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Co-owners Anna Holhut and Glenn Allan.

That’s What the Nathan Agencies Have Been in Since 1969

The various names can be confusing at first, but make no mistake, the two divisions that make up the Nathan Agences — Amherst Insurance Agency and Amherst Financial Services — are all about making things clear, whether it’s choosing the right property coverage, exploring the various life-insurance options, or figuring out a strategy to carve out a secure retirement. The three principals say they’re just continuing Ron Nathan’s legacy of creating a one-stop shop to bring peace of mind to all stages of life.

Anna Holhut recalls a family with an insurance claim — no, actually, a family with a life-changing crisis.

“They had a fire, and they had nothing, and I had a check for $25,000 the next morning on my desk so they could go buy shoes and socks — and coats, because it was in the winter. They lost everything. Even if you could put a huge amount on a credit card or have reserves, it’s still huge.”

Or the man who, several years ago, had just lost his mother, so he was already in poor spirits when he came home around 9:30 p.m. to a flooded house due to burst pipes. “That night, we had people out there helping him,” Holhut, president of Amherst Insurance Agency, told BusinessWest. “He was overwhelmed, and he was saying, ‘thank you so much.’ But we want to be there, to try to put things in place to help our clients.”

Part of that process, she noted, is teaming with quality companies, from the insurers themselves to home-restoration firms, attorneys, and anyone else who needs to be part of the insurance process, both when the policy is written and when — often sadly — that coverage comes into play.

“We’ve obviously been here a long time and have the networking to get in touch with people in order to help people, and I love to do that,” she said. “That’s what I strive for.”

Glenn Allan, who co-owns the company with Holhut and serves as its vice president, agreed. “Everybody’s going to say, ‘we provide great service,’ but saying it and doing it are two different things. It’s easy to say, harder to do.”

The Nathan Agencies have been striving to meet that standard since Ron Nathan launched the firm — then known as the Nathan Agency and focusing on life insurance and investment products — in 1969. Now celebrating its 50th anniversary, the enterprise actually encompasses two distinct businesses under one roof: Amherst Insurance Agency and Amherst Financial Services, the latter owned by financial advisor Christian Sulmasy.

Christian Sulmasy says he brings a “comprehensive approach” to his work in financial services.

Sulmasy’s clients run the gamut from young people seeking a basic life-insurance policy or a 401(k), just getting used to saving and financial planning, to people in their 50s deciding where to focus their investment energies and discussing long-term-care insurance, to people in retirement protecting their assets.

“What I’m trying to bring to the table is a more comprehensive approach,” Sulmasy said. “When Ron set this all up, he wanted it to be a one-stop shop, so when a client comes in, it’s ‘let us help you with your retirement, your life insurance, insuring your house.’ It’s more than just, ‘let’s roll over your IRA, and let me manage your IRA.’ Now, we’re doing things like retirement projections. Are you on track? Are you not on track? And what strategies do we employ? That’s what I bring to the table, that comprehensive approach.”

In short, these two businesses under the Nathan Agencies umbrella comprise a lifetime of services for clients of all ages who are looking to the future and wondering how to make it a secure and successful one.

Continuum of Care

When Nathan opened his doors in 1969, Sulmasy said, “he created quite a practice. At one time, he sold a lot of life insurance. He did financial services. He also had property and casualty insurance, all under the Nathan Agencies umbrella. And he even had a real-estate arm at one point, which doesn’t exist anymore.”

In 1979, Nathan purchased the Amherst Insurance and Real Estate Agencies and changed his company’s name to the Nathan Agencies. These days, Amherst Insurance Agency offers property and casualty products, and the Amherst Financial Services Agency provides life insurance, health insurance, and financial-services products through Lincoln Investment.

As Nathan approached retirement, he forged a succession plan to allow the business to continue. In 2012, he sold Amherst Insurance Agency to Holhut and Allan, who had joined the firm in 1987 and 1991, respectively. Sulmasy came on board in 2014 and struck a deal to purchase Amherst Financial Services in 2017.

Holhut and Allan mainly serve individual clients, though a growing commercial-lines practice serves a range of companies, with niches including the home daycare market. “Those are people a lot of companies have difficulty insuring or don’t want to insure,” Allan said. “We’re more of a personal-lines agency than a commercial-lines agency, although we’re trying to grow the commercial aspect of the business.”

No matter the client, Holhut said, customer service is a particular point of emphasis. “I would say we run our business like a family business even though we’re not related. It’s the customer service to our clients; we really strive to go the extra mile for our clients. We have receptionists answering the phone when you call. It’s a very friendly, upbeat staff.”

Allan agreed. “We try to ensure that, when people are left messages, they respond in a timely manner. That’s the biggest complaint we hear from people coming from other agencies — ‘oh, they never got back to me.’ We never want to hear that about our staff.”

Technology has driven plenty of change in the insurance world; Holhut and Allen have both been around to witness the total changeover from paper files to electronic ones, and how that has affected speed of communication and response times between agents and customers — not to mention the ability to respond to a need from anywhere.

“Heaven forbid we had a tornado or hurricane and we couldn’t be here. I always want to be able to set up somewhere we can help our clients. And we can put things into play to do that,” Holhut said. “Because that’s when you need somebody — when something bad happens.”

Again, it’s that message of relationships and personal service, which she said customers can’t get from direct insurance writers on the internet.

“We look at people’s policies, and we’re astonished at the limits. When something happens, they find out they have only $5,000 worth of property-damage coverage and they did $25,000 in damage. There aren’t many cars out there worth only $5,000. So it’s a matter of educating them,” she said. “When people are purchasing something online, they’re just pushing buttons, and they’re just going for the lowest price, and the lowest price isn’t always the best. Maybe you get it cheaper, but you don’t have the coverage you need when something happens.”

Or, as Allan put it, “are you buying a price, or are you buying the coverage you need?”

Education is a big part of Sulmasy’s job, too, whether it’s helping small businesses navigate health-insurance offerings or explaining to individual clients what goes into hybrid life-insurance policies, which offer both a health benefit and help paying for long-term care. Or, of course, teaching people why it’s never too early to plan for retirement.

“People are becoming more wise to it, but for every client that wants to move forward, there are two or three who need a push,” he told BusinessWest. “It doesn’t have to be a full estate plan — it could be basic things like a will, healthcare proxy, or power of attorney. At the very least, getting those in place is important.

“Everybody’s different,” he went on. “Some people kick the can down the road: ‘I’ll deal with it next year.’ With them, my role would be to motivate them or push them in the direction to do what’s in their best interest. I can’t make them do it. I’m not an attorney — I can’t draft up a will for them. But we have some relations with estate planners in the area, and where appropriate, I try to at least let them know these are people I’ve done business in the past and have a comfort level with, and if they want to pursue it, I can certainly help them with that.”

Cradle to Grave

Holhut said her division of the Nathan Agencies also has strong rapport with the attorneys and realtors it works with. “We have the reputation of getting the paperwork to them correct and on time. They don’t want headaches. They don’t want to hold up a closing. It’s important. And we stand behind our reputation.”

Meanwhile, an active blog on the agency’s website educates the public on how to mitigate risk with seasonally placed articles on topics ranging from ice dams to kids going away to college.

The two sides of the Nathan Agencies often refer customers to one another, recognizing that, together, they can help people through numerous stages of life, which is something Ron Nathan always prioritized. “A lot of people say they do it,” Allan said, “but we can actually do it.”

Sulmasy, for one, enjoys the aspect of his job that helps people find security and peace of mind.

“I used to be in the corporate world, struggling to find my social footprint on this earth,” he said, adding that he wanted to make a greater impact on society. But it was a failing economy that gave him the kick he needed.

“I was laid off from my last corporate gig in 2008, when the market was plummeting,” he said. “But I was able to figure out what I want to do for the rest of my life. I made the jump into financial planning, where I could still rely on my financial skill set I’d accumulated, but, at the same time, help people in a more meaningful way than I was in the corporate world. And that’s been totally gratifying for me.

“That’s why I got into the industry — I wanted to help people,” he added. “I believe this is a relationship business. I feel like the relationship is equally important as the financial advice and guidance I and my team provide. Knowing it’s about relationships and knowing I’m trying to help people, it’s been a great fit, and I haven’t looked back.”

Holhut looks back, in some ways — like when she finds she has served multiple generations of a family.

“We watch the kids grow up, then they have kids, then the kids are driving … it’s crazy,” she said. “I enjoy that. I’ve always said I love what I do, because I love the people.” u

Joseph Bednar can be reached at [email protected]

Insurance

Take These Measures to Protect Against Common Threats

Privacy and security are two growing areas for small-business owners. Most businesses have at least some digital presence. Keeping your own data and the information provided by customers safe is crucial. Verizon recently reported there were 53,000 data incidents in 2018, including 2,216 confirmed data breaches. As a small-business owner, here are some measures you can take to help protect your company from these threats.

Install Anti-malware Software

Anti-malware software is designed to prevent various types of online attacks on your computer. Malware is a general term for a program that can harm your device. It could be a virus, phishing sites, ransomware, spyware, etc. Having this type of software in place is one of the most basic, yet very effective, ways to protect your business from digital threats. If you have more than one computer or device, you should get anti-malware software for all of them.

Update Your Software

Updating your existing software is another easy but effective measure you can take. When a software has an update, it can provide additional protection from malware. Sometimes, software might release a new patch. If a new patch is available, make sure to perform the update. It’s a good idea to turn on automatic updates so you don’t have to worry about manually updating all of your software.

Install a Firewall

A firewall helps block out connections that are unauthorized or harmful. Some computer systems may have a basic firewall, but consider getting a more substantial one for your business platforms. A more robust firewall can help protect your business from potential hazards.

Encrypt Data

Encrypting data just means no one can access your data without a password or other form of authorization. It’s another layer of defense if your computer gets hacked or someone tries to access it without your knowledge. Different encryption software options are available for your business to choose from.

Back Up Your Data

Backing up your data is essential if you encounter a cybersecurity threat. If something happens, you will be able to restore all your data quickly. Make sure your backed-up data is located somewhere outside of your computer. If your computer is compromised, at least then you will have a copy somewhere safe. You can back up your data on a physical storage device, or in the cloud. You can also go through a storage device company.

Train Your Employees

Sometimes a cybersecurity threat occurs when an employee makes a mistake. Informing your employees about best practices — such as educating them on what phishing e-mails look like and how to use different security measures your company employs — can help keep your business safe. Having an educational meeting or seminar can make a difference in the world of digital threats.

Hire a Professional

Hiring a professional to visit and assess your cybersecurity efforts can help reinforce your company’s defense. They can help you set up the types of protection your business may need. It’s never a bad idea to consult a professional, since they have expertise in the field.

Get Cyber Insurance

Because of the growing threat of data breaches, you may want to consider getting cyber insurance. This coverage helps protect your business in event of a data breach, loss of sensitive or personal data, and the legal matters that go along with information loss.

Bottom Line

Hopefully, all the methods mentioned above will prevent any data loss, but sometimes things happen that are out of your control. Talk to your insurance agent about cyber insurance and how it can help protect your business. u

This article first appeared on the blog of Encharter Insurance in Amherst; Visit www.encharter.com.

Insurance

Protect and Serve

Phillips Insurance team members, from left, Christopher McMaster,  Chrystal Greenleaf, Joe Phillips, and Christopher Rivers.

Phillips Insurance team members, from left, Christopher McMaster, Chrystal Greenleaf, Joe Phillips, and Christopher Rivers.

In the 66 years since Joe Phillips’ father opened the business that bears the family’s name, the insurance industry has undergone plenty of change, both in the range of risks faced by individual and business clients and in the products available to lower those risks and protect key assets. But the way the agency does business has changed as well, reflecting a modern approach to technology, mobility, and employee flexibility. The result has been high retention of both team members and clients — and consistent growth.

The insurance world has changed significantly in the 22 years since Joseph Phillips took the reins at Phillips Insurance Inc. — not to mention the 66 years since his father hung out a shingle in Chicopee.

But some changes at his agency don’t have as much to with insurance itself as they do with the way today’s employees — especially younger ones — want to work.

“We try to be as flexible as possible in this changing work environment,” Phillips said, noting that four employees work from home — actually, they kind of have to, living in Montana, Florida, Delaware, and right around the corner, relatively speaking, in Boston. “And we try to be as flexible as possible. Our office is open from 6 to 5 every day, so everybody picks eight hours within that timeframe to work. Some people come in at 6 and leave at 2. It works out, especially for some of the new parents whose spouses work.”

It adds up to a high employee-retention rate; four of Phillips’ 28 staffers have been there for more than 20 years, and 10 have been around more than a decade.

“You need to think about employee retention,” he said. “The average person has seven to nine jobs in their lifetime. If our average employee had seven to nine jobs in their lifetime, our retention would kill us. And our customers want to come in and see the same face, talk to the same person on the phone.”

“Everyone has become so fast-paced right now — people want something sent over, and you’re e-mailing and texting clients 24/7. And you have to, because it’s just as fast on their side as well.”

That’s why insurance agencies, like businesses of all kinds, need to compete for talent, he said — not just up front, but once they’re on board.

“Interviews used to be pretty one-way, and now — and I think it’s healthy — it’s a two-way interview, so when I bring in a new prospect for employment, they’re interviewing me as well. We sell them on the benefits we’re providing — retirement plan, health insurance, flexible work hours.”

It’s an office that’s set up for flexibility, he said — not just for flex time and maternity leave, but when a snowstorm strikes, or a major accident clogs up the Mass Pike, workers are set up through agency-automation technology to work from anywhere. That means no slowdowns at a time when clients demand speed and efficiency like never before.

“Everyone has become so fast-paced right now — people want something sent over, and you’re e-mailing and texting clients 24/7. And you have to, because it’s just as fast on their side as well,” Phillips said. “There are no more days off, which is good and bad, I guess. Companies don’t start their workday at 9 o’clock anymore. If they are, they’re far behind the curve.”

The agency’s headquarters in downtown Chicopee will soon expand for the fourth time in the past 20 years, a testament to its consistent growth.

The agency’s headquarters in downtown Chicopee will soon expand for the fourth time in the past 20 years, a testament to its consistent growth.

All this modernization and flexibility makes a difference, Phillips said, noting that clients appreciate stability — the agency boasts a 98% client-retention rate — and the staff has increased from 17 employees in 2014 to 28 today. Some of that growth has been internal, with three people who started as receptionists moving up to broader duties.

In short, Phillips Insurance is keeping up with the times, its president said, and growing all the more for it.

Family Business

Phillips’ father entered the insurance business in 1953, purchasing the William J. Fuller Agency, which was founded in 1892, and changing the name. The younger Phillips came on board in 1996 and took over the business when his father died unexpectedly a year later. At the time, the staff totaled three people, and two of them — Joe Phillips and Jeanne Jones — are still there.

Growth has necessitated some physical changes. This fall, the agency will undergo a 2,500-square-foot addition on the back of the building — its fourth addition in 20 years — and it also bought the former Masonic temple next door and will be tearing it down to build a 30-car parking garage.

The growing clientele is dominated by commercial lines, which account for 80% of total premiums. Much of that business is surety bonds for construction-related risk, mostly in Western Mass., but a good percentage east of Worcester, where the construction market is particularly active, and some out of state.

“MGM has really helped — we had 10 clients working down there, from a $20 million site package to the $6 million masonry package,” Phillips explained, adding that the Five Colleges have been doing a lot of building in recent years as well, providing further growth opportunities.

Another change has been the rise of captive insurance, he said. “That’s a little different. Our clients actually get together with a group of other like-industry-group businesses, and they form their own insurance company. They become the profit center. Instead of spending $500,000 a year to a major national carrier and that carrier making hundreds of thousands of dollars off you, you can make money off yourself. It’s becoming more and more common; it’s a growing section of the market.”

Phillips has also grown its employee-benefits department quite a bit over the past five years, while its personal lines — including home, auto, boat, ATV, and personal umbrella — are growing well, with the agency licensed with 20 insurance carriers, including some of the largest players, like Safeco (a member of Liberty Mutual), Arbella, Safety, and Preferred Mutual.

Still, “we specialize in complex risk — a lot of construction solar, recycling … a lot of tougher industries,” Phillips stressed. “It’s a diverse group of businesses, from Northern Tree Service, one of the largest tree-cutting companies in the country, to the Student Prince restaurant in Springfield.

“We’re an industry-specialization agency — construction, hospitality, manufacturing — so we align ourselves with the insurance carriers that want to ensure those types of businesses,” he added. “We have very good relationships with our insurance carriers. We’re one of the largest writers for Liberty Mutual in New England, and other household names have been great partners.”

Current Events

The modern approach to doing business spills over into Phillips’ online presence, which includes Instagram, LinkedIn, and a revamped website with an active blog that aims to educate clients — and hopefully future clients — on various aspects of insurance and risk; recent articles cover boating safety, lowering one’s carbon footprint, and home-security technology. Meanwhile, the agency has won awards from the Republican’s Reader Raves program four years running.

Meanwhile, the agency’s charitable efforts include sending about 15 employees annually to prepare Thanksgiving meals at the Knights of Columbus, as well as donating to efforts like the Joseph D. Freedman Bowl-a-thon to benefit Camphill Village, Berkshire Hills Music Academy in South Hadley, and Link to Libraries.

The latter is an example of civic involvement that goes beyond donations, Phillips said. “We’ve got about six people now going to elementary schools in Chicopee. We donate a few hundred books a year, and a different person goes over and reads every month. It’s great for morale. Everybody loves to do it. And it’s an opportunity to get out of the office.

In fact, he said, there’s a bit of a reading backlog because the volunteer readers don’t want to stop doing it. “We gently nudge them aside to give everyone an opportunity.”

Another hands-on activity is the bowl-a-thon, which Phillips has been involved in for eight years, sending 15 to 20 bowlers to participate and raising $85,000 last year alone.

“We want people to feel good about where they work and what we do for the community, and there are certainly plenty of worthwhile causes out there,” Phillips said. “It’s tough to pick — there are only so many hours in the day and so much money to go around. You have to pick a few and really make a commitment to it. Something like Link to Libraries is really hands-on and gets everyone involved, rather than just writing a check.”

In a way, those community-engagement efforts aren’t much different than the insurance business itself. In both cases, the goal is to solve problems and make people’s lives a little more secure.

Joe Phillips says the agency has built a strong reputation for taking on complex risk, much of it surety bonds for construction projects.

Joe Phillips says the agency has built a strong reputation for taking on complex risk, much of it surety bonds for construction projects.

“With the personal lines, we’re protecting someone’s most valuable assets,” he said, adding that they also help families deal with the cost and stress of milestones like, say, adding youthful operators to an auto policy.

“On the commercial side, we’re also solving problems,” he went on. “We’re coming in and working as a trusted advisor, much like they’d work with their CPA or their attorney. We identify risk exposures that maybe they hadn’t really reflected on in the past that they should have — assets that are at risk. We try to work with them to develop the most comprehensive package for their insurance, whether it’s a utilizing captive insurance or using higher deductibles to save on premiums and maybe absorb some of the risk on smaller losses.”

It’s gratifying, Phillips added, to come to work every day knowing this work — and what the agency does outside the office — makes a difference in the region.

“We try to be out there in the community through business networking, charitable networking, and, of course, just trying to do the best job for our clients,” he said. “That’s the best referral — our existing clients.”

Joseph Bednar can be reached at [email protected]

Insurance

Shelter from the Storm

In the insurance world, an umbrella policy is exactly what it sounds like, sitting atop home, auto, and business insurance coverage and providing excess protection against liability risks. What is less clear, area insurance experts say, is why more people don’t avail themselves of this relatively inexpensive vehicle. After all, life’s storms can strike at any time, and when they do, no one wants to be totally exposed.

Even the best intentions can’t always fend off an expensive lawsuit, said John Dowd, president and CEO of the Dowd Agencies in Holyoke. Take a field trip, for example.

“If you or your spouse has volunteered to chaperone your kid’s school field trip to an amusement park, you both can be held legally responsible for anything that goes wrong on the trip,” he explained. “If a child under your care is injured during the excursion, that child’s parents might try to sue you for damages.”

Which could wind up being a trickier situation than simply loading that child into one’s own car and crashing it — because the driver’s auto-insurance policy covers bodily injury. But what about situations like that field trip — what policy covers that?

It’s just one example, Dowd said, of why an umbrella policy is a good idea for most people. “A personal umbrella policy can provide coverage for such potential incidents, allowing you to chaperone a trip without worrying about potential financial risks.”

An umbrella policy — sometimes referred to as ‘family insurance,’ he noted — essentially sits atop existing auto and homeowners policies to deliver an additional layer of protection, especially against catastrophic liability loss.

“I would like to see anybody who has any net worth — say, more than $100,000, which would include most homeowners these days — to have a personal umbrella,” said Mark Lussier, who co-owns Lussier Insurance in West Springfield.

“The idea behind a personal umbrella is, you want to cover your net worth. When I get a phone call from someone who says, ‘I have this umbrella, but I don’t really need it,’ I say, ‘if somebody were to sue you for everything you were worth, is what you have on your home or auto policy enough?’”

Dowd noted that the coverage from a personal umbrella policy is wide-reaching, providing protection for scenarios not covered by a typical home or auto policy. For instance, if a family member rents a snowmobile on vacation and is involved in an accident, the umbrella policy may help pay for the cost of repairs and medical bills of the injured parties.

Perhaps the most compelling aspect of an umbrella policy, Lussier said, is its cost — maybe $250 or $300 per year for $1 million in coverage, with additional coverage available beyond that, typically in increments of $1 million. “I have a couple of clients who’ve got $5 million umbrellas because their net worth justifies the extra cost.”

“The idea behind a personal umbrella is, you want to cover your net worth. When I get a phone call from someone who says, ‘I have this umbrella, but I don’t really need it,’ I say, ‘if somebody were to sue you for everything you were worth, is what you have on your home or auto policy enough?’”

That’s on top of legal defense fees, which insurers cover as part of any policy. “So, if the unimaginable happens and you’re called by Mark E. Salomone, you have peace of mind knowing your insurance is going to defend you as well as pay anything you’re legally responsible for.”

Mark Lussier

Mark Lussier says the inexpensive cost of a personal umbrella policy, coupled with the many scenarios it covers, present a strong argument for buying one.

In addition, the umbrella is worldwide coverage. “So you can be vacationing in Europe, and if someone is injured because of something you’re responsible for, your umbrella is going to respond,” Lussier said.

Bill Trudeau, president of the Insurance Center of New England in Agawam, said he draws a simple diagram to explain the umbrella concept to customers, with policies like home and auto represented by rectangles, and the umbrella hovering over all of them.

“You can imagine a multi-fatality accident, where the claims might easily surpass $1 million. If an accident is deemed your fault, you may run out of insurance,” he explained. “But if you’ve bought a $2 million umbrella to go on top of a $1 million policy, now you have $3 million in protection in that instance. It’s a policy for excess liability claims — product liability, premises liability, bodily injury, property damage, all kinds of claims. It’s one policy, and you can decide how much protection you want to buy.”

Surprising Circumstances

Lussier stressed that umbrella coverage isn’t technically coverage the policy holder doesn’t already have. “You can’t get umbrella unless you have the underlying policy.”

While some may ask why not just increase coverage on existing home and auto policies, he pointed to the broad nature of umbrella protection, and, again, its cost.

“Many times, to buy more coverage under the basic policy begins to beg the issue of why you shouldn’t have the umbrella. I can have a $1 million umbrella for three cars and two houses for $250 a year. So it’s cheap.”

In Massachusetts, Dowd explained, most umbrella policies provide coverage for the policy holder and their immediate family members living in the same household, with some exceptions. And he listed a few scenarios where that wide net may come in handy.

For example, “if a dog attacks a guest in your home, you may be responsible for any medical bills,” he explained. Even a small bite could end up costing thousands of dollars, and, while some homeowners insurance policies provide liability coverage for dog bites, they typically restrict what breeds are covered. “If your policy excludes your dog’s breed, umbrella insurance may help cover any financial responsibility you have for the incident.”

As another example, if a recently licensed teenager causes a multi-vehicle auto accident, the resulting financial liability could be expensive. “While a single-car accident likely won’t exhaust your auto-insurance policy, a multi-car accident might exceed the coverage,” he said. “Personal umbrella insurance can cover expenses beyond those covered in your auto policy.”

One hindrance to purchasing umbrella coverage, Lussier noted, is that the holder must first increase his or her automobile bodily-injury coverage to $250,000 — and that floor can rise to $500,000 for older drivers. “In some cases, especially with multiple cars, that can be unaffordable. People say, ‘I can’t allocate that risk transfer; I’d rather retain the risk myself and take my chances.’ And that’s really what insurance is all about — it’s a transfer of risk.”

Then there’s something called ‘personal-injury coverage,’ Lussier said, which is different from bodily injury, instead referring to libel, slander, false arrest, and defamation of character. And this has become a minefield in the age of social media.

“Many times, to buy more coverage under the basic policy begins to beg the issue of why you shouldn’t have the umbrella. I can have a $1 million umbrella for three cars and two houses for $250 a year. So it’s cheap.”

“Some people, especially teens, don’t fully comprehend the power of social media,” Dowd said. “If your child makes a disparaging remark or unsubstantiated claim about someone on social media, that person might try to sue for libel.”

An umbrella policy may provide coverage for such situations, with most policies extending coverage to online statements. “Aside from just physical damage, umbrella protection can provide financial assistance if you’re being sued for libel or slander.”

Lussier agreed that this is a significant issue in an era when everyone is quick with a camera, and when images, videos, and statements online can live forever.

“Depending on your means, you can find yourself liable for substantial sums,” he told BusinessWest. “Nowadays, something said innocuously or without much thought can be a big deal. It goes viral, and the next thing you know, you’re saying, ‘I didn’t really mean it the way it was taken, but if I’d have known it would go that far, I would’ve kept my mouth shut.’ And if you put it in writing, you can make it even worse.”

Cost of Doing Business

Clearly, personal umbrella policies cover a wide net of possibilities. But it can be tricky when they cross over into the business realm. Lussier cited the example of a photographer who closes his studio and moves his enterprise into his house. “Now his house is a business exposure, and an umbrella excludes business exposures.”

That’s where a business umbrella comes in, working in much the same way a personal umbrella does, but covering liability risks related to a business.

Bill Trudeau

Bill Trudeau says growing businesses should continually reassess what level of coverage they need from an umbrella policy.

“If you have a relationship with your broker, they’re likely to offer you umbrella liability,” Trudeau said of business owners. “If you’re doing a review of your insurance, it’s something almost any competent broker brings up. As your business grows, it would be part of the basics of insurance coverage.”

The nature of the business would impact the risk exposure and, hence, the level of coverage needed, he noted. While a $1 million umbrella might be fine for a storefront shoe store or florist, a business owner with a fleet of heavy trucks would likely need more.

“We’re hoping not to scare people, but we want them to make realistic choices,” he said. “And a lot of times, those choices are informed by some requirement from the place you’re doing business with, like a contractor taking on bigger jobs, like a casino or office tower or hotel chain. The risk managers for those entities tend to have a requirement for higher limits of liability. So, like it or not, if you want to play in that area and do business with these kinds of clients, you probably have to buy an umbrella of some sort.”

Fame is a factor, too, Lussier said — and often results in higher rates per million of coverage, because famous people are seen as bigger targets for lawsuits.

“If you’re a high-profile person, like a news anchor, you won’t get an inexpensive umbrella, because of the higher exposure,” he explained. “If we’re selling you cheap insurance, we’re basically gambling that you’re never going to use it. That’s really what insurance is all about. The most people participate for the least amount of risk, so we can then price it accordingly.”

In addition, the level of coverage should reflect not only one’s net worth, but future earning potential as well. A doctor who just graduated from medical school and plans a career in brain surgery might have little more than debt to show right now, but a lawsuit could put significant future earnings at risk.

In the end, Trudeau said, umbrella coverage can bring peace of mind in myriad scenarios.

“If something’s gone wrong in your business — someone went through a stop sign, something terrible happened, some member of the public is injured badly, and your company is sued for $5 million — you can take some comfort: ‘I bought insurance, and I’m able to pay what people wanted to negotiate without having to declare bankruptcy.’ It’s still awful, but you have that small comfort, as opposed to sitting there wondering what to do.”

Joseph Bednar can be reached at [email protected]

Insurance

Culture of Coverage

Gov. Charlie Baker announced that the Massachusetts Health Connector completed Open Enrollment with the highest membership in the 13-year history of the state’s health-insurance exchange, covering more than 282,000 people with health insurance.

“The Health Connector just completed its most successful Open Enrollment since the start of the Affordable Care Act, signing up more than 65,000 new people with health insurance coverage,” Baker said. “Massachusetts leads the way with the best insured rate in the country, with over 97% of our residents covered due in part to the Health Connector’s strong efforts to create a culture of coverage in the Commonwealth.”

Lt. Gov. Karyn Polito added that “the Health Connector plays an important role in ensuring communities across the Commonwealth have access to affordable, high-quality healthcare. Over the last four years, the Connector has worked tirelessly to transform the exchange into a functional and reliable service, as is evident by its current milestone enrollment figures.”

“Massachusetts shines as a model for the rest of the nation when it comes to getting people enrolled in health insurance — and maintaining coverage. That success is built off outreach and education efforts that effectively and efficiently target the state’s underinsured communities and get more people covered. This year, the Connector made inroads in these tough-to-reach uninsured groups.”

The Health Connector held Open Enrollment from Nov. 1 to Jan. 23, twice as long as the federal government’s Nov. 1 to Dec. 15 open period, to ensure Massachusetts residents had as much time as possible to shop for affordable coverage. Throughout Open Enrollment, Massachusetts residents were encouraged to get covered or stay covered, provide security for their health and financial well-being, and comply with the state’s individual mandate. Assistance was available through community-based health navigators around the state.

“Massachusetts shines as a model for the rest of the nation when it comes to getting people enrolled in health insurance — and maintaining coverage,” said Health and Human Services Secretary Marylou Sudders, the Connector board chair. “That success is built off outreach and education efforts that effectively and efficiently target the state’s underinsured communities and get more people covered. This year, the Connector made inroads in these tough-to-reach uninsured groups.”

As of March 1, 282,114 people were enrolled in health insurance, including 209,973 people in ConnectorCare, the state’s innovative affordability program, through which state subsidies are made available on top of federal tax credits, resulting in lower premium costs for members — including $0 premiums for the lowest-income enrollees — while also offering no or low co-pays and no deductibles. Overall, Health Connector membership rose 13%, compared to a 4% enrollment decrease through the federal healthcare.gov platform. In addition, 18,000 individuals receive dental insurance through the Connector.

“With stable operations and a clear message to get covered and stay covered, this was our most successful Open Enrollment to date, with high retention rates and strong new enrollment,” said Louis Gutierrez, executive director of the Massachusetts Health Connector. “We are going to keep working to ensure that everyone in Massachusetts is covered.”

The Health Connector placed extra focus on outreach and public education about affordable coverage options in communities with higher rates of uninsurance and worked to raise public awareness about coverage generally. At the close of Open Enrollment, the Connector had enrolled more than 65,000 people who did not have coverage at the start of Open Enrollment, about 22% more than last year.

Insurance

Lines of Defense

While major data breaches at national companies justifiably make news, small businesses may not recognize that hackers target businesses of all sizes and types. But awareness is on the rise, especially as insurance companies hone their products aimed at protecting against cyber threats — and help clients understand that buying insurance is only one line of defense, and that complete protection requires in-house diligence, too.

When is cybercrime not cybercrime?

When it falls under the broad category of something called ‘social engineering,’ said Bill Trudeau, president and CEO of the Insurance Center of New England.

That term refers to a broad range of ways to manipulate people into giving up confidential information, or even money. It can include anything from phishing schemes to leaving a flash drive on the ground, hoping someone will find it and load it onto their computer out of curiosity, thereby installing malware on their company’s network.

Or say, Trudeau suggested, a CFO receives an e-mail he thinks is from the company CEO, reading, “we worked out a new deal with ABC Company. Wire them a $20,000 deposit; I’ll have full details when I return.”

“If they get your CFO to wire money to an unknown source, it’s not really theft because they did it voluntarily; it was a trick,” Trudeau said. More importantly, the loss would not be covered by typical cyber liability insurance, because it’s not technically a cybercrime, which involves the perpetrator physically hacking a network, not conning someone else into doing it. Instead, the client would need a fraud endorsement on its insurance policy.

“Social engineering is cropping up more, spreading like a pandemic,” Trudeau said. “Now, enough bookkeepers have been embarrassed or fired that, when they see an e-mail like this, they usually say, ‘wait, I’m not falling for this.’”

But the ones who do succumb to social engineering make it abundantly clear that, while cyber liability insurance is still an important part of a company’s defense against risk, just as important is a culture that trains employees in avoiding being conned.

“Social engineering is a relatively new term that refers to illegal fund transfer or diversion,” said John Dowd Jr., president of the Dowd Insurance Agency. “You can also unwittingly introduce a virus to a third party. This virus may have been put on your website by someone without you knowing it, and when people go onto your website, they get infected … and it’s your fault.”

That’s not to say cybercrime the way most people understand it — a hacker breaking in and exposing confidential data, for example — isn’t still a major problem, one that companies need to work with their insurance agents to cover. While historic breaches like Target in 2013, with 70 million customer records exposed, make headlines, the reality is that most breaches occur in businesses with 100 or fewer employees.

According to the latest report by Cybint Solutions, which provides cybersecurity education and training solutions to businesses and organizations, a hacker attack occurs every 39 seconds, affecting one in three Americans each year.

Bill Trudeau

Bill Trudeau says businesses need to take stock of exactly what data is at risk, and how damaging it would be to have it exposed, in order to craft a plan of defense.

In 2016, 95% of breached records came from three industries: government, retail, and technology. However, 64% of all companies have experienced web-based attacks, and 43% of cyberattacks targeted small businesses. Meanwhile, 62% experienced phishing and social-engineering attacks.

The threat is growing due to the increasingly interconnected nature of the world today, Cybint notes. According to a recent Symantec Internet Security threat report, there are 25 connected devices per 100 inhabitants in the U.S. By 2020, there will be roughly 200 billion connected devices.

The total cost for cybercrime committed globally has added up to $100 billion, Cybint adds. “Don’t think that all that money comes from hackers targeting corporations, banks, or wealthy celebrities,” the report notes. “Individual users like you and me are also targets. As long as you’re connected to the Internet, you can become a victim of cyberattacks.”

It’s concerning, the report notes, that only 38% of global organizations claim they are prepared to handle a sophisticated cyber attack.

“Many businesses, by and large, do not manage the threat as well as they should,” Dowd told BusinessWest. “This could be due to lack of understanding the true exposure and financial implications of a breach. Certain businesses have a greater exposure than others, but any business that stores personal information or uses a computer has the potential for a claim.”

Growing Costs

While the average cost for each lost or stolen record containing sensitive and confidential information increased 4.8% last year, to $148, according to IBM’s annual “Cost of a Data Breach” report, Trudeau said companies need to individually assess what they have at stake.

“You’ve got to look at this on a granular level,” he said. “What data do you have? What data-breach exposure do you have? Do you store information that’s a concern?”

The answer to that question could vary by quite a bit. “You might have blueprints or schematics, designs, but how critical is it? Some might shake their heads and say, ‘no one cares; it’s on the Internet, so it’s not top secret.’ But if a law firm’s files are stolen, there could be embarrassment and reputation risk. You have to decide what you’re trying to accomplish.”

Cyber liability coverage typically protects against a wide range of losses that businesses may suffer directly or cause to others, and these come in two forms: first-party and third-party losses. Third-party losses involve regulatory fines and lawsuits brought by affected customers, while first-party losses are what the business itself incurs up front, such as business-income loss, data-retrieval services, downtime, and notification of customers, to name a few.

The costs to businesses associated with a data breach, from lawsuits to regulatory fines to notification expense, can be staggering, Dowd noted, and insurance companies have responded with new policy forms that protect against many cyberthreats that customers may never have heard of.

“Policies today are much broader than they used to be out of necessity — the crooks keep coming up with unique ways to hack into your computers and steal information,” he said. “In some cases, they will charge you a ransom to return the information they stole from you. Insurance policies can cover all of the costs associated with a breach, including fines and penalties.”

When a data breach does occur, how a company responds up front — self-reporting to authorities and having a turn-key response — can reduce its liability. In fact, carriers that specialize in this type of coverage, like Beazley and Chubb, have turn-key response operations as part of the policy.

“Social engineering is cropping up more, spreading like a pandemic. Now, enough bookkeepers have been embarrassed or fired that, when they see an e-mail like this, they usually say, ‘wait, I’m not falling for this.’”

Immediately notifying victims and paying for identify-theft-prevention services can help avoid the liability costs that typically outweigh the first-party losses, Trudeau added. “You need liability coverage, but you hope you’ll never have to use that if you handle everything correctly with the victims.”

Businesses need to have not only insurance against cybercrime, but a plan of defense in case something does occur, Dowd said. “Virtually no one is immune from this danger. The laws on the books today are very strict with regard to protecting personal information, whether it is your clients or your employees.”

In response, according to the Cybint report, approximately $1 trillion is expected to be spent globally on cybersecurity from 2017 to 2021. Meanwhile, unfilled cybersecurity jobs worldwide will reach 3.5 million by 2021. Even now, more than 209,000 cybersecurity jobs in the U.S. are unfilled, and postings are up 74% over the past five year. Clearly, it’s a threat that isn’t expected to go away.

Eyes Wide Open

Employers can take a number of steps to prevent data theft, such as protecting every computer connected to the Internet or the internal network with anti-virus and anti-spyware software; installing security-software updates promptly to stay ahead of hackers; securing the company’s wi-fi network by requiring passwords or even configuring the wireless access point or router to hide the network name; securing computers and network components and requiring log-on passwords for all employees; and continually educating employees on security guidelines for computer, network, database, e-mail, and Internet usage, as well as penalties for violating those guidelines.

And, of course, training employees on how to spot a scam.

“It’s not a data breach when you fool someone into giving up data,” Trudeau said. “In the last few years, insurance providers have seen a striking increase in people voluntarily parting with their money. We need to make sure we’re having the right conversations.”

He said he’s heard of someone posing as a technician visiting a business, and asking to use the bathroom. Once out of sight, he ducks into the first empty cubicle he sees and inserts a flash drive onto a computer to upload malware.

“Certainly prevention is important. A lot of little things can happen,” he told BusinessWest. “Awareness is important, to stay fully ahead of all the shenanigans.”

Some cybersecurity-insurance carriers pose a long series of questions on their application forms about the details of a company’s exposure to data risk, and if the underwriter isn’t satisfied with the answers, they may not write the policy until certain practices have been changed and safeguards put in place. Companies may also choose to hire a third party to poke around their computer systems and challenge their operations when necessary.

“Prevention is critical because the fallout from a breach is not limited to out-of-pocket expense,” Dowd said. “You can also lose clients and sales.”

Indeed, according to an Economist Intelligence Unit consumer survey conducted in 2013, 18% of respondents had been a victim of a data breach, and, of those individuals, 38% said they no longer did business with the organization because of the breach. Meanwhile, 46% said they advised friends and family to be careful of sharing data with the breached company.

“Having a good IT firm who knows how to protect your system on an ongoing basis is critical,” Dowd continued. “Going through the application-for-coverage process is very helpful and often eye-opening because it reveals what you may or may not be doing correctly from a prevention standpoint. I will often suggest to clients that they go through the process of applying in order to educate themselves, even if they ultimately choose not to buy the insurance policy.”

After all, the best policy against becoming a victim is knowledge and vigilance. But an actual insurance policy is a good idea, too.

Joseph Bednar can be reached at [email protected]

Insurance Sections

Matters of Policy

Regina Jasak says local agents can help consumers avoid some “really scary policies.”

Regina Jasak says local agents can help consumers avoid some “really scary policies.”

When Massachusetts opened up its auto-insurance landscape in 2008, switching from a one-price-fits-all approach to the current model known as managed competition, it created more challenges for independent agents, but much more opportunity for customers willing to take the time to examine the many options and credits available to them. The key, these agents say, is putting their expertise to use — a resource not available to those purchasing insurance from direct writers online.

Eileen Bresnahan is always amazed at what people will do for a low insurance rate — like one individual who was covered for $5,000 in property damage for his 2017 Camry.

“If I hit you and do $17,000 worth of damage, my company is going to pay you the five grand, and you’re going to have to try to get the rest out of me,” she said, putting herself in that individual’s shoes for a moment. But such is the world of direct insurance writers — like Progressive and Geico — that market themselves based mainly on price, and wind up skimping on, you know, actual coverage.

“We always say ‘buyer beware,’” Bresnahan, president of Bresnahan Insurance Agency in Holyoke, said of local independent insurance agencies like her own. “We’re all licensed and trained; we can look at a policy and can tell you the things you might not know.”

Regina Jasak, president of Regina Jasak Insurance in Ludlow, has seen the same cases cross her desk.

“Anything you might hit — a guardrail, a car, a house — after that $5,000, you’ll be paying for it as well. You can get a really cheap policy, but you get what you pay for. I’ve seen some really scary policies out there from the direct writers.”

The truth, she added, is that customers can get policies for not much more than the bare-bones pricing of the online marketers, but with much better coverage, explained in detail, simply because of the flexibility Massachusetts insurers have enjoyed over the past decade — flexibility that, for the most part, didn’t exist before.

Indeed, for much of the past century, auto-insurance rates in Massachusetts were set by the state Division of Insurance. Anyone who requested a premium quote for a certain level of coverage would receive the same price from any number of companies, unless they were eligible for a group discount.

Managed competition, which began in 2008, allows insurance companies to offer their own rates. Although these rates may vary, they must still be approved by the Division of Insurance — hence the term ‘managed.’ The result is that Massachusetts drivers are able to compare the different rates, benefits, and services offered by the insurance companies competing for their business.

“There’s a lot of flexibility in auto rates and coverages, and it really needs to be tailored to each client,” Jasak said. “Each company has its own appetites, so we really need to delve into the client to figure out what’s best for them in order to find the best company at the best rates.”

That changed landscape made life more complicated for local agents, but in a good way, Jasak added.

“I find it more entertaining. It used to be that auto insurance was auto insurance, and it didn’t really matter where you were insured, whereas now the consumer can consider things like the company’s billing process, how claims are settled, are their rates good for my circumstances, do they offer me a great bundle option tying the house and car together? Is that the best thing to do, or can I get a better rate if I split things apart?”

Shifting Gears

Trish Vassallo, personal and commercial lines director at Encharter Insurance in Amherst, agreed that managed competition has radically changed the automotive side of the insurance business in Massachusetts.

Trish Vassallo (left, with Tracey Benison) says customers should review their policy every year to make sure they’re taking advantage of all the credits available to them.

Trish Vassallo (left, with Tracey Benison) says customers should review their policy every year to make sure they’re taking advantage of all the credits available to them.

“Carriers have been able to offer add-ons and packages and rider endorsements and enhancements that are specialized per carrier,” she said, “so while the Geicos and Progressives talk about accident forgiveness and gap coverages and reward dollars, those are available with everyone operating in Massachusetts today. Independent agents offer these coverages, but they are an added expense, as they would be with any carrier. As a client, you need to look at your coverage every year to make sure you’re getting the right pricing for the right products.”

That’s where independent agents serve a role the direct writers online cannot, she went on. “Sometimes people aren’t aware of options available or never had them explained to them, or they just don’t care — they want the bottom-line price and don’t understand what they’re missing out on.”

Under the prior, regulated system, insurance providers were required to apply specific surcharges for certain accidents and traffic violations. Now, insurance companies are permitted to develop their own rules, subject to state approval, for imposing surcharges for at-fault accidents and traffic violations.

They can also include a raft of discounts, such as for students who attend school away from home, making it easier for their parents to carry them on their policies year-round, or for bundling auto and home insurance when both policies are bought from the same carrier.

“Different carriers all have their own model customers,” said Tracey Benison, president of Encharter Insurance. “Our job is to really know the carriers and try to find the right fit for the customer.”

For example, Jasak said, some carriers will look back at driving records over three years, some six, and they also vary in how they incorporate accidents — both at-fault and not at-fault — into their pricing.

Then there are the credits, and they are myriad, Bresnahan said. “There are good-student discounts, so if a student gets a 3.0 GPA or higher, that’s one of the credits on there. Let me tell you, it is a big savings — and it’s an incentive to get good grades, and it also pertains to college.”

She also mentioned the discount for students away at college, as well as low-mileage discounts, which can knock anywhere from 2% to 17% off the cost of a policy. “Just think — the lower the mileage you drive, the less chances there are of getting in an accident or having a moving violation.”

From left, Shelly Chantre, Judy Orlen, Nicole Shibley, Janet Fernandez-Santiago, and Eileen Bresnahan of Bresnahan Insurance.

From left, Shelly Chantre, Judy Orlen, Nicole Shibley, Janet Fernandez-Santiago, and Eileen Bresnahan of Bresnahan Insurance.

Carriers may also offer multi-car discounts, a AAA membership credit — with the discount increasing the longer a customer has been a member — and a discount for individuals who enroll in an advanced driver training course. “There’s also a disappearing deductible that wasn’t in effect before either, so if you don’t have an accident for a certain number of years, each year your deductible builds up.”

With each carrier using such incentives to attract their own version of a model customer, agents need to understand all the nuances and how best to match a driver with a policy, Bresnahan added.

“It’s just training your staff to know which credits to offer,” she said. “We have letters go out with renewals, and we highlight discounts and enhancements they currently have and other ones they don’t, and they can call if they’re interested in knowing more about those.”

More Than 15 Minutes

The direct writers have certainly made an impact on Massachusetts auto-insurance scene, but they’ve also brought some controversy, being fined multiple times by the state’s Division of Insurance for various deceptive or confusing practices.

“Some of the direct writers are very coy with prices or hidden deductibles, which the customer is not aware of until a loss comes into play,” Vassallo said. “It can be difficult to understand your coverage when you’re buying off the rack.”

The benefit of an independent agent representing multiple carriers, she said, is that she can work to generate the best product for each individual — and educate customers on various pitfalls, such as the importance of listing all household members as operators, as failure to do so can lead to a claim not being paid.

“It’s very, very important that parents list their children on their auto-insurance policy as soon they get their license,” Jasak added. “If they have no prior insurance, it’ll be very expensive when they need it. Parents say, ‘oh, they never drive my car,’ but if they kids are never insured, if they’re never listed on their parents’ policy, they’ll be paying an exorbitant amount of money when they get their own insurance.”

It’s all about relationships, Bresnahan said, not just a bottom-line dollar figure on a computer screen.

“When you’re a local, independent agent, you have to look people in the eye. With these direct writers, you’re not looking that gecko in the eye,” she said, noting that she has lost clients to the online companies dangling a cheaper rate. “Buyer beware. If it’s too good to be true, there’s usually something up.”

And also beware, she said, when a direct writer promises to produce a quote in 15 minutes.

“We educate our personnel, and we keep up with the changes in this business — because it’s forever changing. There’s so much information that it’s not possible to get a quote in 15 minutes. You’re not getting proper explanation of the coverage. There’s so much involved in getting a quote. It takes a long time.”

Joseph Bednar can be reached at [email protected]

Insurance Sections

Seeing Eye to Eye

Bill Grinnell says the Ross Insurance purchase is essentially a match of similar cultures.

Bill Grinnell says the Ross Insurance purchase is essentially a match of similar cultures.

Bill Grinnell says he’s known Kevin Ross for years, both through the region’s insurance industry and socially as well.

“I got to know him better at the Springfield Country Club,” said Grinnell, president of Northampton-based Webber & Grinnell Insurance, recalling the start of conversations leading to his firm’s recent acquisition of Ross Insurance Agency in Holyoke.

“At one point several years ago, I sent him a letter that said, when he’s getting close to retirement, I’d love to talk to him because we’d love to have an office down in Hampden County,” Grinnell went on. “We write a lot of business down there, a lot of commercial business, and several of our salespeople are from that area — and we were interested in expanding and growing the business.”

But the purchase of Ross Insurance — a third-generation family business run for many years by the brother-sister team of Ross and Maureen Ross O’Connell — was also based on what Grinnell called a mutual respect between the firms and similarities in philosophy. As Ross did, in fact, contemplate retirement, he and Ross O’Connell — who is joining the Webber & Grinnell ownership team and will continue to oversee the Holyoke office, which will operate under the name Ross, Webber & Grinnell Insurance — narrowed their list of potential partners to a handful before deciding on whom they wanted to do business with.

“They approached those firms and interviewed them,” Grinnell noted, “and at the end of the day, we submitted an offer to them, went back and forth and ironed out some details, and we all agreed to do it.”

While Ross intends to transition out of the company in the next 18 months, Ross O’Connell will work with the Webber & Grinnell team to merge procedures and operations, Grinnell said, adding that the Northampton office will handle most of the commercial operations in Holyoke.

He added that having two locations will be a benefit to customers based in Hampden County. “If we station salespeople down there, it’s just easier to call on folks in the Springfield area.”

Meanwhile, he added, Webber & Grinnell has a benefits division for group life and group health insurance, “so we’ll be able to offer those services to those [Ross] accounts for those interested. That might provide some opportunities for growth for us.”

Community Ties

Both insurance agencies boast deep local roots, Grinnell noted. Ross Insurance was founded by George Ross in 1925 and has continuously served residents and businesses in Holyoke and surrounding communities for three generations. Meanwhile, Webber & Grinnell’s origin can be traced back to 1849, when E.W. Thayer opened an insurance and real-estate storefront on Pleasant Street in Northampton.

Once the acquisition is complete, the company will employ 41 people and serve more than 6,000 clients.

“They have a great name,” Grinnell said of the Ross family. “They’re as much involved in their community and supporting their community as we are up here. We’ve had a reputation for giving back to the community and helping a number of not-for-profits, and Maureen and Kevin are totally committed to the city of Holyoke, so they have the same kind of value system there. They’ve got some long-time customers, and they have a sort of family culture down there, which meshes well with what we’ve tried to create here as well.”

Both companies have also done extensive outreach to the community through social media, discussing topics of interest to both personal and commercial insurance clients. Ross in particular has developed a robust blog thanks to Jennie Adamczyk, the firm’s receptionist and social-media architect — a niche Grinnell has noticed.

“They’ve got a person down there who really focuses on that, and I think she’s going to be a big asset for us as well,” he said of Adamczyk. “Sometimes we have focused on that, but you get caught up in the day-to-day, and it gets pushed back a little bit, so we’re excited to have someone on our team to keep that going.”

For now, the companies will work to combine their communications, marketing, and other systems, and reconfigure roles, Grinnell said, “so there are some initial hurdles to get over. But it’s going pretty well so far. We’ve had positive comments from competitors who know both of us.”

Added Ross O’Connell, “we feel that we found the perfect partner to continue the Ross family legacy. Webber & Grinnell has a long history of generous community support and exceptional customer service.”

Perhaps just as important, Grinnell noted, many of his agency’s employees are in their 30s, making it a relatively young agency in an industry where many companies often struggle to replace retiring talent.

“A lot of guys are getting older in this business,” he said. “So I think Kevin and Maureen felt good about having local guys with a local presence be able to perpetuate their agency, because there are a million different options out there now. There are a lot of national players buying up agencies left and right, but they really wanted a local company that had that reputable, similar culture. So it worked out.” u

—Joseph Bednar

Insurance Sections

Avoiding the Winter Blues

policysecartWinter weather brings a host of insurance risks to homes and businesses, from ice dams wreaking havoc on a building’s interior to frozen and burst pipes causing serious water damage, to liability issues if someone falls on the ice on the front sidewalk. Insurance policies help protect property owners against exposure to such events, but just as important are common-sense preparations to minimize such risks in the first place.

John Dowd Jr. remembers 2011 well. That’s the year that brought Western Mass. a tornado in June, a tropical storm in August, and the out-of-nowhere snowstorm in late October. It was, in short, a rough year for insurance claims.

But the first rush of claims arrived in February, recalled Dowd, president and CEO of the Dowd Insurance Agencies in Holyoke. That was when a constant barrage of snows and thaws built up ice dams along countless homeowners’ rooflines, many breaking through the walls and dousing the interior with water.

“Ice dams are nothing new; it’s the confluence between snowfall and warming temperatures that create the backup,” he said. “That year, it was especially bad, coming after heavy snowfalls and creating enormous claims. People had situations where water was literally pouring into their living room.”

That’s especially true of older homes, he added, as many newer houses are built in a way that minimizes the flow of warm air into the cracks that fosters the growth of ice dams. However, while the damming phenomenon is nothing new, what has changed is insurance companies’ tolerance for paying for the damages, he went on.

“There’s a national database of claims histories that insurance companies can access. If you’ve had claims, they ask you what steps you’ve taken to keep this from happening again,” Dowd explained, citing options from professionally installed electrical wiring on the roof to plastic panels designed to prevent dams from forming. “And if you haven’t taken those steps, in some cases, insurance companies are not going to insure you.”

While some of those remedies, like the wiring, aren’t cheap, he added, no one wants to go through an ice-dam experience — not the insurance company, and certainly not the homeowner, who must grapple with interior damage and loss, and perhaps mold issues down the line.

David Matosky, operations director at First American Insurance in Chicopee, noted that standard homeowners’ insurance typically covers damage to a structure as a result of an ice dam, but will not cover the expenses to eliminate or prevent the root cause of the ice dam. It also will not cover water damage to the contents of the structure as a result of the dam, though customers can check with their agent to see if they can add such coverage.

David Matosky

David Matosky says home and business owners can avoid winter-related claims by taking some strategic steps.

And it’s a growing concern at a time when the climate seems to be changing — check out all the leaves still on trees a week into December — and temperatures that fluctuate between freezing and balmy. Those kinds of conditions with snow mixed in are fertile ground for ice dams. “That’s when you get big problems,” Dowd said, “so it’s smart to invest in some kind of protection.”

In fact, ice dams are far from the only winter hazard that concerns homeowners, business owners, and insurance companies alike. And, like the dams, most of those hazards can be anticipated, and steps taken to minimize the risk well in advance.

“Make sure your attic is properly insulated,” Matosky said. “Take the time now to buy a shovel and roof rake, not after you’ve gotten 15 inches of snow. And you have to be consistent and clean snow from the roof on a regular basis, as long as it’s safe — we don’t recommend people going up on a two-story house to clear snow, so maybe bring in a professional who knows how to do it. If you have damaged singles on the roof or the drip guards are in need of repair, take care of that now, before the snow starts falling.”

After all, insurance professionals say, buying coverage is just one element in protecting one’s assets from seasonal damage; the other is simply common sense and preparation.

People Get Ready

Matosky noted that, while it’s good to have insurance, filing a claim is never an enjoyable experience.

“There’s a distinction between a loss and claim. A loss is when something bad happens; a claim is where you’re able to have the loss paid for,” he said. “In some events, you may have a loss but not have a claim, and you’re left holding the bag.”

That’s why the best way to prepare for winter events is to take the necessary steps to minimize the chances of a loss in the first place, he said. That means not only buying a roof rake before the snow season begins, but also maintaining and testing snow-blowing equipment before a blizzard kicks up. “One of the worst things is getting 12 inches of wet, heavy snow, and you go to start your snowblower, and it doesn’t start.”

Dowd’s agency recommends several steps to prepare for winter, advising clients to insulate the pipes in their crawlspaces and attic, as exposed pipes are most susceptible to freezing, and to seal air leaks, not only to improve the home’s heat efficiency, but to protect the pipes. With severe cold, even a tiny opening can let in enough cold air to cause a pipe to freeze; and

Also, before winter hits, homeowners should disconnect garden hoses and use an indoor valve to shut off water to the outside, then drain water from outside faucets to reduce the chance it will freeze in the short span of pipe just inside the house.

Be Aware of
Indoor Risks, Too

With fires and space heaters for warmth, candles and holiday décor for ambiance, and more indoor cooking and entertaining, the risk for fires in homes increases exponentially in the colder months. The Dowd Insurance Agency in Holyoke offers these helpful tips to keep in mind:
• Be sure your chimney is inspected and cleaned regularly based on how much you use it, and ensure the flue is open before you light a fire.
• Candles should not be left to burn unattended, or within easy reach of children, pets and flammable materials like curtains and holiday decorations. The same goes for space heaters.
• Take care not to overload electrical outlets with holiday decorations or small appliances like space heaters.
• Do not leave items on the stove unattended, and keep towels and other flammable materials away from the cooktop.
• Be sure you have a fire extinguisher easily accessible in your home, and that you know how to use it.

Power loss after a storm is another hazard, which is why Dowd recommends people have a backup generator easily accessible, so they can at least run the heat, their refrigerator, and a few lights. He recalled the freak October 2011 snowstorm that felled trees and power lines throughout Western Mass. and knocked out power in some communities for extended periods.

“We had no lights, no heat for a week in my house, and I didn’t have a generator, so we just lived without power,” he told BusinessWest. “We felt like we were pioneers.”

Loss of power can also cause pipes to freeze up, which is especially dangerous for people who head down south for vacations during the winter. Fortunately, Dowd said, technology is available to alert people remotely when temperatures drop in their home. Even so, he added, it’s a good idea to shut off the water main before leaving for an extended time, so if power shuts off and the pipes freeze and break, the water damage in the home will be minimal.

Other holiday risks may not be so obvious, such as the possibility that thieves are scoping out houses that may be stocked with Christmas gifts. Dowd recommends shutting the curtains at dusk to prevent would-be burglars for scoping out what’s in the house, or using a timer for indoor lights while away so the house doesn’t look empty, or installing motion-sensor lights outdoors as a deterrent. Such a device, or, even better, a complete security system, may qualify for a discount on the homeowner’s insurance policy.

Staying Upright

While water and fires can cause tremendous damage in a home, there are other hazards that increase during the colder months as well. One of the most important is the liability risk from slips and falls on driveways and sidewalks that may not be completely cleared of ice and snow, or properly de-iced or sanded, after a weather event.

“That’s an issue for commercial properties as well as landlords and homeowners,” Matosky said. “Most towns have ordinances that you have to remove snow and ice from your sidewalk at the end of a storm.”

And that means keeping it off, both with additional shoveling or plowing as necessary and with ice-melting agents. “And if the commercial property is hiring someone to do the snow removal, they should make sure they have the correct coverage; if they don’t plow or shovel correctly, and someone falls, they need to make sure they have the coverage to respond to such a claim.”

Property owners with steeply pitched roofs often have to worry about snow constantly falling as the weather warms after a storm, and they could be liable if snow or ice falls on a passerby, so they need to take a combination of steps, from clearing snow regularly, if possible, to simply posting signs or barricades to keep people out of danger spots.

Meanwhile, with more homes and businesses installing solar panels on the roof these days, there’s also the danger of sheets of snow sliding off those panels onto the ground below.

A lot to think about? Sure, but planning ahead for the winter weather — and responding quickly after a storm — can go a long way toward avoiding the types of losses and claims that cause headaches for property owners and insurers alike.

“We’re conditioned in our business to think of the worst-case scenario — what could happen? — and then develop a disaster plan,” Dowd said. “These things probably won’t happen, but they may happen, and you want to do all you can to mitigate the damage.”

Joseph Bednar can be reached at [email protected]

Insurance Sections

Risk and Reward

The Encharter management team

The Encharter management team, from left: Trish Vassallo, personal lines director; Beth Pearson, commercial lines director; Tracey Benison, president; and Sue Henry, vice president of finance and administration.

Tracey Benison, president of Encharter Insurance in Amherst, says she deals in what some people may consider a dry topic, or ‘white noise.’ But to her and her team, it’s actually a vibrant, highly personalized process of helping people recognize the risks in their home and work lives, reduce those exposures, and make sure they’re well-covered when the unthinkable happens.

Trish Vassallo says there’s a certain gratification in matching insurance clients to the right coverage, especially when the worst — anything from a destructive hurricane to a violent car crash — happens.

“The best thing we can tell them is, ‘you’re covered for that,’” said Vassallo, personal lines director at Encharter Insurance in Amherst, and a 25-year veteran with the agency. But getting to that point takes time and communication, because each client is different.

“It’s really important to talk to the customer and understand what risks might be hidden, what they might be unaware of,” she told BusinessWest. “They may say, ‘I don’t drive for work, but I drop the kids off on the way to work, and do the same for my neighbors.’ That opens the door to further questioning, and we make sure they have the right coverage.”

Tracey Benison, who came on board as Encharter’s president two years ago, agreed, noting that the firm’s customers range from individuals with $500 policies to business owners whose premiums reach eight digits. “Basically, everyone who walks through the door has unique exposures we need to address. So we learn what’s unique about them and make sure they’re absolutely covered. A lot of people underestimate what their insurance needs are, and underestimate the need to get guidance from an experienced adviser. A lot of people are focused on prices and don’t purchase the right coverages.”

She said real-life examples are plentiful, including one individual she knows who had $20,000 in liability coverage on his auto insurance, and hit a pedestrian in a crosswalk; the victim racked up $350,000 in medical care.

“People say, ‘give me the best price,’ but they’re being penny wise and pound foolish,” Benison added. “And it’s not just the financial impact, but the stress. We want people to understand what their exposures are and what the best products are for it, and have them make a decision from there.”

The agency, formerly known as Blair, Cutting & Smith, traces its roots in Amherst back to 1879. In 1999, the firm was purchased by Plymouth Rock Assurance Corp. and changed its name to Encharter.

“But we remain independent, and we write as independent agents, but we work under the guise of Plymouth Rock, and we represent multiple carriers,” Vassallo said. “We don’t feed clients specific companies, but we look for the best product at the best price.”

Benison noted that many of Encharter’s 25 employees have been with the agency for many years, but plenty of new blood has come on board, including eight hires in the past year alone.

“It’s a growing office, and we want to keep growing,” she said, noting that 17 team members are licensed insurance agents. “That’s the majority of our staff, and to me, that’s a big part of what we do. When people walk through the door, anyone can help them with their insurance needs.”

What’s the Risk?

Encharter has long been a multi-pronged agency, offering a raft of products in both personal and commercial lines. On the personal side, customers cover everything from home and condo insurance to life insurance; from auto coverage to boats, motorcycles, even golf carts.

“We’re partnered with more than 50 carriers, which allows our customers to have access to a broad range of choices,” said Beth Pearson, commercial lines director.

But insurance isn’t just about making sure risk exposures are covered; the process begins with lessening those exposures to begin with, a process known as risk avoidance. “Insurance should be the last stop in the process,” Benison noted.

“One of the great things we do is educate people on exposures they might not be aware of,” Pearson added, noting, for example, that many commercial clients don’t comprehend the scope of today’s cyberthreats and the possibility of data breaches.

Tracey Benison

Tracey Benison says people who shop online for insurance, focusing only on price, are missing out on the personalized advice that could save them major headaches later.

“That’s a very interesting phenomenon in the marketplace. Cybercrime and ransomware and stealing data are becoming more sophisticated, and our client base does not necessarily know how to protect their business from these cybercriminals and hackers. In the fall, we offer a cyber presentation in conjunction with the chamber of commerce because people don’t always understand what’s involved in cyber risk and ransomware.”

As for insuring personal property, everyone is different, Benison said. “You can put two identical homes side by side, but the risk for each of them is different. It could be because someone is working from home, or it could be a piece of jewelry or an antique. That’s why purchasing insurance online is a problem. There isn’t someone going to the next stage, giving them advice on exposure. Instead, it’s ‘get the minimum possible, get the sale, and move on.’

“Commercial insurance is the same,” she went on. “You could have two electricians side by side, but one does commercial work and one does residential, or one has employees, and one doesn’t. You have to look at what they do, where they do it, and how they do it, and help them find ways to protect themselves and their assets.”

That said, Pearson noted, it’s gratifying to become a trusted adviser to someone taking a risk and starting a business. “We see a lot of new business owners, people starting a contracting business, a day care, a restaurant, and we have the opportunity to help all those folks open doors and help them as their business grows. We become their partner for a long period of time.”

Clearly, matching a client with an insurance product isn’t just a numbers game at Encharter.

“Insurance is a contract — very specialized, hard to read, and a lot to understand, and customers need to have it interpreted for them,” Benison said. “You can buy a policy from X and a policy from Y, and they cover very different things. People sometimes don’t spend the amount of time they need to really know what’s being covered or not.”

With an eye on further growth, Benison has also led a push to forge affinity agreements with area educational institutions, banks, credit unions, and nonprofits.

“Essentially, we find groups of people with a need for insurance and deliver that,” she said. “We’re finding a lot of employers aren’t addressing the insurance needs of their employees. So that’s an easy way for us to grow our business as well as meet a need on their behalf.”

Meanwhile, Encharter has also ramped up its continuing-education efforts for employees. “A lot of agencies won’t pay for that, but we do encourage and support it,” she told BusinessWest. “I want people continuously learning. Ten years ago, cyber wasn’t even an issue. Drones — that’s a new thing. And driverless cars will be the next thing we’re talking about. The exposures are forever changing, and we need to be on top of it.”

Community Ties

It’s not surprising that an agency whose hometown roots go back 138 years makes a priority of community involvement. Encharter does so through support of organizations like the Boys and Girls Clubs of Amherst and Springfield, Hitchcock Center in Amherst, Family Outreach of Amherst, and the Amherst Block Party. It will sponsor an Amherst Survival Center event this fall, and will be the lead sponsor on the 2017 Festival of Trees in Springfield. And a couple of weeks ago, at a new-teacher orientation at a local middle school, agency employees handed out backpacks filled with coffee cups, Dunkin’ Donuts cards, pencils, and other items to welcome the educators.

Some of those efforts are management decisions, but the agency also boasts an employee-run committee that meets once a month and targets organizations to support with fund-raisers like dress-down days; Plymouth Rock matches the donations.

“We’ve sponsored swimming lessons for students, the MSCPA, the Survival Center, and this month, Berkshire Children and Families,” Vassallo said. “They’re empowered to come up with that list for the whole year, not the corporation or management.”

Encharter traces its roots in Amherst back to 1879.

Encharter traces its roots in Amherst back to 1879.

The company also tries to tie its community offerings back into its core business; a good example is Distractology, a week-long program created by Arbella Insurance. “We’re bringing it to Amherst High School — essentially, they will be training high-school seniors on defensive driving for a whole week.”

It’s one way to stress that concept of risk avoidance in an era when 25% of all car accidents involve a smartphone, Benison said. “I drive around, and I see a lot of accidents, and I have to think it’s highly likely that some of them are because someone was looking at their phone — and it’s avoidable.”

Encharter will also be offering educational seminars in the community on risk-exposure topics, she said. “We’ll try to find a way to make it interesting. Most people think of insurance like white noise. We want to provide information in a way that resonates, is meaningful, and prompts people to take action.”

It’s the kind of material the firm already shares on its blog, another way it continually reaches out into the community to help people make the kind of changes that will make insurance claims less likely. “There’s a lot of good information in there, as simple as changing the batteries in the smoke detector, or clearing snow from the gutters and off the roof. Hurricane season can be a scary time as well; we want people to be out in front of it, so they understand what they should be doing now.”

Pearson was quick to add that making connections extends to the Encharter team itself, which enjoys many employee-appreciation programs throughout the year for going above and beyond in their work.

“There are a lot of benefits of working here at Encharter,” she said. “I’ve had the opportunity to work at several other agencies, and Encharter is not only very generous, but thinks more about driving business toward the future, not just resting on its laurels.”

Such efforts will certainly help ensure its continued success in the town it has called home for almost 150 years.

Joseph Bednar can be reached at [email protected]