Building a niche in social services

Michigan agency supports the missions of its nonprofit clients

By By Phil Zinkewicz

When it comes to providing insurance coverages for social services organiza­tions, Don White, president and chief executive officer of Hershey Insurance Group of Troy, Michigan, knows what he’s talking about. The agency’s special social services division called CARE started up about 15 years ago and today represents fully 50% of the agency’s commercial lines business.

CARE stands for Charitable, Altruistic, Religious and Educational insurance services. The Hershey division helps not-for-profit, mental health, religious and private academic and charter vocational schools to protect themselves against risks that are unique to their industries.

“Back in the 1980s, nobody in the insurance business wanted to cover these industries,” says White. “We saw a need in the social services sector that required satisfying, so we developed the expertise to help us fill in the gaps. Remember, a great many social services risks are 501 (c) 3 organizations serving the underprivileged. Many of these organizations are set in urban areas, so they represent difficult property risks. Also, many are governed by boards of directors, so D&O coverage is essential, and a by-product of that is employment practices liability insurance (EPLI). As a matter of fact, EPLI is a particular area of potential growth.”

White joined Hershey in 1990 as an agent specializing in commercial property and casualty insurance. Prior to that, White was one of a select group of agents called Aetna Prime Agents where he earned Agent of the Year in 1989. Named vice president of Hershey Insurance Group in 1994, White was instrumental in creating one of the top human services insurance firms in Michigan. He was named president in 2005.

“We market to those organizations that have unique coverage issues,” says White. “Many of these not-for-profit organizations employ counselors, psychiatrists, or medical directors, which presents professional liability exposures. Many of them have activity centers or transport patients, which presents different exposures. In order to provide needed coverages, sometimes we have had to go to the excess and surplus lines market, but that is changing. Today, some admitted carriers are looking at the social services arena as an opportunity for growth.”

White says that the acronym CARE was developed in an effort to ensure that the program would stand out countrywide, displaying to clients that Hershey has a special knowledge of what it takes to adequately protect organizations that contribute to society. However, White also maintains that the program’s name indicates that the agency is ready and willing to give back to the organizations it serves. White and Hershey’s 25 employees participate in fundraising for the organizations to which the agency provides insurance or, as White likes to call it, “fun-raising.”

Says White: “It is our way of showing that we support their missions. We understand that they rely on outside funding and, as a vendor, we are happy to get involved. That is particularly true in these economic times where state and local budgets are being severely cut.”

And, for White, “fun-raising” is not just about giving money or ideas. It is about participation. In fact, as a new member of the advisory board of the New Center for Community Mental Health, he recently suggested a golf outing as a means to help the group develop some important community ties through a social event. After convincing the group of the need, he took on the project himself, serving as chair. That golf outing was the group’s most successful fundraiser ever, White says.

“The social services sector represents a wonderful opportunity for brokers and agents countrywide,” he adds, “but it’s a sector that you have to dig in to get to know. You must understand their particular exposures and what their missions are. It is an area that can be very rewarding.”