Dear Readers:

Welcome to our first quarterly issue of the Cline Wood Agency newsletter, CWA Transportation and Agribusiness Review. We founded Cline Wood 25 years ago on two simple principles:

• Always deal ethically with customers, insurance and vendor partners, and employees.
• Treat everyone with respect.

Our goal then and now is to provide the very best in coverage and service to our customers, and the opportunity for our employees to work and grow in a positive and challenging environment.

As we celebrate our 25th anniversary this year, we are pleased to provide this newsletter as a service to you — the people who have helped us grow and achieve success. We want this to be an effective new way for us to communicate with all the people who are part of the Cline Wood Agency family. We hope the information in this newsletter will be informative and perhaps expose you to news, a resource or an article that will help you in your business.

We ask you now and in the future to help us make the newsletter better with your feedback. We also encourage you to pass the newsletter around to everyone you think might enjoy or benefit from seeing it.

Thank you for being part of the Cline Wood Agency family, and we hope you enjoy the first edition of CWA Transportation and Agribusiness Review.

Sincerely,

John Cline and Mike Wood, Founders

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What's New

• Two new producer trainees for transportation joined the company. Skip Wombolt and Marshall Sherlock are located at our headquarters office in Leawood, Kan.
• Rhonda Cox joined the company as an account executive in our Arlington, Texas, branch.
• Our Arlington, Texas, office moved to a new location to make it more accessible to clients.
• In the next few months, Cline Wood headquarters is relocating to a new, larger office in Leawood, Kan., to accommodate growth of the firm.

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Out and About

If you’re at any of these events, please stop by to see us:

• Jan. 28-30: National Cattlemen’s Beef Association annual convention in Phoenix, Ariz. As the main sponsor of the Livestock Marketing Council, Gary Coady, Vice President – Agribusiness, and Jeff Howard, Producer, gave a presentation. Thanks for stopping by our booth.
• Feb. 26: David DeBolt, Vice President - Risk Services, will attend the Oklahoma Trucking Association mid-winter meeting in Oklahoma City..
• March 8-9: Tom Dickmeyer, CEO, will attend the Truckload Carriers Association annual convention in Orlando, Fla.
• June 21-23: Tom Dickmeyer, CEO, will be a member of a panel discussing insurance and risk management at the ATA National Accounting and Finance Committee Annual Meeting in Lake Tahoe.

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The Faces of CWA

Meet Jeff Boan
Producer/Sales Manager, Southwest Region
Arlington, Texas

Jeff Boan's role at Cline Wood is to produce new business and manage current business. Client service is his top priority. “We work as a team — producer, account manager, marketing, billing, etc. — and I always make sure that the entire team is doing what is in the best interest of the client,” he says. “The client relies on us to put together the best package for their insurance program. We will go to battle for all our clients to make sure they are getting what they need so they can continue to run their business and not worry about insurance.”

Jeff has been with Cline Wood seven years. He started out as an intern during his senior year of college, and he began producing full time the summer of 2003. In 2004, he moved to Dallas to open Cline Wood’s Arlington, Texas, office. He was named Producer of the Year in 2004, 2007 and 2008.

“There are numerous things I enjoy about working at Cline Wood,” Jeff says. “From the top down, everyone is willing to pitch in. We are successful in this business because everyone understands that serving clients requires a team effort, and our Cline Wood culture is built around that.”

In his spare time, Jeff enjoys golfing, going to the lake and socializing with friends.

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News You Can Use

Price Versus Value:
A Cline Wood Agency Perspective
by Tom Dickmeyer, CEO

We hear stories like these all the time: A truck company changes agents and insurance companies to get a cheaper cargo insurance premium. The savings might be $10,000, which seems like a lot at the time. Unfortunately, the new policy might have wording that excludes a $20,000 cargo theft loss, which would have been covered under the former policy.

Or a client selects a new company that offers a livestock rate that saves $5,000 annually. Later, a winter storm blows through and 50 animals die, 30 of them Holsteins. Unfortunately, the new policy included a mandatory $15,000 deductible for Holstein cattle in addition to the overall policy deductible. The client is out $15,000 more than he would have been under his former policy with more storm losses still possible.

The price you pay for your insurance is always important. It can be even more critical in times like these when the economy is making it more challenging than ever to make ends meet. Unfortunately, focusing on price and only price can end up costing you far more money than the initial savings. 

This is where value comes in. At Cline Wood, we define value as getting the coverage you need and the services you want at the lowest possible price. In the above example, the agent and the customer were so concerned about the price that they didn’t focus on the coverage.

At Cline Wood, we believe first and foremost that value is defined by each customer, not by his agent or broker. Each customer has certain criteria that he or she thinks are important, and these are the things that bring value to that customer. 

Second, we do not feel that offering the cheapest price will keep our customers satisfied if their values aren’t being met. Insurance policies are not all the same, and it’s important to know what is and is not covered when you compare proposals among several agents and companies. Very few customers would buy the cheapest policy if they knew it would not provide the coverage they need. Cline Wood’s goal is to determine and meet your value expectations at the lowest possible price.

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Protect Your Business
From Discrimination Lawsuits
by Cathy Wilson Pec, Vice President - Transportation Risk Management

Federal and state governments continually impose on employers new employment regulations designed to protect employees from a lengthening list of discriminatory practices. But who is protecting your company from related lawsuits?

It could be an employee angry about being terminated or simply an employee who misinterpreted something a manager said. In today’s business world, however, discriminatory lawsuits are on the rise. That’s why your company should consider Employment Practices Liability Insurance (EPLI).

EPLI is designed to protect the corporation, directors, officers and employees from certain types of discriminatory practices, including:

• Wrongful termination.
• Harassment (sexual or otherwise).
• Hostile work environment.
• Discrimination on the basis of age, gender, race, color, national origin, religion, sexual orientation or preference, pregnancy or disability, retaliation.
• Wrongful failure to employ or promote.
• Wrongful discipline.

The readiness to sue has become commonplace, and may even increase in the current economic climate. With that has come frequent multi-million-dollar employee claims against corporations. In fact, settlements and judgments in these suits have increased by nearly 200 percent in the last few years according to the Equal Employment Opportunity Commission (EEOC).

According to the 2006 edition of Jury Verdict Research:

• If an employer is sued by an employee there is a 63 percent chance the employee will win.
• The average verdict in an employment suit is $603,376, rising to $808,337 if the suit is brought in state court.
• The average verdict in discrimination claims is $656,072, rising to $1,016,566 if the suit is brought in state court.

The above statistical information does not include defense costs, which can be in the hundreds of thousands of dollars. The total verdict and defense costs would be crippling to most corporations without an adequate EPLI policy in place.

To receive a proposal for this important coverage, please contact your Cline Wood service representative.

Related Industry News

Trucking Co. to Pay $2.43 Million
for Not Hiring Woman Drivers

Pitt Ohio Express Inc. has agreed to pay $2.43 million and will provide other remedial relief to settle a sex discrimination lawsuit filed in March 2006. The suit charged that the interstate trucking firm denied a class of qualified female applicants employment as truck drivers or dockworkers since 1997, while men were placed in these positions during the same period.

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Transportation

The Safety Zone:
A look at safety issues by David DeBolt, Vice President - Risk Services

By now we likely have all digested and adjusted to the “Final Hours of Service” rules, which were cast in stone Jan. 19. According to the rules, truck drivers may drive up to 11 hours within a 14-hour, non-extendable window from the start of the workday, following at least 10 consecutive hours off duty (11-hour rule). The rule also allows motor carriers and drivers to continue to restart calculations of the weekly on-duty limits after the driver has at least 34 consecutive hours off duty (34-hour restart).

The original Hours of Service regulation existed for many years with only minor modifications. In 2003, by direction of a congressional mandate, the Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) rewrote the old regulation and gave the trucking industry new and more realistic driving and break rules. The new rules reflect a more pragmatic approach to creating regulations, recognizing tremendous equipment improvements and a vastly expanded highway infrastructure.
           
The trucking industry, however, has numerous and powerful opponents, and those folks have almost continuously exercised their right to challenge the Hours of Service rules. They challenged the rules in the courts and in many public forums, maintaining the FMCSA rules did not address or comply with the original congressional mandate. The net result of all these challenges is, in a nutshell, that we have the same rules as established in 2003. 

Well pinch me if I’m wrong, but I do not think for a moment our adversaries will pack their tents and quietly fade away into the woodwork. Instead, I suspect they are simply exploring new and different approaches to getting this back into litigation and on some court docket. As a matter of fact, as recently as Jan. 16, the FMCSA denied petitions filed by these groups about the 11-hour driving and 34-hour restart rules. My opinion, which is shared by others in the industry, is that the petition was merely the first step; the next is filing for a judicial review within 60 days in a circuit court.

So the struggle is not over. But you know our industry’s safety statistics continue with marked improvement. Truck-related accidents, injuries and fatalities are being reduced.

Keep up the great work, but stay tuned. I’m positive there will be more — and soon.

Related Industry News

Snow and Ice Accumulation on Vehicles
American Transportation Research Institute (ATRI)

Click here for full article

During the winter months in regions with significant snowfall, snow and ice can accumulate on the tops of vehicles, which can then dislodge during travel. These chunks of snow and ice can then strike other vehicles, creating a safety issue that results in property damage or injury to other motorists. Here’s what to do if this situation affects you.

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Is Your Equipment Insured
for the Right Amount of Money?
by Cheryl Fennesy, Vice President - Transportation

Knowing the correct value of your equipment and relaying that information to your account manager is very important when it comes to collecting on a claim. Most insurance companies base the physical damage of the equipment on actual cash value (ACV). This can cause problems with over- or under-insurance. 

For example, say you have a truck insured for $50,000, but it is actually worth only $40,000. If that truck is totaled in an accident, you will only receive a settlement of $40,000 (the ACV) minus your deductible, even though you were paying a premium for $50,000 in insurance.

On the other hand, under-valuing your equipment also can cause problems. Say you have a $50,000 truck insured at $35,000, and the estimate to repair damages caused in an accident is $35,000. You might assume it will be repaired since you bought $35,000 in coverage.

Often in a case like this, however, the adjuster receives a salvage bid that might be only $5,000, resulting in a constructive total loss. Your insurance company will provide you two options:

• Receive $35,000 minus the deductible, and the insurance company keeps the truck.
• Receive $35,000 minus the deductible and the salvage value ($5,000 in this example), and keep the truck.

Either way, you wouldn’t have enough money to replace or repair the truck.

It’s important to review the values you place on your vehicles at every renewal and adjust your coverage accordingly.

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Agribusiness

Speak Up! Share Your Thoughts About GIPSA’s Review of Bond Requirements

Market agency bonds are failing at a rate of five per year, and repayment to sellers and consignors averages only 29 percent of the actual loss.

Because of these facts, the United States Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyard Administration (GIPSA) is reviewing and seeking input on how to better calculate the reasonable bond required to be posted by each market agency, dealer, and certain packers (bonded entities) under the Packers and Stockyards (P&S) Act. The goal of the review is to determine what alternatives, if any, exist for revising the P&S Act regulations to better protect the financial interests of livestock sellers and consignors without exceeding a reasonable bond amount for bonded entities.

The USDA is asking for public input on several identified alternative revisions to the regulations and the issues they are considering in this review. Comments received by March 23 will be considered.

Submit your comments to:

Mail:
Market Agency, Dealer and Packer Bond Comments
c/o Tess Butler
GIPSA, USDA,
1400 Independence Avenue, SW
Room 1643–S
Washington, DC 20250–3604.

E-mail: comments.gipsa@usda.gov.
Fax: (202) 690-2173
Internet: http://www.regulation.gov

For more information, click here

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Prevent Pesticide Application Claims
by Gary Coady, Vice President - Agribusiness

Before you open the first package of pesticide this season, make a phone call to help prevent costly misapplication claims. The most common cause of misapplication claims is poor communication between the applicator and the farmer. After calling the farmer to discuss your plans, record the time, date and items discussed.

When it’s time for the applicator to spray the field, call the farmer one last time to verify the specifics of the job and ensure everyone is on the same page.

Other tips to keep in mind:

• Monitor wind speed and apply materials according to label directions.
• Apply the right material on the correct field.
• Rinse spray tank and nozzles thoroughly before changing pesticides.
• Check equipment settings and operation.
• Adjust timing and rates according to field conditions, plant or weed height, etc.

Need more information? Contact your Cline Wood producer or account manager. We would be glad to share additional useful information provided by the insurance companies we partner with.

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