Steps to Success in the Insurance Industry

Licensing

Insurance licensing requirements can vary and change often from state to state for both residents and nonresidents. PIA offers detailed information for the states of Connecticut, New Hampshire, New Jersey, and New York in the Licensing Compliance Central section of PIA's website, which may be accessed at https://www.pia.org/irc/licensing. PIA of Vermont members access PIA QuickSource document No. QS44016, titled Vermont licensing and continuing-education requirements.

Below you will find an overview of general licensing considerations each new agency should take into consideration.

Corporate

A separate corporate license is generally required for any insurance agency who is soliciting under a business or corporate entity. This license usually indicates sublicensee(s) who already have an individual license in the same authority and have ownership in the agency. In New York and New Jersey, the sublicensee(s) must have at least 10% ownership in the agency in order to be listed. These sublicensees would be responsible for maintaining the CE for that corporate license.

Some carriers may require a corporate license prior to appointing an agency as their represented agent. The corporate license is documented in the agency-company contract and the insurance company, in turn, gives the agency the authority to write, bind coverages, and receive commissions paid by that carrier.

Individual

Individuals may be licensed in many different authorities which vary by state. Each states' insurance department identifies the types of licenses required to sell a specific type of insurance. See below for each state's licensing authorities:

PIA members have asked the question of whether they should keep their individual license if already listed on the corporate license. PIA has advised that this is an individual, business decision, but keep in mind other states may require an individual and corporate license in your home state, prior to issuing a corporate license.

TBA/DBA

TBAs (trading business as) and DBAs (doing business as) also can be licensed.

Nonresident

Some states require that any time you solicit in their state, you be licensed as a nonresident; that is, when you do not have a physical address in that state. Most states will simply require an application and appropriate fee, provided you can show proof you are licensed in good standing in your home state. If you plan to solicit in several states, you may want to consider working with a licensing firm that actually handles the multiple states' licensing process for you. For a list of firms that offer this service, be sure to review PIA QuickSource document No. QS90501—Multistate licensing exposures.

Name approval

Prior to licensing, some states require any corporation, partnership, limited liability company, or trade name to be filed and approved by the respective insurance department to avoid any deceptive or misleading names. For insurance department name approval information and links, see below.

New York Department of Financial Services: Submit a list of proposed names in the order of preference to New York State Department of Financial Services, Licensing Bureau, One Commerce Plaza, Albany, N.Y. 12257 or email licensing@dfs.ny.gov. Once a name is approved, licensing instructions will be provided.

New Jersey Department of Banking and Insurance, name approval form: http://www.state.nj.us/dobi/insliced/busnameapprov.pdf.

The Vermont Department of Financial Regulation does not have a name approval process for licensees.

Most states also require that a certificate of incorporation or charter from the respective department of state or treasury be included with the licensing application.

Department of state websites:

CSRs

Customer service representatives (CSRs) working in the agency, depending on their duties, may require an insurance license. A CSR working directly for, or on behalf of, a licensee must report to that licensee who will be held accountable for the CSR's actions and activities. See below for details on activities that require a license.

Who needs a license

In general, most states require an insurance license in the appropriate authority any time a person discusses or solicits any type of insurance coverage. Anyone receiving commissions must have a license.

Duties an unlicensed person can do

Most clerical and administrative duties are acceptable, provided that the employee is regularly salaried and receives no commission or other compensation directly dependent upon business written.

Some permissible duties or activities are listed in the following state-specific links:

Continuing education

As a licensed insurance professional, you also have to maintain your license in good standing by obtaining the appropriate number of continuing education credits to renew your license. PIA can help! Our Education Department maintains a list of many of the PIA continuing-education programs you can attend and also offers numerous programs in different venues to meet these requirements. Our traditional classroom programs can be viewed online at:

Also, you have the option of our popular continuing-education approved Webinar programs which can save you travel and out-of-the-office expenses. To learn more, check out: https://www.pia.org/EDU/webinar/. If you miss a particular live Webinar, don't worry. You can order an OnDemand version (without continuing education credits). For a listing of available OnDemand webinars, log on to https://www.pia.org/EDU/webinar/ondemand.php.

For a listing of state-specific webinars:

Another option is our Custom Class programs, which you can offer within your own agency and invite area agencies to attend at a time that is convenient for you. To learn more, contact PIA's Education Department at education@pia.org.

Online insurance CE

Another option for education in some states is online insurance continuing education, which allows you to take an educational program from your computer through the internet. Through our partnership with WebCE, you have access to these quality programs. For more information or to register, click here.

Business planning

Everyone needs to have a plan. As the saying goes, “If you fail to plan, you are planning to fail.”

Think PIA first before you take another step. PIA has several tools to help you start off on the right foot and create the proper plans necessary when establishing an agency.

Agency plans should contain important elements such as: a business plan; a marketing plan; a perpetuation plan, and a disaster plan. All of these are vital for a successful agency operation.

It is important to note that insurance company representatives have stated that agency planning and perpetuation planning were the two most important considerations they look for in an agency appointment, once they are satisfied with a premium volume commitment. These agency plans indicate to an insurance company that the agency can produce the premium volume it is committed to and the perpetuation plan protects the agency. This, in turn, means that the insurance company's book of business is protected as well.

PIA QuickSource document No. QS90035— How to present your agency to a company for appointment discusses all of the plans an agency should have in place before meeting with a carrier for an appointment.

Be sure to check out PIA National's Practical guide to successful planning and the PIA Blueprint for Agency Success (link to PIA National's website, which requires a separate log on).

Business plans

A solid business plan is not only vital to the agency operation; it also gives the opportunity to measure the progress and respond to changing conditions. The ultimate goal for any business plan is to become more successful by expanding markets, cutting expenses, and making more money. Important components of a business plan include a mission statement, strategy, action, and expectations.

The Small Business Administration also offers business planning assistance, as well as an automated business plan template under the Business Planning section of the website at https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan.

Marketing plans

A marketing plan includes an analysis of your agency's goals, methods of marketing, and client base. Review PIA QuickSource document No. QS90035, as noted above for an outline on the contents of a typical marketing plan. Some other valuable resources can be found in PIA's Digital Marketing Materials for Your Agency.

Perpetuation plans

Companies look for an agency perpetuation plan to ensure the continuity of the agency as a viable, independent entity in the event of a change of ownership for any reason. Transferring the ownership of an agency, whether internal or external, involves planning and preparation.

Check out these resources to help with an agency perpetuation plan:

Disaster plans

Did you know that one in five businesses struck by a disaster are not in operation five years later? Many PIA-affiliated agencies have experienced tornados, fires, floods, or other events that could have had a devastating effect on their clients and the agency. Most business owners only consider the major natural disasters or terrorist attacks; however, a business can suffer tremendously by other events such as a computer system going down for weeks, a fire that destroys records, local power outages, localized flooding, a civil authority refusing access to the business due to a riot or other civil commotion, a chemical spill or leak, nuclear accident, or unsafe conditions at nearby properties. To avoid being unprepared, check out these valuable resources to develop an agency plan:

Local Chambers of Commerce

The U.S. Chamber of Commerce has some great resources for a small business just starting. Check out their extensive list of tool kits on various issues from starting a business to sales: https://www.uschamber.com/council-small-business.

To locate your local chamber of commerce, click here.

The Small Business Administration also provides a great deal of support for small businesses on their website at: http://www.sba.gov/. They offer many resources to include a section that helps in planning, starting and managing a business, along with many other tools to support anyone opening a small business.

Dos and don'ts of starting your own agency

PIA offers some insight and considerations when starting an agency in PIA QuickSource document No. QS90099— Tips for opening your own agency—where to begin.

Financial planning

Financial planning is not only necessary to operate your agency efficiently, but it is important to chart your agency's future direction by setting goals to preserve the business. Whether it's working with an accounting system or setting up bank accounts for the agency, PIA has many valuable resources available for members to help. Access PIA's QuickSource document index at https://www.pia.org/irc/quick-source and select your state.

Through the Circle of Consultants program, PIA provides consultants who have expertise in the insurance industry and can assist with financial planning and accounting issues. Most of these consultants offer a free initial phone consultation to PIA members. The Industry Resource Center can provide the consultant's background, fees, and contact information at your request. To submit a request, log on to https://www.pia.org/IRC/circle/request.php.

Taxes

State Departments of Taxation and Finance offer resources including common tax forms for small employers and other small business financial information. Links to their websites are listed below:

The IRS also offers a checklist for new businesses, when to start a tax year, help in determining the right business structure, and much more. Check out their website at http://www.irs.gov/businesses/small/index.html.

Insurance for the agency

Independent agencies not only offer insurance for their clients, but need to carry the proper insurance coverages for their businesses as well. Agencies need to consider insurance coverages such as errors and omissions (E&O), commercial property, commercial auto, and commercial umbrella. If the agency has employees, employment practices liability (EPLI), cyber liability, workers' compensation, group health, dental, life, and long-term disability also may be necessary.

E&O

Almost all insurance carriers or wholesalers require an agency to have E&O coverage prior to any business arrangements. Agencies face a large liability exposure from prospects and/or clients for any alleged error or negligence. Think PIA first to shop for a quote from several E&O insurance carriers. Contact PIA's Member Services Department for more details or to obtain a quote: https://www.pia.org/quote/errorsandomissions?utm_source=productsservices&utm_medium=web&utm_campaign=eandoquote

PIA also has a great resource available, PIA QuickSource document No. QS90525—Agents and brokers errors and omissions, which explains the necessity of and key provisions in an E&O policy and some helpful E&O prevention suggestions.

Be sure to review the E&O section of this tool kit for more information on E&O prevention.

Agency financing

Sometimes agencies have a hard time locating a loan for the agency operation itself. PIA has located some firms that offer insurance agency financing. Contact PIA's Industry Resource Center at resourcecenter@pia.org for more information.

Premium financing

When your clients cannot afford the down payment required to bind their insurance policy, you may have to locate a firm that provides financing for their insurance premium. The Industry Resource Center has a list of firms you can contact for further information.

Trust accounts

There are specific requirements when the agency accepts insurance premium payments from the client. Many states prohibit producers from combining insured's premiums with the operational funds of an agency. Insurance producers need to be aware of these requirements and must ensure adequate federal deposit insurance coverage. For more information on each state's requirements, check out the QuickSource documents below:

Connecticut

New Hampshire

New Jersey

New York

Vermont

Sales and marketing

Sales and marketing is the key to growing your agency's bottom line, but much preparation needs to be done before you can market your agency effectively and within the rules and regulations of your particular state.

This section will address some of the common areas members have needed assistance with that we thought might be beneficial to you in your pre-planning.

Advertising

Advertising is defined as the act or practice of calling public attention to one's products, services, needs, etc. and it is key to your agency's success. Below is a sampling of the tools available to you as an association member that will make advertising your agency as easy as 1-2-3.

Signage and business cards

The advertising of your agency through advertisements, signage, or your personal business cards falls under the insurance advertising statutes and regulations of your state.

Below are links to the advertising rules for each of our states:

Local community services

When considering different approaches for advertising, don't forget to tap into your local organizations. Groups such as chambers of commerce and civic associations are a great way to create an image that you support your local business community while obtaining public exposure. Some other approaches to consider might be giving something back to the community in charitable support, volunteering for a local charity or nonprofit organization, providing consumer education through your local library, schools, or even seminars for your existing clients and prospects such as defensive driver courses.

For more information and links to your local chambers of commerce, see the Business Planning—local chambers of commerce section.

For more information on advertising and marketing, be sure to check out PIA's Digital Marketing Materials for Your Agency

Consumer content

PIA has the content you need to establish your agency as the authoritative, local source for insurance-related answers and coverage. However, the value of content is in how you use it. We can help with both. Our consumer topics below can be customized and designed to fit your agency's brand and existing marketing efforts. PIA Design & Print can design, print (or code), and distribute just about any marketing materials you can dream up—all looking as though they were sent right from your office. For more information, contact Darel Cramer at dcramer@pia.org. If you prefer using generic information, below are links to our consumer fliers are a variety of topics:

Markets

PIA's NumberOne Comp Program

Through PIA, you have access to a monoline workers' compensation market to assist your customers. PIA's NumberONE Comp program, which is available in Connecticut, New Hampshire, New Jersey, New York, and Vermont, offers you an opportunity to place this coverage for those smaller monoline workers' compensation exposures.

For more details on these programs and how to sign up to participate, select your state below:

Wholesalers/MGAs

You also may want to consider working with a wholesaler, general agent, or managing general agent to increase your agency revenue. PIA offers two programs that can assist you. The first is our PIA Appointment Access Program, which was developed to assist agents in developing long-term relationships with these markets and is as simple as answering five questions. We will then send you the contact information for any program participants your agency matches the preliminary criteria for. This is a great way to boost your agency revenue, especially for the newer agency owners. Email a request to PIA's Industry Resource Center at resourcecenter@pia.org.

The PIA MarketBase™ Program is an outlet for those occasional hard-to-place risks and includes nearly 2,100 risk categories from nearly 100 different firms. Simply log on to https://www.pia.org/irc/marketbase and select your state and the type of a risk you are looking to find, and you will instantly see MarketBase™ participants' contact information. We also offer this service through phone-in and fax options as well; simply contact PIA's Industry Resource Center at (800) 424-4244 or by fax at (888) 225-6935, and we will be more than happy to assist you.

Carriers

PIA's Agency-Company Appointment Program brings professional insurance agencies together with companies looking for quality agents. This free service can help you find companies looking to appoint agents in Connecticut, New Hampshire, New Jersey, New York, and Vermont. This confidential database, created and maintained by PIA, catalogs insurer data from company representatives interested in agencies seeking new business relationships. Company contact information will be forwarded to you if you have met the company's general appointment specifications.

Residual-market outlets

Residual-market mechanisms have been set up in numerous states across the country and are intended to assist with markets that standard carriers may not want to entertain due to the particular risk. Each state's residual markets are different as they are developed by state legislatures and offer different types of coverages.

Below are some of the residual-market mechanisms for Connecticut, New Hampshire, New Jersey, New York and Vermont:

Connecticut

New Hampshire

New Jersey

New York

Vermont

Federal

Referral fees

There are numerous instances where an insurance producer may wish to reward another licensee, or a nonlicensed person (i.e., CPAs, car dealerships, etc.) for directing business to them, or referring them to a potential customer. Offering payment, in the form of a referral fee, is generally allowed, but subject to certain restrictions. Typically, it is advisable that a referral fee arrangement be memorialized on paper and the terms, conditions and expectations of the parties be clearly described.

To be sure you are working within the parameters of the laws and regulations regarding referral fees, be sure to check out the following resources:

Niche marketing

Another way to find your place in the insurance marketplace is to consider an alternative approach other than straight direct-marketing campaigns. Some agencies will try to specialize in a particular type of business so they can learn all they can about the trade and not only provide the insurance but possibly loss-control assistance as well. These niche markets could include restaurants, car dealerships, florists, dry cleaners, etc. You also may want to become involved in your local chamber of commerce as this also may provide you with an additional opportunity to network with individuals in the types of businesses you may want to consider.

Office Organization

Setting up an agency office requires planning to maximize space, efficiency, maintain a budget and yet provide the right impression with clients and the community. When establishing an insurance office, it is important to consider several factors such as the physical layout of the office, the furniture and all necessary equipment to operate properly. Whether you have leased office space or purchased a building, each detail needs to be carefully analyzed. PIA has helpful resources available for you to get started in the right direction.

Physical space/layout

The layout of the agency office cannot only make the workflow easier, but it reflects the agency's business philosophy. PIA's QuickSource document No. QS90185— (Nonweb) site planning—how your office is set up is more important than it looks discusses the physical layout of the office and hidden messages you may send to clients with everything from lighting to desk arrangements.

Furniture

Furniture plays an important part of the agency's image. Trying to keep within the agency's budget can be especially difficult when starting out too. It might be beneficial to find used office furniture instead of new.

Here are some websites to help in searching for office furniture, new and used; or to find help with office design:

Equipment

An agency business owner should consider leasing or purchasing the following equipment:

It can be difficult to determine the pros and cons of leasing versus purchasing equipment. The Small Business Administration offers information on buying or leasing equipment.

Here are some websites for purchasing or leasing new and used office equipment:

New

Used

Leasing

Some other options for PIA members are:

For information on agency signs, see the Advertising section under Sales and marketing.

For more information on computer systems, see Technology issues.

Personnel management

Job descriptions

As you start your agency you will need to hire personnel to run it. Well-defined job descriptions are vital to the creation of your agency and to meeting your overall goals.

Once you have defined your personal staffing requirements, you will need to use the defined job descriptions to hire the best employees to meet your needs.

Using the link below to PIA's HR Info Central, you can create job descriptions to meet your overall goals: https://www.pia.org/IRC/hrinfocentral/performance.php.

Hiring

Looking for assistance in hiring? Look no further! PIA's Agency Staffing Assistance Program (ASAP) is a comprehensive and easy-to-use tool kit, which helps PIA members recognize, recruit and train good employees.

You can access the ASAP website by selecting the appropriate state below:

Check out the following QuickSource document to assist you in hiring new employees:

Testing

For a link to various firms that will provide employment background screening, employment verification, personality and aptitude assessment, and drug testing, check out the valuable information below from PIA's Agency Staffing Assistance Program.

Employment background screening resources

Drug testing firms

Personality and aptitude assessment

Using the appropriate interview testing tools will save you time and money in the long run. Be sure to check out PIA QuickSource document No. QS90594— Personality and aptitude assessment firms.

Managing

PIA has put together the following QuickSource document to assist you in managing your agency. When you have a specific question email resourcecenter@pia.org.

Another resource available is PIA QuickSource document No. QS90548—An entrepreneurship to a professionally managed firm.

Compensation benefits

Agency owners need reliable benchmarks to judge how well they’re doing, compared to other similar agencies. But, recent information on agency financials can be hard to come by. PIA offers members some key data from studies of agencies throughout the country, summarized in PIA QuickSource document No. QS90635—Agency compensation & productivity—what the latest studies show.

With the publishers’ permission, PIA extracts comparable figures from six reports and presents them side-by-side for convenient reference. The PIA survey covers compensation paid to owners, nonowner producers and customer service staff; productivity yardsticks; and a few interesting tidbits from the various reports’ overall findings. Also, for your reference, PIA provides information on how you can order the full reports from the National Alliance, Business Management Group and Marsh, Berry & Co.

Group health, dental, life, and long-term disability

When the agency hires employees, the agency will offer other employee benefits such as health, dental, life and long-term disability. Think PIA first for all of your group insurance needs. PIA offers a variety of coverages through the Members' Choice Employee Benefit Program. Contact the Member Services Department at (800) 424-4244 or log on to https://www.pia.org/quote/employeebenefits?utm_source=webps&utm_campaign=memberschoice for further information or a quote.

Contracts

Contracts can be a legal mine-field. Before you sign any contract, look through the numerous QuickSource documents below or contact PIA's Industry Resource Center for our technical staff to assist you.

Employment law

As an employer you are governed by thousands of federal and state statutes, administrative regulations, and judicial decisions that encompass all areas of employer/employee relationships, i.e., employment discrimination; wages; unemployment compensation; pensions; workplace safety; and workers'compensation.

To assist your agency in properly following the individual state guidelines of labor law checkout PIA's HR Info Central employment laws section and PIA QuickSource document Nos. QS90503— United States Department of Labor Law Guide and QS90033—Employment laws affecting small businesses.

Employee handbook

What is an employee handbook and why should you have one?

When you provide your employees with an employee handbook, you are letting them know how your agency operates and what is expected of them by listing the policies and procedures. It will lay out what you can expect from each other as employer and employee. This is a vital tool for any business of any size and can help you avoid employer liability.

Points to consider when creating your agency handbook are provided in the link to PIA's HR Info Central personnel manual section. Access this great tool at https://www.pia.org/IRC/hrinfocentral/index.php#personnelmanual.

PIA QuickSource document No. QS90397—Employee handbooks: a tool to avoid employer liability.

Time management

As the saying goes, "Time is money." Do you have the necessary tools to manage your time effectively? If you have not already done so, you will need to develop a time management system which is designed from a combination of processes, tools, techniques, and methods. Prior to the on-set of any project, large or small, you will need to use the following set of tools to ensure a satisfactory conclusion:

The links provided below will assist you in accessing a variety of articles on time management:

Internal workflow

Procedures manual

Every agency should have a manual for established agency policies and procedures that address agency workflow. To help in creating your own, PIA developed a sample in QuickSource document No. QS90076—Agency policy and procedure manual, which you can adapt to make specific to your agency operation.

E&O

Insurance

All insurance agencies should consider carrying errors and omissions insurance coverage which protects the agent if and when an error is made and should a client sue for any wrong doing. PIA offers multiple markets through a variety of carriers. To obtain a quote, simply go here. Keep in mind some wholesalers and carriers may not consider any agency who doesn't carry E&O coverage at a certain limit for a possible agency appointment.

Prevention

PIA offers members many services and information to help in E&O prevention. Below is a sampling of several informative documents:

Should you ever have a question that is not answered with these documents, PIA also offers assistance through the Industry Resource Center. E&O expert, Robert M. Sullivan, Esq., is available to offer free advice. Also, don't forget to check out PIA's education schedule for E&O courses which may provide a discount on your E&O coverage!

One of the best ways to avoid an E&O claim is by continuing to educate your agency staff on how best to avoid a claim. PIA's Education Department offers many E&O prevention programs that may also offer you a credit on your E&O insurance. To see a complete listing of the education programs available through PIA, simply select your state below:

Coverage checklists

E&O experts recommend that an agency use coverage checklists to help minimize E&O issues. Below are several checklists PIA has developed to help you when presenting coverages to your clients, which include a place to have them initial if they decline the recommended coverage.

Carrier workflow

Insurance carriers stipulate what types of risks they will accept, when and how to bind policies, what policy forms to use, acceptable time frames for premium payments, conditions for claims handling, communicating with the carrier, and so much more. Each carrier's procedures may be very different from another.

Every insurance carrier varies in these requirements and restrictions, which may vary even for different products offered by the same carrier. All documentation should be kept up to date, kept in the agency office, and shared with all agency staff. It is very important to follow these requirements to avoid a breach of contract with the carrier, termination of business or possible E&O claims against the agency.

Binding authority

Insurance companies specify all rights and responsibilities in their agency contract, which is the actual contract or agreement between the agency and insurance carrier. This agreement is signed by the licensed agent upon appointment by the insurance carrier. The insurance company gives authority to the specified licensed agent(s) stated in the contract to bind policies on its behalf. Each carriers' procedures should be reviewed often and thoroughly.

Underwriting

The insurance carrier has the right to determine what risks they will and will not accept and may change this at any time. When a designated agent is given binding authority, the carrier will usually provide an underwriting guideline indicating the risks they will consider. Any questions with the risk or guidelines would be directed to each carrier's underwriter, whose sole responsibility is to assess the risk and determine whether it is acceptable.

Agency workflow

It is imperative to maintain efficiency and consistency in the agency to not only remain competitive but also to avoid any E&O situations. All insurance agencies should have a process to handle every situation from binding the policy to reporting claims to the carrier. All agency staff members should follow these procedures precisely and these should be based upon each carriers' procedures. See PIA QuickSource document No. QS90076— Sample Agency Policy and Procedures resource kit for details on developing the necessary agency procedures.

The PIA Industry Resource Center also has consultants who specialize in agency workflows, internal operations and claims procedures. Most consultants in the program offer a free phone consultation. For more information on PIA's Circle of Consultants, click here: https://www.pia.org/irc/circle.

Check out these other areas in the tool kit when considering agency workflow:

Privacy

Every state has various privacy laws in addition to the federal laws such as the Gramm-Leach-Bliley Act, Fair Credit Reporting Act and Driver Protection Act, to name a few, to which all independent agencies must comply. PIA's website has an extensive section devoted strictly to privacy requirements. To access PIA's Privacy Compliance Central, log on to https://www.pia.org/irc/privacy.

Files

Insurance agencies are required to maintain security for their client information and internal agency files, whether in paper or electronic form. PIA has developed a survey you can fill out online to help develop a written safety information program in compliance with the Gramm-Leach-Bliley Act. To access it, log on to https://www.pia.org/IRC/privacy/riskassessment.php.

Storage/security

Agents have a great deal of responsibility and must take necessary precautions when working with clients' confidential information to ensure that sensitive data sent, received, and stored electronically is kept safe at all times. Agents must obtain back-up of electronic data files in order to secure this information. See Technology issues in this tool kit for more details.

Federal and state laws also require that agents notify clients if a breach in security is discovered. For more information on security issues, go to https://www.pia.org/irc/privacy and scroll down to the heading Security breaches and freezes.

Notices

There are several consumer protection laws that agents should adhere to which are covered in PIA Privacy Compliance Central. Insurance agents often come in contact with sensitive client information such as motor vehicle reports or credit-scoring reports and are required by both federal and state laws to provide notices to consumers to sign prior to an insurance transaction.

Cyber insurance

Due to the nature of their business, insurance agents are very vulnerable when working with Internet-technology applications, databases or computer systems, and imposed privacy laws. This type of coverage needs to be considered just as important as any other commercial exposure. It may be vital in keeping your agency operational. For more information on what cyber insurance is and how it works, check out PIA QuickSource Document No. QS90630—Cyber insurance.

Policy writing/proposal

Once you have located a market for your client's risk, insurance carriers will require a complete application and any other pertinent information necessary to write the insurance policy. If for any reason the application is returned to you as incomplete and another agent happens to submit a complete application, you may possibly lose that business. Incomplete or incorrect applications can be the basis for a denied claim later on, or worse, an E&O situation. Always have the insured sign the application and warn that they should read and understand the entire application carefully before doing so. If a person knowingly signs an application that is false, it may be considered insurance fraud or misrepresentation; in either case, the insurance carrier may take appropriate actions with you and/or the prospective client.

For most commercial risks the prospective client will ask for an insurance proposal so they can compare other offers. Most agency management systems include some proposal templates that can be used for new business or renewals. As with any template, it can and should be customized for your agency.

New York Producer compensation disclosure

Boiled down to its simplest elements, New York State Insurance Regulation 194 requires New York producers to give purchasers of new insurance policies in New York a "boilerplate" disclosure containing no specifics about compensation. Only if a purchaser asks for more information does the producer provide a second disclosure giving details. No signatures are required from the purchaser acknowledging receipt of the disclosures. No "boilerplate" disclosure is required for existing clients unless they are switching carriers or purchasing a new policy. Around the time of their renewal, existing clients can ask for the compensation information. Copies of these disclosures should be kept for three years.

PIA has drafted and received New York State Department of Financial Services approval for the following primary and secondary disclosure forms for your use:

Primary disclosure

Sample NY primary disclosure language

Secondary disclosures

Technology issues

Technology plays a major role in the success of any new business. PIA is an active participant in ACORD's technology initiatives to assist our members in developing efficient technology workflows which will allow them to not only save time, but money.

In this section we will hit on some of the major technology issues and how we can assist you in these areas.

Agency management systems

An agency management system is critical to your insurance agency providing you the ability to organize your client files, accounting, sales management, and other agency-related functions through one management system.

Selecting an agency management system that fits your needs is key, so you should keep a list of everything you would like your system to do. Then when you meet with different vendors, you can make a comparison based on your specific needs.

Computer hardware

When establishing an insurance agency office, each piece of computer hardware is vital to the efficiency of your office. Cost and features of each piece of equipment need to be carefully considered. You will need to consider the type of computers necessary, new or used, desktop or laptop and the memory space and/or speed necessary. You also will need to decide on the type of printers; laser or ink-jet, multi-color or black and white; scanners, and much more. With technology ever-changing and so many new options to choose from, this can be an overwhelming task. It's a good idea to find someone with expertise in this field to help.

PIA's Circle of Consultants program also offers consultants with an insurance background and understanding of the newest technology available. For details on the consultants participating, contact PIA's Industry Resource Center at resourcecenter@pia.org.

Software

There are many different computer software applications available to choose from that work in conjunction with your agency management system, or separately if you so choose. Again, be sure you know specifically what you want the system to do for you so that vendors can be reviewed and compared based on your specific needs.

Whether it be agency management systems, computer hardware, or software, PIA members have the ability to access Matthew Milliken, an agency management and technology consultant to the insurance industry, owner of Mount Washington Valley Consulting Inc., and provides information technology support and digital marketing consulting to businesses.through PIA's Industry Resource Center by emailing resourcecenter@pia.org.

Electronic filing/electronic back-up

As an agency owner, you need to ensure that your agency records are backed up on a daily basis and at least one back-up should be stored off-site. You never know when loss of power, an inoperable computer system, loss of data or uninhabitable office space can affect your business. Through PIA's Circle of Consultants program, we can give you a list of firms that offer off-site back-up services for your reference. Simply complete the short form at https://www.pia.org/forms/circleform.shtml and we'll email or fax those consultant leads to you.

Agency Revolution internet marketing

PIA Management Services Inc. has partnered with Agency Revolution to offer substantial discounts to members who want to increase their internet presence and marketing efforts. Agency Revolution is a proven system that agents have used to optimize their web presence and integrate marketing campaigns into their everyday work systems, which include social media and traditional methods. If interested, you can contact Agency Revolution at (888) 208-9239 and indicate you are member of PIA of Connecticut, New Hampshire, New Jersey, New York, or Vermont or click here for more information.

Reference resources

There are several resources that can assist you with the daily functions of your agency.

PIA website—Think PIA first

If you have a question, don't hesitate to call PIA's Industry Resource Center at (800) 424-4244 or go online to www.pia.org, available 24/7 to access a wealth of information to start building your business.

PIA National

To access PIA National's website, log on to www.pianational.org.

Insurance Department websites

Department of Motor Vehicles

National Highway Traffic Safety Administration

Glossaries of insurance terms

PIA strives to keep its documents accurate, current and up-to-date. However, because the law changes rapidly, we cannot guarantee that all of the information in this online tool kit is completely current. The law is different from jurisdiction to jurisdiction, and may be subject to interpretation by different courts. The law is a personal matter, and no general information or legal tool like the kind PIA provides can fit every circumstance. Furthermore, the legal information contained in this online tool kit is not and should not be considered legal advice and is not guaranteed to be correct, complete or up-to-date. Therefore, if you need legal advice for your specific issue or concern, or if your specific issue or concern is too complex to be addressed by our tools, you should consult a licensed attorney in your area.