase. If an increase is dependent upon certain conditions, such as sales or production goals, make the discussion an opportunity to be clear about what is expected of her in her role with the company.

Sometimes we must close our office due to bad weath-er. Are we required to pay our staff for the entire day if they’re not working?

If a nonexempt (paid hourly) worker leaves prior to the end of the workday, then the employer would only need to pay for the time that the employee actually worked. However, if employees are exempt, then you would need to pay them for the entire day.

We heard through the grapevine that one of our staff members is quitting to pursue another career, but we don’t know when. Can we let them go before they re-sign?

Especially in employment at will states, the employer has the right to decide who works at the company, but best practices would dictate that you speak to the em-ployee to gauge what his/her intentions are and under-stand the reasons why they are considering leaving.

Depending on the conversation, it may be that the em-ployee is not someone you would want to retain and you can schedule a meeting to inform him/her that the un-certainty surrounding employment status impacts the company and workload plans. The employer can then develop a transition plan to find a suitable replacement or move forward with termination immediately.

PRIVATE CLIENT GROUP877.511.7937 I rogersgray.com

rogersgray.com

Just like your collections, our relationship will continue to appreciate in value.The Private Client Group knows there are many

things in life that can be replaced. We also know

that trust is not one of them. So building

meaningful relationships is critical to us.

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Few executives fully understand the cost of their HR practices. Use this tool as a quick indication of your weak spots and financial growth opportunities.

How much did bad hires cost over the last 12 months? Use an average of 1:1 ratio of their annual pay. For example, an employee with a $50,000/year salary will cost $50,000. .....................................................

How much did losing any good employees cost over the last 12 months? Again, use at least a 1:1 ratio. ..................................................... What would be the bottom-line impact of improving total productivity by only 5%?Use 5% of total payroll. (For example: $1,000,000 x .05 = $50,000) .....................................................

What is it costing you to keep poor employees? (Here’s the test: If they quit, would you be relieved or upset?) Use the impact they have on their entire team in your calculation. (For example: team payroll = $240,000 x .05 = $12,000) .....................................................

What “bang for the buck” are you getting for any benefits paid?What if you improved that figure by 2%? (Use a benefits cost of 35% of payroll. For example: $350,000 x .02 = $7,000) .....................................................

What added costs are you paying with your annual workers’ compensation modifier due to your risk management and return to work practices? (For example, a MOD of 1.2 means you pay more than your competition.) .....................................................

Did you have to manage and/or settle even a low-level employee claim?(Statistically, 1 in 4 get sued every year with an average verdict of $250,000) .....................................................

Your HR cost total: .....................................................

How much revenue will you have to bring in to put these HR dollars back into your pocket? Use at least a 3 to 1 ratio.

Revenue total: .....................................................

This is what your HR practices are costing you at the most basic level. Roughly half of the exposure is “out of pocket,” and the other half is “left on the table every day.” What would you be willing to invest in time and dollars to reduce this number? Would you invest at least 1/10th this amount to start somewhere? As you consider your answer, ask yourself this question: What sales activities and work would you have to do to match that revenue total? (i.e. sell 100 new cars, build two homes, get 50 new patients, book five more installations, etc.)

Now, what are you willing to invest in terms of time and money to reduce this figure?(For example, we are willing to invest $20,000 to reduce this number by $50,000.)

If you’d like to schedule an HR Business Plan meeting, contact Allison McEachern at 508-209-6060 or [email protected]

HR PRACTICE CALCULATORTHE TRUE COST OF YOUR HR PRACTICES


How tosucceed at family business succession planningBy Michael Robinson

SUCCESSION INsight

Michael Robinson is Chairman of Rogers & Gray Insurance. He can be reached at (508) 760-5796or [email protected].

Prior to my brother Dave and I joining the family busi-ness, our father, Chuck Robinson, had a succession plan that included bringing in the next generation of leaders into the company and transitioning the stock owner-ship. The stock transition took eight years, the manage-ment transition about 10, and we spent hours and hours of work with professional consultants. That’s how most people plan for succession, right?

Unfortunately, it’s not.

More than 88 percent of family business owners believe their business will be controlled by a family member for future generations. But only 30 percent of family busi-nesses survive into the second generation, according to the Family Firm Institute, and only 12 percent are viable into the third.

That’s because successful family business succession planning doesn’t happen by accident. It takes years of strategic thinking, tough conversations, countless hours of planning, some hurt feelings, and awkward family holidays.

Rogers & Gray advises family businesses on succession planning in relations to operations and insurance cover-age, but the company itself is a case study in how to do it right. When Chuck bought Rogers & Gray in 1980, it had 12 employees. When he retired at the end of 2014, there were 120 employees and his children involved in the business with one additional partner.

There were so many questions that needed to answered as we planned for his retirement:

• Who would be the boss? Is the oldest child automat-ically considered the heir apparent?

• What about other stakeholders? Are senior managers involved?

• Who will be the face of Rogers & Gray to our staff?

• What is my company worth and can I retire on it? Do I put my children in debt to buy me out?

• Will they screw it all up?

Chuck had a goal and a vision for what he wanted. Al-though retirement wasn’t the key driver for him, the key was for him to “get out of the way” (his words, not mine!) so that the company could go to the next level. The goal was to set up the right ownership and man-agement team to allow for his retirement and that plan-ning process began before my brother and I were even involved in the business.

Stakes are high

According to SCORE, the nation’s largest network of volunteer business mentors, family businesses employ 60 percent of the U.S. workforce and create 78 percent of all new jobs. Last year, 47 percent of family business owners reported that they expect to retire in the next five years, but do not have a succession plan.

The stakes are high when talking about transitioning a


business – we did not want to be responsible for anyone losing their jobs, exactly the opposite, in fact. Our goal was to grow the business and add to the workforce.

Outside help

Once his goal and vision were set, he went about assem-bling his team. Outside advisors are a critical compo-nent of any successful succession plan. You simply can-not do it right without some outside help to guide you.

Our key advisors included:

• Business Consultants. Ours began work about eight years ago plotting the future from an organizational chart standpoint.

• Business Analysts from the leading industry group.

• Business Appraisal Firm and Legal Firm. They helped with the valuation of shares of the company.

• A Shrink. Legitimately, a PhD. Therapist. We spent many hours on the couch working through the com-plexities of the situation – particularly between my brother and me.

• A Business Coach. After all the work we put into this transition, it was this professional that allowed Dave and I to reach complete alignment. We are closer now than we have ever been, both personally and profes-sionally.

The final weeks

Those final weeks leading up to Chuck’s retirement were incredibly exciting and nerve-wracking at the same time. We were now going to be fully responsible for the success of our company and didn’t want to become a

statistic – one of the 70 percent of family businesses that don’t survive into the second generation. But we made it through, and to Chuck’s credit, he was able to step away – allowing us to thrive on our own.

This process certainly wasn’t perfect, but Chuck’s ulti-mate vision was set and his careful planning set us up for success. Though we have significant debt, it isn’t to the point where we can’t reinvest in the growth of our company and our people. What’s next?

Three years later, we’re constantly evaluating and tweaking our business to grow and have managed not to screw it all up. We’ve added almost 40 new positions to the company and project to add another 80 by 2025. Our own succession planning continues – even though we’re not even close to thinking about retirement.

We’ve recently expanded our partnership group – add-ing an additional partner to Rogers & Gray who brought a tremendous amount of value to our organization through his progressive thinking and exceptional sales acumen.

We have hired, position by position, a world class senior management team. We recently executed on an incen-tive program for this group to empower them and give them a stake in the future success of Rogers & Gray.

I called my father Chuck until I was 36 years old. Be-cause of his thoughtful planning, wise mentorship, and the willingness to bring in outsiders to help guide our course, our relationship is stronger than it has ever been and I now just call him Dad.

Family business statistics:

60%Amount of U.S. workforce employed

by a family business

78%Amount of new jobs created

by a family business

47%Family business owners expected

to retire in the next five years


Managing your company’s automobile risk By Jeffrey Cotto

AUTO INsight

Jeffrey Cotto is Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (508) 760-4621 or [email protected].

Due to higher medical costs associated with claims, poor employee driving records and the increased costs to re-pair vehicles, Commercial Automobile Insurance has been less profitable for insurance companies in recent years. Thus, insurance companies are tightening their under-writing guidelines and looking closely at companies’ fleet safety programs and employee driving records, to deter-mine what rates to apply to the company auto insurance policy. A strong Fleet Safety Program can protect your company and allow you to negotiate favorable rates from your insurance provider.

Company Fleet Safety Programs should include criteria needed for an employee to drive a company automobile, procedures for obtaining driving records for all new hires and current employees, a policy regarding the use of cell phones, a personal use policy, disciplinary procedures for repeat motor vehicle violations and auto claims, and pro-cedures to follow in the event of an accident.

Driving Records – When you interview a potential em-ployee that will need to drive a company auto, you should require the employee to provide a copy of their driving history, going back at least five years. The employee can request a copy of their driving history from their person-al insurance agent or the Registry of Motor Vehicles. You want the employee to provide the record to you – don’t rely on your insurance agent to provide this information. Due to privacy laws, this can be an issue. A copy of all cur-rent employees’ driving records should also be collected once a year and kept in their file.

You should have predetermined criteria for acceptable driving standards. If the driving record provided does not


meet these criteria, do not hire the person for a position that requires driving a company automobile. Also, this candidate should not be hired and allowed to drive their own automobile for work for liability reasons. A person with a long history of poor driving should be a red flag. You may hire the person for a position that won’t require them driving company autos.

Unfortunately, we can’t control what employees do out-side of work. It is important to run all employees’ driving records on an annual basis, to make sure their driving his-tory has not become an issue. Employees may not volun-tarily share the fact they received a DUI over the weekend or that they got their third or fourth speeding violation this year. When a claim occurs and the driver has a poor driv-ing record, attempting to assert that you didn’t know will not help your defense and could cause an issue with your insurance company.

Personal Use Policy – Many companies need their em-ployees to take a company automobile home at night. Having a written and signed personal use policy in place is important. The personal use policy should spell out what is acceptable personal use and limit the use of the company automobile to the employee only.

You do not want friends or family members in the vehicle. Do you want to see your company automobile at the local tavern on Saturday evening? Along with the personal use policy, include a section prohibiting the use of cell phones while driving. Have the employee sign and date that they have read and accepted these polices. Place this in their file with a copy of their driving record.

Tips and Resources – GPS systems are a great tool for

your company to monitor your fleet. Many of the systems will alert you when a vehicle leaves a location, experiences excess speeds, or hard braking occurs. You can use this tool to coach and monitor drivers who have had accidents in the past or need some correction in their driving habits. Mileage can also be tracked so that you will know when the automobile needs to go in for scheduled service.

One of my client’s GPS tracker notified them that a com-pany van, which should have been home with an employ-ee, was parked at the local mall parking lot at midnight. The owner of the company went to the mall and found his employee had been living in the van after being evict-ed from his apartment. Another employer had an em-ployee who was a no-show to work for several days. The employer was able to locate the company vehicle parked more than a hundred miles away. The employee had gone to rehab without notifying his employer or bringing the automobile back.

You also can utilize this information to create incentive programs to reward drivers with excellent driving histories and no violations over a certain period, and to enforce pro-bation or loss of driving privileges for repeat offenders.

Your insurance agent and insurance carrier often can pro-vide fleet management tools and resources upon request or point you in the direction of resources. Fleet safety can have a positive impact on your auto loss history and im-prove your ability to secure coverage and favorable pric-ing from your insurance carrier. Companies who do not implement certain safety guidelines and procedures will see higher premiums and the possibility of the insurance company non-renewing or excluding problem drivers.


Claims Made vs. Occurrence Form: Which type of professional liability policy should you have?

By Eric McLaughlin

PROFESSIONAL INsight

Eric McLaughlin, AAI, is Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (508) 209-6067 or [email protected].

Professionals in a variety of industries take steps to arm themselves with professional liability insurance, also known as errors and omissions insurance, should a client relationship take a turn for the worse. Professional liabili-ty covers the actions, advice, mistakes, and/or omissions of the professional if a client files a lawsuit alleging that the professional’s guidance has led to a damaging situ-ation.

There are two primary policy forms for Professional Lia-bility Coverage – the Claims Made Form and Occurrence Form. Many types of professional liability coverage, in-cluding Directors and Officers, Liability and Employ-ment Practices Liability, are written primarily on a Claims Made Form. Here are some differences between the two forms:

Occurrence Form

When a policyholder has an Occurrence Form, an inci-dent that occurs during the policy period will be covered by that policy, regardless of how many years later the claim is reported. Incidents that occur before the oc-currence form policy is issued are not covered. An Oc-currence Form is not tied to a retroactive date for prior acts coverage and an Extended Reporting Period (also known as a tail) endorsement is not necessary in the event the policy is cancelled or not renewed.

Claims Made Form

When a policyholder has a Claims Made Form, a claim that is made against the insured is covered by the policy in force at the time the claim is made. A retroactive date is usually established as the day the very first Claims Made policy is issued. All subsequent renewal policies use the same initial retroactive date. Claims occurring before the original retroactive date are not covered.


When a policyholder decides not to renew a Claims Made Form, an Extended Reporting Period endorsement may need to be purchased. This endorsement does not need to be purchased if:

• The policyholder switches insurance companies and remains on a Claims Made Form with the new compa-ny keeping the same original retro date.

• The policyholder switches insurance companies and goes on an Occurrence Form which is endorsed with a “Prior Acts” endorsement as of the original retro date.

Benefits of an Occurrence Form

• No need to buy Extended Reporting endorsement.

• More consistent premiums.

Disadvantages of an Occurrence Form

Because a claim can sometimes be filed 10 years or more after a professional liability incident, the policyholder may have the following uncertainties:

• Tracking which Occurrence policy in the past will respond to the claim just filed.

• The former insurance company may no longer be sol-vent. If the insurance company filed bankruptcy, the policyholder would have to rely on state Guaranty Funds, which usually provide lower limits and services.

• Whether the past policy now has adequate limits due to inflation.

Benefits of a Claims Made Form

• Initially, less expensive than Occurrence form, espe-cially in the first four years. After five years, the Claims Made Premium levels off and become consistent with Occurrence Form policies. The lower cost for the first four years is especially attractive to professionals just starting their career.

• Flexible – recently increased limits and broadening endorsements will apply to past incidents that are reported under the current policy and occurred after the retro date. For example, $500,000 per occurrence limit may have been considered adequate when a Claims Made Form was first issued years ago. Today, $1,000,000 or even $2,000,000 may be considered adequate due to inflation. If a Claims Made policy is endorsed today to $2,000,000 limits, these higher limits will apply to a covered incident that may have happened two, five, 10 years ago or more.

• Less uncertainty as to the current company’s financial stability. Coverage can be switched to another carrier with no lapse of coverage if your agent determines the current carrier is in financial difficulty.

Disadvantage of a Claims Made Form

• Need to plan for Extended Reporting Period endorse-ment when deciding not to renew a Claims Made form. A Rogers & Gray consultant will guide you when or if an Extended Reporting Period endorsement is need-ed. You will also receive formal written notice when your Claims Made policy lapses or non-renews to remind you of your need to investigate your need for this endorsement.

• All claims from a prior policy period will be applied against the current policy year. If there are multiple claims that come to light they all apply against the annual limit of the current policy.

When evaluating professional liability coverage, remem-ber that there is no difference in the breadth of coverage provided by either form, rather, the difference lies in what activates the policy to respond – the occurrence of injury or damage or a claim (as defined by the policy) arising out of the injury or damage.


EAPs and theopioid crisis By John Foley

BENEFITS INsight

John Foley is Vice President, Employee Benefits at Rogers & Gray Insurance. He can be reached at (508) 258-2217 or [email protected].

The disheartening thing about opioid addiction is that it does not only affect the addicts, but it also affects everyone and everything involved with them – including the workplace. There’s no questioning that when some-one is abusing opioids that they are not at the top of their game. Not only can this pose productivity prob-lems in the workplace, but it can also cause safety is-sues as well.

Businesses that offer EAP services agree that the pro-grams they provide are of great benefit to the work-place. They report:

• 40 percent decrease in lost time

• 60 percent reduction in sickness and accident benefit

• 50 percent decline in filed grievances

Studies also show that replacing employees costs be-tween six to nine months of their salary. For exam-ple, if your business tries to replace an employee who makes $100,000 a year, it will cost between $50,000 to $75,000 in training and recruiting costs to fill the va-cancy.

Businesses that implement EAP services for opioid ad-diction cover the gamut of treatment options tailored to the intricacies of this type of addition. So, it makes recovery and returning to work much simpler than oth-er programs. This includes detox from opioid addiction, intensive counseling, and medication replacement ther-apy.

This approach has proven to show positive ROI, averag-ing about $1.49 on the low side to $13 on the high side for every dollar invested in the program.

The National Safety Council has gone as far as issuing a call to action for combating opioid addiction in the workplace. They suggest that companies take the fol-lowing steps: offer EAP insurance; re-evaluate your drug policy and your drug testing; invest in management and education; and increase and ensure confidential treat-ment.

Opioid addiction’s effects on family members and how EAPs can help

If your employees have family members who are ad-dicts, those employees can suffer at work too. This also has a negative impact on the workplace. Those who are affected by a loved one’s addiction also have increased absenteeism, lack of focus, and health problems related to stress.

When employers offer counseling services to combat these issues, employees develop a sense of trust instead of that feeling of shame that is so often associated with addiction.

FAQs about EAPs

Do EAPs work or are they just a “feel-good” benefit?

Employee Assistance Programs help employees by offering them various services that primarily focus on


their mental health and well-being, while the employ-er enjoys the increased productivity that comes with a happy, mentally stable workforce. While that may seem “feel good” – the good certainly wins in this case partic-ularly in light of the current opioid crisis and the affect that is having on families and businesses.

What do EAPs do for the workplace?

EAPs are designed to offer immediate counseling to em-ployees that may be facing emotional and mental issues. These problems may be caused by stress, a condition like depression or anxiety, substance abuse, problems at home, and other sources of mental and emotional dis-comfort. Often, an employee affected by one or more of these stresses won’t want to turn to their employers and alert them of the problem(s) because they don’t want other people to know or they fear of losing their job.

While EAPs are offered through the company, the coun-seling and support received by these programs are al-ways from a third party. This guarantees confidentiality and helps make this form of assistance more approach-able by troubled employees. The hope is that these counseling options will help employees get back to feel-ing stable and happy to show up to work each day.

Why would an employer offer an EAP?

Businesses want happy employees and benefit from the services provided through an EAP because they help to ensure that employees get the help they need to remain mentally ‘in check.’ When over-stressed or depressed employees are in a state of despair, they are much less productive, more likely to be absent from work and there is a higher chance of them quitting. All of these adverse effects hurt a company’s bottom line. Thus, by offering

an EAP and resolving many of these issues that would otherwise go unnoticed and unchecked, businesses can improve their bottom line and help their employees at the same time.

Are they effective?

So, the real question is, do these programs achieve this goal of helping both employees and employers? While there is some research on this subject, most of it is un-qualified or has been conducted by an EAP provider and thereby draws a lot of criticism for being biased. That said, the consensus seems to be that these programs do work as intended, but there are some small issues to consider as you think about implementing an EAP.

The first is that employees are not always made aware of these programs, which makes them vastly underuti-lized in some companies. Employers that invest in an EAP need to make an effort to notify and remind em-ployees of its existence and many benefits.

The second biggest issue is professionalism of the EAP providers. You must do your research and partner with a non-biased third party who will not turn confidential information over to you as an employer. The very nature of an EAP demands privacy and you should only work with a reputable firm.

EAPs do work, but they come with their own set of chal-lenges. To get the most out of this service and its abil-ity to keep employees emotionally happy and thereby more productive and loyal, you have to educate your employees on the program and its intended purpose. This means absolutely guaranteeing them their privacy and confidentiality when utilizing the program.

The benefits for companies offeing EAPs:

40%The decrease in lost time

60%The reduction in sickness and accident benefit

50%The decline in filed grievances


Consider construction coverage to protect projectsBy Gregory Deems

CONSTRUCTION INsight

Gregory Deems, CRIS, DSDP, is Senior Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (508) 209-6068 or [email protected].

As people look to develop or renovate a building proj-ect, there is a category of coverage they need to con-sider. The main components involved are builder’s risk and general liability, and each is important in making sure that you have the coverage you need to remain protected from a property or liability loss.

Builder’s risk is the component of coverage that acts like a property policy during the course of construc-tion. It covers materials to be installed as well as any-thing already installed in its final resting place until the certificate of occupancy is obtained for the project. Builders risk is rated on the amount of construction happening based on labor and materials. It will pay for a covered loss at any point during construction to the structure or materials on site (potentially in transit as well, if you have the appropriate endorsements). There are a number of different coverages that can be part of a builder’s risk, and how items are valued is important.

Projects being built from the ground up are general-ly more straightforward than renovation projects. The budget for a new construction project covers every-thing you will be installing, so arriving at the value is much simpler. In renovation projects, you need to con-sider the existing structure as well. It’s important to en-sure that you have sufficient coverage for the parts of the structure that you will be retaining. You also want to ensure that the policy you have is rating the existing structure on replacement cost. Some policies will rate the existing structure on Actual Cash Value, which can be next to nothing once depreciated, depending on the age of the building.


Many builder’s risk policies are also written without consideration for soft costs. Soft costs are those ex-penses not directly related to the actual construction that you can incur if there is a delay. These can include increased insurance costs, re-permitting or engineer-ing, loan interest, or re-leasing expenses. They can also be written to include loss of rent due to a delay in opening that are necessary to make payments on the financing of the project.

Another common coverage that is overlooked is equip-ment breakdown coverage. Typically, the forms will ex-clude things like equipment failure or electrical arcing, and the coverage will make sure that if something hap-pens to the mechanicals in the building during testing and commissioning, they will be replaced. Mechanical systems like HVAC can be costly and the coverage is inexpensive, so it is something that should always be included within the policy.

Once your builder’s risk coverage is in place, you need to consider your general liability for your project. As the project owner, you have some exposure during and after the project completion – even if you have an agreement with the contractor. One of the most com-mon coverage concerns with the owner’s interest gen-eral liability is the lack of completed operations. The easiest test as to whether you need this coverage is what will happen once the project is completed. If you will not be holding on to it yourself, in the same entity name, then you will need completed operations. Be-yond that, you need extended completed operations through the statute of repose. Each state has different laws regarding the statute of repose, but this statute

will dictate how long you can be held liable. If, for ex-ample, the general contractor who managed the proj-ect for you went out of business or missed a payment on their policy and if they were providing your cover-age through a hold harmless policy, then you would no longer have any coverage either. Extended com-pleted operations coverage basically keeps your policy in force through the statute of repose, to protect you against any claims that might arise. If you don’t have this endorsement, once the project is completed, you will not have any coverage for anything that happens after the policy ends.

There are also non-construction related exposures that can arise where the general contractor will not have any responsibility to the claim, such as a trip and fall outside the construction zone. In those cases, the own-er will be named, and without your own policy, you will have no coverage. In the end, you should work with an agency that is familiar with these coverages and policies to ensure that you have all necessary endorse-ments to protect you and your project.

Some policies will rate the existing structure on Actual Cash Value, which can be next to nothing once depreciated, depending on the age of the building.


What’s ahead for flood insurance?By Joseph Rossi

FLOOD INsight

Joseph Rossi, ANFI, CFM, is a Flood Specialist at Rogers & Gray Insurance. He can be reached at (508) 258-2103 or [email protected].

With an estimated flood insurance protection gap of $40 billion in 2017, an emerging private insurance mar-ket has evolved. A great deal of caution needs to be taken when trying to protect your property from one of the most unpredictable perils. Where will the flood insurance market take us in the next 20 years? Only one thing is certain – it is a road of uncertainty.

It’s been said that government involvement in insur-ance offers a large opportunity to private markets. And while that may seem to be the case as federal flood insurance rates rise, Congress will always have the fi-nal say. The National Flood Insurance Program is the federal government’s flood program. It’s where most Americans get their flood insurance, and it celebrates 50 years in 2018. The program was designed to give artificially low rates to homeowners who would other-wise depend on disaster assistance, and therefore tax-payer money, to recover from a flooding event. When Congress passed the NFIP in 1968, flood had been ex-cluded from almost all major private insurance cover-ages. But now, the private market wants a shot again.

Reinsurance and non-admitted companies are looking to invest hundreds of millions, based on the belief that NFIP premiums have skyrocketed too high, leaving room to compete. Additionally, they believe their tech-nology can better model flood risk than the NFIP can.


But there’s an obstacle: NFIP grandfathering provisions. In the NFIP, grandfathering keeps rates low if you’ve had a policy for a long time or built your house to the correct standards. But currently, if you leave the NFIP for a private policy, you can lose the lower rates from grandfathering since the federal flood pro-gram doesn’t recognize private flood insurance. Con-gress has proposals that will make grandfathering con-current from the NFIP to private policies. It remains to be seen if the stalemate in Congress can be resolved to amend the issue.

An additional challenge lies with the willingness of lenders to accept private flood insurance policies. The Biggert-Waters Flood Reform Act of 2012 attempted to help guide lenders on the best way to accept pri-vate flood insurance to meet the federal requirements. Biggert-Waters amends the Flood Disaster Protection Act of 1973 to make a definition for private flood in-surance to meet the mandatory purchase requirement. Section 102 of the FDPA states “flood insurance cov-erage which is at least as broad as the coverage pro-vided under a standard flood insurance policy under

the national flood insur-ance program” will be sufficient to meet the requirement. However, this has caused more confusion for lenders. What does “as broad as” mean? The regulatory

agencies (FDIC, OCC, etc.) have yet to issue their reg-ulatory guidance for lenders, instead hoping for Con-gress to act.

FEMA has also pledged that while the private markets continue to evolve, so will the NFIP. FEMA has for years talked about risk rating 2.0. The program, a total rede-sign of FEMA rates, is now slated for a phase in starting in 2020. This will bring rates much closer to the true risk of a structure, and more competitive with private market practices. FEMA is also committed to making new insurance products and revolutionizing the NFIP for the next 20 years and beyond.

So, while there are challenges on the road to a robust private flood market, we will eventually get to a place where the NFIP is part of the marketplace, rather than being the marketplace. This will take time and an evo-lution over a period of years to find creative solutions to covering the always unpredictable peril of flood.

$40,000,000,000 Flood insurance protection gap in 2017


Case Study: Consolidating coverage to avoid gaps

By David Nommensen

EXPERIENCED INsight

David Nommensen is Vice President, Personal Insurance/Private Client Group at Rogers & Gray Insurance. He can be reached at (508) 790-4415 or [email protected].

Most successful people have larger portfolios with di-verse and complex insurance needs. I frequently work with clients who have various, dissimilar polices – often in multiple states – collected along the way as they ac-quire assets. And after reviewing their portfolio, I repeat-edly find inadequate coverage or gaps, leaving them with serious exposure. It’s vital to holistically review the entire collection of our client’s insurance coverage to assure the polices are complementary and compre-hensive, and to avoid major interruptions or shortfalls in coverage.

In this case, a client came to me with three homes, each insured with a different carrier and different insurance agency. One of the homes was out of state.

Additionally, they had multiple cars, insured with stan-dard carriers, a $1 million umbrella policy, and two boats.

The critical piece for proper risk identification is to have a comprehensive understanding of our clients’ assets and how those assets are used to identify their liabili-ty exposures. A single knowledgeable agent – with the ability to see how all the pieces fit together – can identi-fy gaps or missing coverage, see the target areas of per-sonal liability and adjust as needed. For example, two of the homes were titled in trust, however the polices were not — resulting in potential exposure.


After meeting with them to review all of their cov-erage, and spending the time to get a clear un-derstanding of their as-sets and how they use those assets, we chose to consolidate coverage with one of our high-net-worth carriers, providing many additional bene-fits.

By removing the variables with their prior mixed bag of carriers, it gave us predictability when it comes to a claim. And consolidating their automobile coverage with the carrier resulted in multi-car and cross-policy discounts, resulting in a better policy and coverage at a lower carry cost.

Additionally, a common mistake when selecting umbrel-la coverage is to simply match the net worth based on a balance sheet or simple net worth calculation. This pro-cess does not take into consideration any streams of on-going income from current employment, future invest-ments, partnerships, etc. – all of which are collectable.

In this case, the client participated in two boards, which

were uncompensated but presented potential personal exposure. The clients also had domestic help in the home. It was clear neither of these el-ements were addressed in the current umbrella policy.

Another sizeable per-sonal exposure was that

one of their children away at school with a family car. Unfortunately, youthful drivers are at the top of the list for liability claims and, again, this was not addressed in their current umbrella policy.

After gaining an understanding about how this client lived their life with all its moving parts, we increased the umbrella policy coverage to $10 million.

Once we completed a holistic review of the clients’ fi-nancial situation and lifestyle, they ended up with a broader, more comprehensive coverage plan, a single agency point of contact for support, and simplified ad-ministrative work with an overall lower cost.

And as important, a better understanding of their own insurance.

The problem:1 Child away at school

2 Boards3 Homes

3 Different agencies3 Different carriers


By the Numbers:#metoo

The spotlight on sexual harassment and EPLI insurance

In the wake of the scandals involving Matt Lauer, Harvey Weinstein, and hundreds of other individuals accused of sexual harass-ment, the insurance industry is expecting a flurry of suits related to Employment Prac-tices Liability (EPL).

Allegations from individuals who claim to have been victimized by colleagues and employers have been flooding in since the #metoo movement first gained momentum and it’s no wonder with surveys reporting an average of 60 percent of American women reporting being harassed at work.

Employees who previously had felt intim-idated or who feared retaliation, are now empowered to speak up.

EPLI INsight

71% of women did not

29%of women reported sexual harrassment

Statistics prior to #metoo report that:

In Massachusetts, the MCAD (MA Commission Against Discrimination) reported that in the first quarter of 2018:

2x increase in claims filed in January

400% increase in claims filed in February

MCAD requested emergency additional funding to han-dle the additional claims

Sexual harassment is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964. Title VII applies to employers with 15 or more employees, includ-ing state and local governments. It also applies to em-ployment agencies and to labor organizations, as well as to the federal government.

According to the 2017 Equal Employment

Opportunity Commission (EEOC), there were:

84,254 total number ofworkplace discrimination charges

$398 million in payments awarded

Hollywood and the entertainment industry are clearly leading the pack when it comes to workplace harass-ment violations, but no industry is immune. Over the last 20 years, employee lawsuits have risen roughly 400 per-cent with wrongful termination rising 260 percent. Em-ployers are much more likely to be sued by an employee than have a property & casualty claim.


Who is sexually harassing?

75%say they were targeted by

male coworkers

49% say they were harassed bymale clients or customers

38% say the were harassed by

male managers

10%say they were harassed by

female coworkers

The results exceed 100% because some respondents have been harassed in multiple situations

Source: Cosmopolitan.com Workplace Survey

And it’s not just the big guys:

Approximately 41% of employee lawsuits are brought against private companies with fewer than 100 employees.

$75,000 the average cost of settling out of court.

$217,000 the average jury award if you go to court and lose.

Not carrying EPLI insurance can be a very costly error.

Breakdown of reasons for charges being filed:

Retaliation 48.8%

Race 33.9%

Disability 31.9%

Sex 30.4%

Age 21.8%

National Origin 9.8%

Religion 4.1%

Color 3.8%

Equal Pay Act 1.2%

Genetic Information .2%

Retaliation = HarassmentAnti-discrimination laws also prohibit ha-rassment against individuals in retaliation for filing a discrimination charge, testify-ing, or participating in any way in an inves-tigation, proceeding, or lawsuit under these

laws; or opposing employment practices that they rea-sonably believe discriminate against individuals, in vio-lation of these laws.

Women’s Personal Experience of Unwanted Sexual Advances

Overall

Has happened 54%

Has not 46%

At work

Has happened 30%

Has not 68%

From someone who had influence over their work situation

Has happened 23%

Has not 75%

Infograph: Source: ABC News/Washington Post Poll

. . .

Employers are much more likely to be sued by an employee than have a property & casualty claim.

. . .


EPLI and 3rd party tenant discrimination coverageBy Zachary Fagiano

DISCRIMINATION INsight

Zachary Fagiano is Assistant Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (508) 790-3669 or [email protected].

In 2016, there were 28,181 reported complaints linked to housing discrimination in the United States per the Na-tional Fair Housing Alliance. These claims can range in size and severity but all have a central theme: they are very expensive and time consuming to fight. In an era where discrimination, bias, and equal treatment are fre-quent topics of discussion, political debate, and citizen activism, it is important for owners of rental real estate to understand and realize the inherent risk with renting their properties in terms of abiding by the Fair Hous-ing guidelines. Additionally, it is the responsibility of the landlord or manager to keep up with modifications to the Department of Housing and Urban Development’s regulations, further complicating an already complex matter.

Most insurance policies for real estate portfolios do not offer coverage for this type of discrimination suit. It is important for any owner of real estate to understand that there is coverage in the marketplace to protect landlords, managers, and their employees in the event of a claim related to tenant discrimination. Regardless of how frivolous a suit may be, there is still a cost asso-ciated with the defense and fighting of a lawsuit that no owner wants to incur. Here is where insurance can come into play, specifically with an Employment Practices Lia-bility with Third Party Tenant Discrimination policy.

Employment Practices Liability Insurance protects a business owner in the event of a lawsuit arising out of their practices as an employer – for example, in the event of a sexual harassment or wage per hour claim. These policies can be broadened, usually via endorse-ment, to cover suits brought against a business owner


by customers, vendors, or clients. In the case of rental real estate, the customers or clients are the tenants and the cov-erage extends over the owners employees. The policy will pay to defend the insured when a suit is brought against them alleging discrimination by the insured or one of their employees. De-pending on how exten-sive the coverage is, it may pay just to defend the insured in court, or it may pay to defend and any punitive damages resulting from a suit. Of course, the broader the coverage, the higher the premium, but these poli-cies are not nearly as ex-pensive as a discrimina-tion lawsuit can end up being. A quick look at the U.S. Department of Housing and Urban Development’s website reveals just how ex-pensive these cases can be: In Minnesota, an apartment complex settled for $82,500 for discriminating against someone who had a support animal to help with ma-jor depression; in Virginia, a landlord paid $361,000 for someone who had a support animal to help with ma-jor depression; in Virginia, a landlord paid $361,000 for

$82,500 Settlement paid by a Minnesota apartment complex

for discriminating against someone who had a support animal to help with major depression

$361,000Paid by a Virginia landlord for charges linked to

racial and family status discrimination

28,181 Reported complaints linked to housing discrimination

in the United States per the National Fair Housing Alliance in 2016

charges linked to racial and family status dis-crimination; and a Con-necticut landlord settled for $115,000 for disability discrimination. None of this factors in the repu-tational hazard a lawsuit like this brings or the cost of increased HUD oversight.

Any owner of rental properties should con-sider the high risk of not protecting against tenant discrimination claims. While an investor, developer, or manage-ment firm might never consider them at risk because their policy is always to abide by fair housing, they must fac-tor in that their employ-

ees are all an extension of the business owner and one wrong word can bring a suit against them. As the top-ics of equality and bias become even more prevalent in media, politics, and business, the risk associated with tenant discrimination will only increase making cover-age a necessity.


Ordinance or Law Coverage can provide both personal and commercial protectionBy James Higgins and Ryan O’Connell

COVERAGE INsight

Ryan O’Connell is Vice President, Personal Insurance at Rogers & Gray Insurance. He can be reached at(508) 790-4416 or [email protected].

James Higgins, ARM, CIC, LIA, is Senior Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (508) 790-4412 or [email protected].

Ordinance or law insurance is a form of property cov-erage that can apply to both commercial and residen-tial properties. It covers the cost to rebuild a building that has been destroyed, as well as the cost to upgrade a building so that it meets the most up-to-date build-ing codes after a covered loss.

Personal Insurance

Homeowners’ insurance is a contract between the car-rier and the homeowners to replace the home to the way it was at the time of loss, but Ordinance or Law is a form of major coverage that is commonly overlooked. These ordinances can be set by local, state, and federal regulators. Older homes and homes in coastal areas should be sure to have increased Ordinance or Law coverage on their policy. The un-endorsed homeown-ers’ policy only provides 10 percent of the policy dwell-ing limit for this exposure. You can purchase higher limits, such as 25 percent/50 percent/75 percent/100 percent of the policy dwelling limit. The loss that cre-ated the damage must be one of the named perils on the policy.

For example, there is a fire and it causes damage to a home built in the 1930s. The town building inspector deems that the surviving parts of the home must be torn down to adhere to local building codes and bring them up to code. The cost to tear down and rebuild can be a costly endeavor. Without Ordinance or Law, the carrier would not take the code requirements into consideration when adjusting the claim (besides the 10 percent coverage provided) and the property own-er would have to cover the additional expenses out of pocket.


Or, for a home in a coastal area, the building code re-quires the home to be rebuilt using the latest build code regulations including impact resistant glass, strapping, etc. These ordinances can increase the cost to build at least 20 percent to 25 percent. If the policy did not have the increased coverage endorsed on the policy, the expense would be out of pocket. The price can vary by carrier but can figure about 7 percent of the premi-um increase to go from 10 percent to 25 percent.

If a home in flood zone has a fire, because the loss was a fire and not a flood the homeowners coverage would be in place, however, then the homeowner has to build to FEMA specifications, possibly put the structure up on pilings, etc. The un-endorsed policy again would only provide 10 percent of the policy dwelling limit for coverage.

Since building codes change all the time, it is best to keep an eye and ear out in your community when codes change and be sure to update your policy as need be.

Commercial Insurance

Similar logic is at play with commercial Ordinance or Law coverage.

The basic principle of insurance is to put you back to the position that you were, after a covered cause of loss, in a timely fashion. However, what happens when that is not possible? Suppose your commercial building was built several years ago and the building codes in your town or city have changed, and now you have to rebuild according to the new codes? You could poten-tially have a loss to your building that damages more than 50 percent of the building, and the local inspector thinks it would be unsafe to try to repair the building

so he orders you to take the undamaged portion down and start all over under the new building codes. Who is going to pay for the demolition costs and the debris removal costs? Those costs are not associated with re-turning you to your pre-loss condition.

Most business owners are concerned with getting back in operation as soon as possible to minimize a loss of income and the accompanying loss of market share. They are often not aware of these potential scenarios.

Ordinance or Law is the endorsement that you need to add to your commercial property coverages to provide the protection that you may need in order to rebuild your building if there have been substantial changes in the building codes in your area. This endorsement provides for the increase cost of construction, debris removal, and demolition costs.

There are many examples of building owners not be-ing aware of the current building codes and how they will affect rebuilding. If you own a building that is more than 25 years old, it is very likely you could run into a problem.

The Ordinance or Law endorsement is readily available and most companies will work with you to provide the correct amount of coverage to meet your needs. A good course of action would be to pay a quick visit to your local building inspector and then discuss this very important coverage with your agent.

10%Amount the un-endorsed homeowners’

policy provides of the policy dwelling limit for this exposure


Negligent entrustment laws affect commercial automobile coverage By Teresa O’Sullivan

AUTO INsight

Teresa O’Sullivan is Vice President, Business Insurance at Rogers & Gray Insurance. She can be reached at (978) 722-0266 or [email protected].

There has been a heightened focus on commercial auto underwriting due to the frequency and cost of auto loss-es, along with a period of heightened claims severity.

These factors have resulted in carriers looking for price increases to offset poor results in their commercial au-tomobile portfolio.

Lawsuits stemming from vehicular accidents are one of the most expensive types of liability for companies to-day. Litigation, distracted driving, and unprecedented verdicts are just some of the factors impacting commer-cial auto insurance results.

In part, the emerging legal concept of negligent en-trustment has resulted in record-breaking jury awards. One legal action against a company resulted in a jury award of $21 million. Attorneys made the case against the insured based on the premise that “they should have known about the dangers of using a cell phone while driving” – and have taken efforts to ensure anyone en-trusted with a vehicle used in business pursuits did not have access to one. Even though their driver was using a hands-free device in compliance with state law, the court contended that the company should have prohib-ited use of cell phones, knowing that drivers experience a cognitive distraction of 37 percent when using one while operating a vehicle.

A company can be held liable if it can be demonstrated that the company was negligent in the entrustment of a vehicle to a driver or if an accident occurs due to a vehicle “condition.”

Companies are not held to the standard of “knowingly putting others at risk,” since most states impose liability


when an employer knew, or should have known, that an employee was unfit to drive or a vehicle unsafe to op-erate. A company must be able to show that they did everything reasonably possible to prevent an accident.

There are many ways that a company can close the loop of “everything reasonably possible.” The best practice for reducing risk emanating from the use of business automobiles is to ensure that anyone charged with driv-ing is carefully screened and qualified. In addition to having a formal policy in place, there must be care tak-en to follow those practices without exception. When there are violations to company policy, corrective action should be taken immediately and documented. Human resources and legal counsel should be consulted to eval-uate qualifications for employees being hired for driving responsibilities. What are the parameters for suspend-ing those responsibilities? Can that employee be reas-signed to a non-driving position?

Best practices recommend the following safeguards to mitigate, or at least defend, lawsuits alleging negligent entrustment of commercial automobiles:

• Create job descriptions encompassing the require-ments of a job that include driving, include certifica-tion requirements to operate vehicles;

• Ask employees who will have driving duties to submit current SDIP information from the registry before allowing them to drive – in Massachusetts this infor-mation is subject to privacy laws, so drivers must voluntarily hand over this protected personal information;

• Conduct comprehensive pre-hire back-ground checks;

• Make the employment offer contingent upon a post-offer drug test;

• Provide driver training to ensure the employee is trained on the vehicles they will be required to drive;

• Work with HR to establish a policy that will prohibit unsafe driving habits, including actions to be taken to enforce violations of that policy;

• Establish and enforce strong cell-phone use policies;

• Enforce vehicle maintenance requirements to be sure maintenance is regularly performed and documented;

• Consider employees who drive less frequently – like those who rent cars during business trips, employ-ees attending off-site meetings, employees who run errands for the company, family members permitted to drive company vehicles, part-time and temporary employees and volunteers – and at a minimum require proof of a valid driver’s license and evidence of an insurance policy with adequate liability limits covering the vehicle being used for business purposes; and

• In the event of an accident, respond quickly to collect and document accident related information. Ensure that records are kept of all correct actions taken during and after the incident.

With common sense business practices, you can limit your company’s risk of exposure to negligent entrust-

ment lawsuits and help to place your-self in a strong position to defend those lawsuits. Establishing and enforcing best practices takes time and discipline, but in the end it is the best protection.

$21,000,000Jury award of one legal action

against a company


New Friends:Creating a network of referral sources

By Michael Redfield

REFERRAL INsight

Michael Redfield is Vice President, Personal Insurance at Rogers & Gray Insurance. He can be reached at (508) 258-2110 or [email protected].

At Rogers & Gray, we recognize that the foundation of our agency is built upon our relationships. Whether you are running a business or are in sales, there is nothing more important then creating an effective network of referral sources you can rely on. Are you in sales and at the mercy of your company to provide you leads? In your slow season, do you feel stressed out because your phone is not ringing? If you experience this, then you need to take back control and start building your referral network. This article will explore some effective ways to get started to help you take your business and sales career to the next level.

1. Start by getting involved: Join local networking groups and, more importantly, pursue your interests. There are meet-up groups for all sorts of activities. The people in those groups may not be direct referral sourc-es, but they will more than likely be able to connect you to friends who are. No time for evening networking events because you have children? Get involved with their sports programs or after-school activities. It is easy to meet a ton of parents if you put yourself out there and take initiative to strike up a conversation and get to know them.

2. Always have the question of ‘How can I help’ in your mind. Ask your referral source what their ideal client is. Learn about what they do. Always have your eyes and ears open to look for ways you can help them. Having a mindset of giving will always pay off more than you can imagine in the long run.

3. Don’t leave the growth of the relationship up to chance. Keep track of your relationships. If you are se-rious about growing your business and you know that your referral relationships are a key to your success, then why not track it as you would any other system


of your business? This is so important because we are all busy. You may just start getting to know what could be a great referral source, but you got tied up on a few projects and all of sudden 6 months have gone by since you last kept in touch. How important does that person feel you think the relationship is? Make sure you are re-cording when you last spoke and what your next steps are. Content emails always help, but nothing can substi-tute for regular face-to-face meetings, with occasional calls just to check in and see how they are doing. The human aspect of the relationship is so important. Get to know people on a personal level so that they know you care about them, not just any potential business they may bring to the table.

4. In order to keep your referral network strong, you must provide excellent customer service. Always have the mindset that each client is so important to your business, no matter how large or small the account is. Treat your customers and referral sources like they are gold and the relationship will stay strong and they will stay with you.

Whether you are a seasoned professional or just start-ing out in business, it is never too late to begin or im-prove upon your referral network. You will be amazed with the results you can achieve just by shifting a little more attention to this area – and you will build lifelong relationships in the process.

The human aspect of the relationship is so important. Get to know people on a personal level so that they know you care about them, not just any potential business they may bring to the table.

The Power of Word-of-Mouthwww.annexcloud.com/blog/2016/03/03/39-referral-marketing-statistics-that-will-make-you-want-to-start-a-raf-program-tomorrow

92%Consumers who trust referrals

from people they know – Nielsen

20-50%Consumers who cite word-of-mouth as the

primary factor behind all purchasing decisions. – McKinsey

54%Amount word-of-mouth has been shown to

improve marketing effectiveness –MarketShare


Personal insurance(auto/homeowners/renters) as a voluntary employee benefit By Eric Labo

BENEFITS INsight

Eric Labo is Vice President, Employee Benefits at Rogers & Gray Insurance. He can be reached at (508) 209-6059 or [email protected].

Once an afterthought by employers, offering voluntary benefits to employees is a now a must for organiza-tions wishing to attract and retain top talent. Not only do these voluntary programs serve to fill gaps in tradi-tional employer-paid plans, they are at the top of the list and factor into total compensation in candidate’s decisions to accept an offer from one company over the next.

One of these voluntary programs that has gained sig-nificant traction and interest in the past few years is payroll deduction of personal insurance (Auto, Home, Umbrella, Renters, etc.). Commonly referred to as “Payroll Deduct,” this is a unique benefit that employers can offer at little to no cost to the employer. It requires minimal involvement by HR and improves the compa-ny’s ability to attract and retain employees through a well-rounded/comprehensive benefits package.

When deciding to add this program to benefit plat-forms, employers should understand that not all of these programs are created equal. Most Payroll Deduct programs are a single insurance carrier option – which means the employee loses the competitive pricing op-portunity. Others offer the program but have a large, impersonal call center to handle quote requests.

There are better options for employers – robust pro-grams that assign one or more fully licensed and knowledgeable dedicated Benefit Consultants to han-dle all employee quote requests and create a relation-ship with the staff. Unlike single-carrier plans, this type of personalized program allows the Benefits Consul-tants the flexibility to quote policies with many differ-ent insurance carriers to find the best coverage at the best price, often saving employees hundreds of dollars a year.

This is possible in states where the Division of Insur-ance allows for competitive pricing. Pricing from one carrier to the next for the same coverage can deviate significantly. Also, depending on the size of the group exclusive employee discounts can be offered with some carriers. These discounts are not available to the general public.

Companies of all sizes and industries participate in Payroll Deduct programs – from large health care op-erations and nonprofits to municipalities and for-profit enterprises.

Advantages to the employer for this type of program:

• Enhances the overall benefits package.

• Minimal investment and administrative expense.

• Aids in the retention of employees and helps attract new employees.

• Dedicated Benefits Consultants work directly with the employees handling service, insurance consult-ing, claims, and complimentary coverage review.


• Direct bill, EFT (electronic fund transfer), and Pay in Full options are also available.

When Rogers & Gray manages a Payroll Deduct pro-gram for an employer, they competitively shop the em-ployee’s policies for them through 13+ companies to help them receive the most competitive premium with-out sacrificing coverage, which takes the burden off of the employee. Once the employee is enrolled in the program, they are assigned a dedicated client manager who handles all of the day-to-day insurance needs. This benefit can be offered on a year-round basis, as poli-cies renew at different times.

By considering the personal insurance needs of em-ployees, a business owner or manager can offer this voluntary program that will help to make their employ-ee’s lives easier, thus making them better, more pro-ductive employees – a win/win for everyone!

“The best thing about this program is that I don’t have to worry about making a payment since it comes out of my paycheck.”

“I like that payments can be deducted right from my paycheck. No checks no stamps. No forgetting!”

• Enhances the employer/employee relationship.

• Helps employees and their families gain financial security by automatically budgeting personal insur-ance premiums making them more stable employ-ees.

• The program is flexible and can be tailor-made to convey the message that you want to tell your employees.

How the program works:

• Home and auto premiums are automatically deduct ed from each paycheck.

• There are no down payments/finance charges/ser-vice fees (if payroll deducted).

• Streamlined enrollment process, everything can be done electronically.

• Benefits team notifies the prior company and the RMV/Mortgagee.


The client experienceBy Erin Schaaf, CPCU

SERVICE INsight

Erin Schaaf, CPCU, is Senior Vice President andChief Operating Officer at Rogers & Gray Insurance. She can be reached at (781) 936-4335 or [email protected].

As the world changes around us at a rapid pace, com-panies cannot simply rely on what has worked in the past. CEOs, COOs, and other operational leaders must strive to take their company to a higher level – and there is no more important focus than the client experience (or customer experience).

This focus on the client experience is a key differenti-ator for organizations striving to create those “wow” moments.

The cost of bad service

According to a survey conducted by New Voice Media, after a poor customer service experience:

• 56% will never use that company again

• 25% will tell friends and family to never use that company

• 20% will post their negative review online

And a Thunderhead survey reports that:

• 59% of customers feel they are in a one-way rela-tionship with a brand and “don’t have a relationship”

Oracle survey respondents state that:

• 80% of consumers begin doing business with a com-petitor following a poor customer service experience

With an estimated $83 billion lost each year due to de-fections and abandoned purchases as a result of a poor customer experience, an effort on the client journey can reduce churn and increase employee satisfaction and customer retention.

What is a client journey?

The days of concentrating on individual touchpoints (billing, service call, onboarding, etc.) are gone, with the focus now being on the entire client journey – that is, a complete beginning-to-end experience that a client has with a company.

The cycle starts with a need that client has and then progresses to:

• Finding and researching your company (Google, Yelp, Facebook, etc.);

• Interacting with your company (in person, chat, call, app, website);

• Making the decision to do business with you and you onboarding them (purchase, contract, down-load);

• Paying you (billing); and

• Continued servicing (in person, shipping and deliv-ery, phone, email);

There are a lot of individual opportunities for success and failure through those touchpoints, and even if each of those is executed seamlessly within their area of ex-pertise, the overall client experience could still be unsat-isfactory due to a disconnect between the departments.

Focusing on the end-to-end journey will result in a seam-less, positive experience for clients and your brand.


One size doesn’t fit all

The client journey isn’t generally a one-size-fits-all ap-

proach. In most companies, there are many customer

segments, and it’s critical to evaluate the data and build

the client journey around the segment needs. Big data

just isn’t enough, though – human interaction has to be

applied, and the combined data and personal touch

should result in a better experience for your customers.

The process of conducting a comprehensive review of

the client experience, seeing yourselves as the client

sees you, and establishing a plan to continue the growth

of your client experience should never stop. By continu-

ally conducting these reviews, your company should be

able to uncover customer pain points across their jour-

ney and address them, as well as locate opportunities to

“wow” clients. It’s especially important to institutional-

ize those mechanisms so they occur regularly. The key

is to educate employees on your vision for client expe-

rience, and include emotional intelligence assessment

and training for them.

The end result is self-aware, socially aware employees

who build relationships with clients and show that they

care for clients. Bringing all the above to bear creates an

atmosphere in which your employees are empowered

and knowledgeable, and clients will trust you, feel good

about doing business with you, connect with you, re-

main with you, and help present you as a leader in the

industry.

$83,000,000,000Estimated yearly loss due to defections and abandoned purchases as a result of a poor

customer experience

59%Customers who feel they are in a one-way

relationship with a brand and “don’t have a relationship”

80%80% of consumers begin doing business with a competitor following a poor customer service

experience

The cost of bad service:

According to a survey conducted by New Voice Media, after a poor customer service experience:

56% will never use that company again

25% will tell friends and family to never use that company

20% will post their negative review online


Home sweet home businessBy Adam Trivilino

HOME BUSINESS INsight

Adam Trivilino is Vice President, Business Insurance at Rogers & Gray Insurance. He can be reached at (877) 504-7192 or [email protected]

Technology has changed the landscape for budding American entrepreneurs. As the continued evolution takes place to expand and connect us in ways we hadn’t even thought of 5, 10, or 20 years ago, more and more people are starting their own businesses from the com-fort of their own homes.

According to the U.S. Census Bureau Survey of Business Owners, 51 percent of all businesses are homebased and according to a GEM Entrepreneurship report, 69 percent of all new start-ups are launched from home.

But as some unlucky homebased business owners are finding out, a homeowner’s policy will not cover the risks of these businesses in most cases, and those who do choose to start a business at home should be think-ing about business coverage.

Depending on the type of business, you’ll need insur-ance to protect the value of your business-related prop-erty from fire, theft, or other perils. Liability insurance also should be considered, as you would want to cover costs associated with someone getting hurt as a result of visiting your business either online or in person. If you’re selling a product, it’s also important to protect yourself in the case of customers being injured by a product your business sells.

When it comes to property, anything a homeowner has for business use is generally excluded from the home-owner’s insurance policy. Many people spend a consid-erable amount of money on a computer and accessories


to make the business run more efficiently. If anything were to happen to these items and they were not cov-ered, it would be a loss for the business owner.

Business coverage can also protect inventory. For ex-ample, a person who runs a homebased cosmetics busi-ness and keeps a considerable amount of stock would be devastated if there were a fire and the loss of all of those cosmetics was not covered. Damage to others’ property, insurance for valuable papers, and several oth-er bonuses are included with business insurance.

Generally, the options for property and liability for a business based at home are:

• A special endorsement added to your homeowner’s policy

• A homebased business insurance policy

• A BOP – Business Owners Policy – which combines multiple types of coverage

Business coverage is designed to protect both property and interests, which is why it is so comprehensive. Peo-ple who are providing advice or non-tangible services and products also will need a professional liability insur-ance policy. This will cover claims based on accusations of bad advice. Another common term for this insurance is errors and omissions coverage.

Other forms of coverage to take into consideration are auto insurance and workers’ compensation. Personal auto insurance may provide coverage for limited busi-ness use of your car. But if the business owns vehicles

Home business statistics:

58% of women-owned businesses were homebased

49% of men-owned businesses were homebased

6.9% of homebased businesses had receipts totaling $250k or more

20% used no start-up capital to start their businesses

51%of all businesses are homebased

69%of all new start-ups are launched from home

or if a personal vehicle is primarily used for business purposes, a business vehicle insurance policy would be needed.

If the business has employees, business owners are also required to obtain workers’ compensation cover-age. Simply hoping that a homeowner’s policy will cov-er a business if a claim is filed will result in frustration if the business sustains a loss. Businesses have higher risk rates than homeowners, so always count on claims being denied if they are related to a business but filed against a homeowner’s policy.


How to ensure you are protected when using AirbnbBy Janet Kliment

FINANCE INsight

Janet Kliment, CISR, is Vice President, Personal Insurance at Rogers & Gray Insurance. She can be reached at (508) 747-4358 or [email protected].

It sounds like an easy way to make money – I’ll just rent out a room, or maybe even my whole home.

We have seen an increase in these types of platforms online with on-demand business models like Airbnb. There are some considerations to take into account, however, before you become a host – with insurance being one of them.

We get this question a lot: “Does my homeowners’ in-surance cover Airbnb or other online rental facilitators?” and the bottom line is no.

Not all homeowners’ insurance policies allow these types of rentals due to their potential liability. When a homeowner (or renter) places a property on Airbnb, whether a room or the whole home, their homeowners’ insurance may have a clause stating that they will not be covered if they are using their home for profit. This Business Pursuit exclusion on a homeowners’ policy is universal for almost all carriers who write homeowners’ insurance.

Airbnb does offer Host Protection Insurance, with cov-erage described as “up to $1M per incident … if a guest is accidentally injured anywhere in a host’s building or property during a stay.” The problem is that the HPI pro-gram has many gaps, including:

• Coverage is limited to $1 million per occurrence;


$2 million per location. The policy aggregate is $10 million for all insured locations in the United States. Shared limits are not your friend.

• Sexual assault, liquor liability, electronic data, and a whole list of other items are excluded.

• Coverage is in excess of any other available coverage. The host must submit the claim to his homeowners’ insurance and the claim must be denied by that com-pany before Airbnb’s insurance will pay. Presumably, the homeowners’ insurance may also be cancelled for business use.

• Any damage done to your home or theft of your per-sonal property may not be covered.

So, what does that all mean in laymen’s terms? Here’s a great example:

What if a guest burns down an entire condo building worth $2.5 million? Even if there is coverage for this sce-nario, anything beyond the initial $1 million offered by HPI would be the responsibility of the host. If the host’s homeowners’ policy declines to cover them, so will the host’s personal umbrella policy.

Therefore, the host would personally be on the hook for $1.5 million.

Be sure to check with your insurance agent before list-ing your home on Airbnb, as some insurance carriers will allow this type of exposure by adding an endorsement to your policy.

And as a consumer of Airbnb, do you really know how safe the property is that you are renting and whether their insurance carrier will pay for your injuries? Airbnb does ask the homeowner to check for certain issues like smoke alarms, trip and fall hazards, exposed wires, and other such items, but they do NOT require home inspec-tions before allowing owners to post their space for rent on their website. Airbnb specifically states in their Terms of Service that the company is not liable, because any-one using the service assumes liability.

Airbnb is certainly experiencing strong growth, but it’s important for you to understand your coverage before using it as a homeowner or renter. You may in fact be putting your insurance coverage and, more importantly, your own financial stability in jeopardy.

“Does my homeowners’ insurance cover Airbnb or other online rental facilitators?”


5 real-life claims that will convince you that you need umbrella insurance By Lynn Mason-Small

UMBRELLA INsight

Lynn Mason-Small is Senior Vice President and Chief Marketing Officer at Rogers & Gray Insurance. She can be reached at (508) 760-4626 or [email protected].

I had never thought once about an umbrella policy until I came to Rogers & Gray as a client. My contact here (pre-employment) knew I hosted parties quite fre-quently at my home – one of my great pleasures. He went on to tell me about the “Social Host” law, how my homeowners insurance didn’t include it, and if someone left my home after a few drinks and hit someone, I could be the one sued.

Whoa! Seriously … this is a thing.

I immediately purchased $1 million in umbrella coverage for $200.

Here are some real life scenarios in which umbrella cov-erage could come into play:

Claim 1: A teen driver stopped at a stop sign to wait for a friend to catch up. The driver put the car into reverse to back up to meet the friend, when the car ran into a jogger. The jogger received a massive head injury, and the total claim was $1 million more than the parent’s pri-mary insurance policy.

Claim 2: A family was hosting a dinner party and gave a few friends a tour of their home before dinner. During the tour, one of the guests tripped and fell down some stairs located in an unexpected area, receiving severe injuries. The guest sued the hosts for $500,000, which was $200,000 more than what their homeowners’ pol-icy covered.


Claim 3: A family was taking a ride in their speedboat, taking care to avoid other boats on the water. However, they didn’t see two individuals floating in a tube near one of the boats. The boat hit one of the individuals on the tube, causing life-threatening injuries. The claim cost was $2 million over the boater’s primary coverage.

Claim 4: In 2014, a 23-year old man was ordered to pay $2 million in damages under the Massachusetts “Social Host” law to the parents of a teenage girl killed in a drunken driving crash. The young woman and her boyfriend, both 19 at the time of the accident, went to a party at the man’s house where they proceeded to drink. When they left his home, the young boyfriend was driving and he proceeded to drive through two stops signs and roll his SUV – killing his girlfriend.

Claim 5: A 28-year-old man dove into a friend’s above-ground swimming pool, struck his head on the bottom, and, as a result, became a quadriplegic. He then went on to sue both the homeowner and the pool manufacturer. Later, the court found the homeowner to be 60 percent responsible and the pool manufacturer to be 40 percent responsible, and awarded $10 million.

It is not always easy to think about the worst-case sce-narios, but it is necessary sometimes – these real-life claims situations highlight the importance of an umbrel-la policy.

Umbrella insurance covers you when your home liability insurance runs out:Example

A group of children is playing on the swingset in your yard.

One of them falls off the slide.

The child’s injuries are serious and require long-term care.

You are legally required to pay $1.2 million in damages.

Your home insurance liability coverage will pay $300,000. Your umbrella policy (if you have one) will pay the remaining $900,000.


The benefits of being an educated healthcare consumerBy John Turco

HEALTHCARE INsight

John Turco is Senior Vice President, Employee Benefits at Rogers & Gray Insurance. He can be reached at (508) 747-2513 or [email protected].

Would you choose to spend $2,500 if you could get the same thing for only $700? Or how about $1,500 instead of $45? I’m not a financial advisor, but those don’t seem like very good choices to me. Yet people continue to do it. If you have a health insurance policy with a large deductible (which most of us do), an MRI will likely cost you $2,500 in a hospital setting. But if you drive just two miles down the road to an outpatient MRI center, you’ll pay a third of the cost. By the way, the MRI will look exactly the same, as if it were done in a hospital setting.

Or how about going to the emergency room because your child can’t stop coughing and the pediatrician’s of-fice is closed? The average cost of an ER visit is $1,500, which will hit your deductible in most cases. Would you rather sit in the ER for four hours and pay through the nose? Or how about going to an urgent care center, where you’ll be out in half the time and pay an office visit copay of $45?

When we buy a car, we research and haggle until we feel we have the right deal in hand. When we buy a set of golf clubs, we visit multiple stores and look online for the best value. Most of us won’t even by a pair of shoes without some sort of comparison shopping! Yet when it comes to healthcare, we just do what we’re told and mindlessly bump around like zombies.

Why? Most people say, “Because my doctor told me to.” So what? If my doctor tells me I need an MRI, he’s prob-ably right. But I can go wherever I want to get it done. Are we afraid to question our doctors? Is it the white coat? The folks behind the makeup counter at Macy’s wear white coats, but I don’t take financial advice from them. My butcher wears a white coat, but I don’t ask him how I should spend my money.

Our deductibles are only getting larger, which means we carry more of the financial burden for our care each year. Take control of your health care spend. It’s up to you. You do have choices and those choices are becom-ing more prevalent and more effective.

Americans spend nearly $3 trillion on healthcare an-nually. Studies estimate that nearly one third of that is wasted on unnecessary care with poor or ineffective outcomes. America outspends all other nations, but it’s 31st in life expectancy and infant mortality. We’re over-testing, over-diagnosing and over-spending.

I’m not saying we should stop taking sound medical ad-vice from our doctors. I’m saying we shouldn’t be afraid to ask questions.

Your doctor is probably a great medical practitioner and knows a heck of a lot more about medicine than you ever will. But that doesn’t mean he/she should be making financial decisions for you. Take an active role in managing your health and your finances.

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MEDIA LIABILITY

TECH E & O

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A NEW DAY. A NEW THREAT.

In good company, success transpires.

When you care about the people you work with,

when you value their time and strive to provide

the best solution in every instance, you can be

sure that the results will get a lot of likes.


an in-depth analysis of the issues facing business owners...

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