Knowledge Center

Knowledge Center Items Podcast Episode 49

Can One Question Help Save Your Best Personal Lines Accounts?

Published on

At the very least, it will make sure every base has been covered.

That one question is simply asking if your client has any home-operated businesses?

Which is a question that might turn up more yes' than ever given the last 12 months we've all dealt with.

The only thing that's left to do is make sure you're offering them a policy that can handle it.

Brandon Goodin, RPS Broker and Underwriter talks about all the possible answers you might get.

For more Change Insurance episodes, click here.

Full Episode Transcript

Joey Giangola: Mr. Brandon Goodin, how are you doing today, sir?

Brandon Goodin: I'm doing very well. How about you?

Joey Giangola: Brandon, I'm doing all right. I want to know this first. It's a very interesting question. If you had to pick a board game to represent yourself to the world, what's that board game?

Brandon Goodin: Probably going to be chess. Pretty strategic, and I like to plan out things and I like to win. So I would say chess. What do you got?

Joey Giangola: Well, it's a little highbrow for me. I'm not that smart, but I appreciate that. I would probably either go the game of Life or maybe Monopoly. Probably the game of life, I think that's a little more well-rounded representation. But I feel it's a lost passion. You don't hear too many people pulling out the board game these days, really. Maybe it's come back, I don't know. I just don't have that experience as much as maybe I want to.

Brandon Goodin: Yeah. I'd agree with you. Everybody's trying to be safe right now, also. I don't see a lot of get-tog togethers going on right now, too. Yeah, we need to bring it back.

Joey Giangola: There's that too, of course. And virtual board gaming, I guess chess is a thing you could easily play online and stuff.

Joey Giangola: But anyways, what are you looking at in terms of just the landscape of insurance? What do you think agents should be paying attention to now with everything? Is there something that they should maybe be looking at to represent themselves to their clients, a board game that they could bring out and say, "Hey, this is the type of coverage we need to be paying attention to"?

Brandon Goodin: From a personal line standpoint, I would think that the home-based business product that we're rolling out would be something that they need to pay attention to, especially when there's a potential gap in coverage on their insurance homeowners policies or renters policies, for some of those side hustles that they may have picked up over the past year or so. It's definitely a gap that I would be looking at right now.

Joey Giangola: Yeah, that's a good call. Maybe somebody, if we're going to keep going with this board game thing, maybe started making their own board games and they're selling them out of their house. How do you go about advising somebody to uncover that properly? Because that's not necessarily the first thing that comes up when they're there doing these renewals. If you had to give a percentage to it, how often do you think agents are maybe asking those questions to uncover that, and is there a way to ease into that conversation or get into it and then approach it?

Brandon Goodin: I would think it's probably a lower percentage. Whenever they're working with their personal lines clients, they're looking at that big stuff: what's that replacement cost of that dwelling, how much contents do they have, and making sure that they have proper liability if they have any dogs or whatnot on the premises. Whenever they're going through that pre-underwriting or gathering that information, I think asking about any side businesses. And it doesn't even have to be a business. Anything that they're generating some money from, maybe a side hustle. Going back to board games, if they're they're making games or making toys or something like that, they're selling on Etsy, maybe when the farmer's markets are opened back up. Just asking the insured, "Are you trying to generate any revenue or doing anything for a hobby that generates some revenue on the side?" And that could identify any potential gaps in coverage.

Joey Giangola: I don't know about you, Brandon, but let's talk about board games. I think we should maybe start our own little side business ourselves. I'm kind of into that. We'll have to come up with a couple of different ideas.

Brandon Goodin: Absolutely.

Joey Giangola: That's an interesting point. I think it's, like you said, they're focused on the big stuff. Yet this is something that if a client had an issue with a client and their business and not having something covered- and especially if it's a good client. Because you would imagine that a decent client would be in a position to start a business and have it be successful and things like that. Do you think agents are really thinking that far down the road of, "Well boy, if this does happen and I didn't even at least ask them about it, what does that mean for the longevity of this client for my agency long-term?"

Brandon Goodin: I don't think it's something that often comes up in those conversations, so it's a good point to hit on. Because the first thing that's going to happen is, in the event of a loss or some type of claim that's made against the insured, that insurance can go back to the retailer and be like, "You're covering my home, and I have this home operation. This policy should have covered it. Why isn't it covering it? And why didn't you secure that coverage for me?" So asking that one little question, "Hey, do you have that side gig going on that's making some money?" can further expand upon any exposures there.

Joey Giangola: Yes. What do you think is maybe that hesitation from either asking you that question? Is it one, just the fact that it's not on the radar, so just general awareness? Or two, from my experience, it's a lot of just extra aggravation in a lot of cases to where are they going to put it, how many pages of an application am I going to fill out? All of the things that lead to again basically not making more work for themselves that isn't necessarily worth it. Do you find that to be the case as well?

Brandon Goodin: The frustration with completing the application, I definitely understand. That's why the e-commerce product is a great, great benefit for the retailer and for the insured. It's a few simple questions. And then being able to offer that and the insured can say yes or no, and at least the retailer has covered their bases.

Brandon Goodin: Asking the question, a retailer could approach it from a risk management standpoint. "Hey, we've got your home covered, we've got your contents covered, we've got that liability in place to make sure that you're covered in case Lassie does something. But just to make sure that I'm seeing the whole picture here, do you have any side gigs or are you generating any revenue over there?" That one simple question should be easy and painless. If we identify that exposure, then we've got that nice rpssmallbusiness.com to fill it for you.

Joey Giangola: Generally, again, it's easy to get lost in the shuffle of questions. I know another one they always ask, "Is there a daycare on the premises, or are you a delivery driver?" Again, it feels like that's something that could be easily folded into the routine of that question.

Joey Giangola: The angle that I also wanted to go to is that sometimes the opposite happens, where they feel like let's get a full on BOP or some type of actual commercial policy in place, and then you're dealing with a whole other set of issues, where we're really going the extra mile here. But in a lot of cases, there's still areas where that business is not properly protected because that commercial policy is geared for something else entirely.

Brandon Goodin: Absolutely. So that business owners policy is a great policy for any type of commercial business operation, but it might not fit the needs of these smaller home-based businesses. That product that we've rolled out, you can offer the GL and the professional liability for those professional classes or types of risks where the BOP doesn't provide any professional liability. There's another exposure there that we can address without going that BOP route.

Brandon Goodin: Also, with BOP you have to write property coverage with it, which can increase the premium, even if the insured doesn't have any contents. If they don't have a property exposure, no worries, we can do that GLPL. If they do have the property exposure, we can add that on, 5,000, $10,000 limits, with broader coverage than what the BOP would offer.

Joey Giangola: One thing that I've found interesting, and I've been talking to some folks on the carrier side of things as to what could potentially fall under a professional liability case in the home-based business. And there's a lot of people out there that are giving advice, that are casually willy nilly just flipping on the camera, being an Instagram star, YouTube celebrity, if you will, or at least attempting in some aspects.

Joey Giangola: And even if there's some amount of revenue exchange there, I would imagine that if something goes south there's a decent liability exposure there that I would say an alarming number of people are not aware of. Would that be an accurate answer?

Brandon Goodin: Oh, that is very accurate assessment. Even providing that advice, as you were talking about, whether it's some type of business management or life coaching, or maybe just something like an exercise routine or yoga, there is an exposure there, both from a general liability, like a bodily injury or whatnot exposure, but also the professional. Because if things don't go how the client thinks that they should have gone, they can turn around and sue the insured for failing to provide proper services, which would be a professional liability loss.

Joey Giangola: I tell you, it'd probably be a little overkill, but from the recipe front, I could definitely see taking action of... I've had plenty of things that I looked up online that did not work out very well in the kitchen. I don't know about you, Brandon.

Brandon Goodin: Oh yeah, it's a trial and error. And usually it works, but sometimes I'm like, "No, no, no, no, we're going to have to start over on that."

Joey Giangola: Let's talk about the likelihood of something like that happening. If an agent's going to go out to a client and say, "you are potentially viable for this," it's not every day that somebody thinks they have the grounds to potentially come back and sue somebody, or even consider it to be an option. So how can somebody approach that conversation of saying, "Listen, this is risk that you have in front of you"? What are the likelihoods of them running into this?

Brandon Goodin: So the likelihood I'm going to say is probably low, is what people will think. Because "Hey, I'm just doing this for friends" or "I don't do a lot of it, so what's the chances that it could happen?" When in actuality, there's a great chance. The people that you don't think that would sue you are going to be the ones that sue you. We've seen lawsuits between, "Oh, I'm doing this for my brother's business. My brother would never sue me." It's stuff like that, that catches people off guard.

Brandon Goodin: So approaching it in terms of, "You never know. So let's err on the safe side and make sure that you're properly covered." And the premiums are super competitive, that it just doesn't make sense to me personally to not have that coverage at such an affordable price.

Joey Giangola: Like you said, it's the person you least expect. And it's that random person that you never met that generally just rolls it off their back. It's a very strange occurrence, like you said. You've heard plenty of examples, of even celebrities, to where family and that business has eroded things.

Joey Giangola: Is there any type of business that you feel is maybe more susceptible to any type of exposures or losses that agents should really key in on uncovering? I know it's a general "anybody that's working out of the home," but do we see any type of industries particularly more likely to maybe need the coverage, over others?

Brandon Goodin: Chances are, I'm going to say for everybody. But that's me working in insurance, I've got that mentality that everything is going to have a loss. So I've got to reign it back a little bit. But if you're providing any type of professional service, technical writing, I mentioned the consultant work earlier, but bookkeepers or tax preparers, what happens if you fail to properly complete the required forms and the insured's client suffer some type of financial penalty from the IRS? Those professional heavy exposures probably are going to have a much more of a financial impact on the on the client, which the insured should make sure they have coverage for.

Joey Giangola: I don't know if you know the answer to this question, but you've brought me here, so I got to ask. Let's just figure this out. An H&R Block type person, somebody that does seasonal tax preparedness, are those contractors that are hired on by those companies? Assuming they're working out of their home nowadays, they're probably protected maybe under that parent company. I'm walking through that. Are there scenarios where you could stumble upon something like that, to where, especially with how everybody is working from home now, there might be a gap in being under the corporate umbrella? I don't know, I'm just spit balling here.

Brandon Goodin: That's a really good question. I don't know how the relationship is between these tax preparers working for H&R Block and those different other big name tax services. I don't know if they're a W2 or a 1099. If they are a 1099, chances are that they may need their own policy to fill any potential gaps.

Joey Giangola: That's what I was getting at. If they're not a W2 employee, if it's a 1099 or some other type structure, there's a much more increased chance that they could be in a position like that. I'm just curious, because again, like you said, it seems like this has always been a hidden thing, but even now the lines are probably grayed even more so. And if somebody can get out of something, they're going to try and get out of it, if something's screwed up. So just curious.

Brandon Goodin: Absolutely. And you've got those tax preparers that work for H&R Block, but you also have those risks that may sell on an online platform the products that they make at home. It doesn't necessarily all have to be professional liability. This virtual environment that we're working in, and everything's done online, and selling all these platforms, the insureds themselves might be, whenever they go through those Terms of Agreements and you just check the box and you hit Accept may be agreeing to two requirements when it comes to insurance. And then now you've got another exposure. Because who actually reads all of that? I know that I don't, because yeah. So they may be agreeing to stuff that their homeowners policy doesn't provide coverage for. So something to definitely consider.

Joey Giangola: Yeah, absolutely. Now obviously, talked a lot about businesses in the home, but in terms of just your outlook for insurance in general, what are you seeing? What are you excited about? Where do you think agents maybe need to be paying attention? What's another tricky spot that you see people not really diving into deep enough?

Brandon Goodin: We're definitely seeing a hardening in the market, especially with property all over the country, whether it's the coastal regions, wildfires out in the Western states, wind, hail in the Midwestern states. Definitely seeing some price increases there, and increase in losses. A lot of risks coming out of the standard lines into the ENS market. And with such an influx of this, what retailers can be doing is really knowing the risk that they're trying to write, understanding of the losses that have taken place in prior years, and have that understanding how the insured's going to prevent that future loss.

Brandon Goodin: So what makes our lives easier is when the retailer knows their risk and provides us with a complete submission on it. We're seeing a significant increase in submissions coming in. So the better the submission, the better results that we're probably going to be able to obtain for them.

Joey Giangola: You mentioned the idea of standard business moving over to the wholesale space, and it's a conversation we've had here a couple of different times. It's always fascinating to me. And if you're talking to an agent that maybe does a majority of their business in the standard markets, what do you think is something that they need to be paying attention to, when the red flag should go up to start considering when does it start sneaking into that ENS world? Are there any signs that they should be keeping an eye out for?

Brandon Goodin: I can tell you some classes of business that they should be on the lookout for. If you're coming across any hospitality business, any hotels and motels, and probably vacant buildings. Contractors still are, at least in the Midwest, in between standards writing them versus the ENS. But definitely that hospitality business, they may want to start reaching out to their ENS wholesaler broker much earlier in the process. Because we're seeing a lot of standard companies getting out of that class entirely.

Joey Giangola: Yeah, that makes sense. And keeping along that same line, in addition to an agent that might be dealing exclusively primarily in the standard markets, there's a lot of agents that deal exclusively or primarily in the personalized space as well.

Joey Giangola: Is there something that you're seeing opportunity wise for those agents to start dabbling on the commercial a little bit more to where "Hey, this is a good place to get your feet wet. This is an area where there's a little more opportunity that maybe hasn't been there for you. It's a little bit easy way to get introduced into the game."

Brandon Goodin: The first thing that comes to mind is contractors, because a lot of contractors are sole proprietors, so there might be an opportunity when you're writing that homeowner's policy to pick up the contract, aside from the home-based business. But the contractors is probably a good entry level. They can get a little complicated the larger that they get, but your typical drywall, plumbing, flooring, sole proprietor would be a good, easy way to get in. And that's something that fits really well within the ENS industry. Every market wants it. Every market's asking the same question. So it's not like you need to complete 15 different applications to get a quote, or five, or whatnot. My go-to is contractors. But I also have a personal preference towards contractors, because that's my book.

Joey Giangola: I was going to say, did you have a previous life where you were a contractor, Brandon?

Brandon Goodin: No, it's just that those fit so well with an ENS that it's always been one of the largest classes of business that we write, that we've got such great knowledge of what they do, what our markets do, and how best to provide the coverage for them.

Joey Giangola: I definitely have never met an insurance agent that said they didn't write contractors. So it's definitely something that I think is pretty ubiquitous across the industry.

Joey Giangola: I got three more questions for you, Brandon. The first one, really simply, what's one thing that you hope you never forget?

Brandon Goodin: One thing that I hope I never forget. Friends. I've moved several times, and friends, the ones that I have in my early to mid twenties and my hometown, through the ones that I make here, and hope I don't forget when I move on to other places.

Joey Giangola: Friendship is definitely a tragic casualty of proximity in a lot of cases.

Joey Giangola: On the other side of that, Brandon, what's one thing that you still have yet to learn?

Brandon Goodin: Let's see. I don't know. One thing I have yet to learn would be, I guess effective managing strategies that enable and empower coaching. That's something that I'm currently working on. So I think it's a really good goal that I have, is to be an effective leader, and managing different personality types, and understanding that not everybody aligns with how I learn or how I'm best coached. So that's something that I'm learning about, working on.

Joey Giangola: All right, Brandon, last question to you, sir. I've already handed you a magic wand of sorts to reshape change, alter, speed up, do anything you want to insurance in any way that you see fit; what is that thing, where is it going and what is it doing?

Brandon Goodin: If I had a magic wand to change, I would try to reverse some of this climate change, so we don't have such severe, crazy storms that are negatively impacting the property market space, both from the wildfires, those named storms last year in the hurricane season, but also within the Midwest with the tornadoes. Iowa suffered that derecho last year that pretty much wiped out the state. So I would try to roll back some of that climate change so that we can write property more profitably.

Joey Giangola: Brandon, this has been fantastic. I'm leaving right there, sir.

Brandon Goodin: Sounds good. I appreciate your time, man.

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