E&O Prevention
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January 27, 2011
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January 2011
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AgentsofAmerica.ORG is an Insurance Agent's Association and indispensable resource for news, products, services, education, and industry information throughout America. The organization's Mission is to deliver the BEST people, products, information, and services to Agents on a daily basis all designed to help them manage and grow their business, increase their revenues and provide ongoing value to their clients. Our motto is "Bringing the BEST Together."

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Letter from the Editor

Hope you all had a wonderful holiday, and are enjoying the New Year!  Over the next few months, AoA thru its partnership with Marketing That Works For You will be offering our readers the opportunity to participate in a number of online surveys that will be geared to helping insurance agents  get a better understanding  of social media,  and create branding and marketing strategies to effectively grow their business.

We also want to welcome our new preferred partner, GeoLogix Solutions. Vist their website and see how they can help grow your business.  

This month's poll question: 


How often do you seriously evaluate your firm's errors and omission coverage?

1.         Every year
2.         1-2 years
3.         3-5 years
4.         Only when the rate changes significantly
Again, we want to thank everyone for their support, 
remember  to tell your friends and business associates that AgentsofAmerica.ORG is now offering FREE MEMBERSHIP. 


Bringing The Best Together


Brit Weimer, Esq.

Table of Contents
A Case for Business Accountability: Statutorily Limited Duty to Procure by Illinoise Insurance Brokers
By Daniel B. Meyer, Daniel J. Nolan and Edward (Ted) C. Eberspacher IV
acaseA Case for Business Accountability: Statutorily Limited Duty to Procedure by Illinoise Insurance Brokers 
By Daniel B. Meyer, Daniel J. Nolan and Edward (Ted) C. Eberspacher IV
A customer walks into your office and requests "complete" or "full" insurance coverage for a new package liquor and sundries store, scheduled to open for business in a month or two.  You procure general liability, commercial property and liquor liability policies of insurance for the customer's new business.  More than a year later, following the renewal of the policies, an employee is injured while working at the store.  Your customer does not have workers' compensation insurance.  Did you owe a duty to procure worker's compensation insurance in light of the customer's request for "complete" or "full" coverage?  Can your customer sue you for your failure to procure a workers' compensation policy?  What are your defenses?  Does your duty depend on whether you are a broker or an agent?  Does it depend on the history of your relationship with the customer?
eE&O Loss Prevention Tip 

By Brown & Brown

An agent wrote a homeowner's policy for his customer. When the agent went to inspect the property he was unable to gain access to the interior of the home and therefore only inspected the exterior of the home. Later that year a fire occurred in the home due to a malfunctioning pellet stove. The pellet stove was the sole source of heating for the home and therefore, was an unacceptable risk for the carrier. If the agent had inspected the interior of the home, he would have seen the pellet stove and not written the policy with this carrier.



 Ernest AgentClick here for Free Property & Casualty Sales Ideas




secondSecond Circuit Certifies Question to New York Court Of Appeals Re: Creation Of  Coverage By Estoppel Based Upon A Certificate Of Insurance
By Colleen Murphy, Esq. 
In 10 Ellicott Square Court Corp. v. Mountain Valley Indemnity Company, 2010 U.S. App
LEXIS 26035 (2nd Cir. (N.Y.) December 23, 2010),the Second Circuit noted the divergence between New York's Appellate Divisions regarding whether a Certificate of Insurance can create coverage.  In the First and Second Departments, courts have held that Certificates of Insurance are insufficient standing alone to provide a basis for estoppel.  The Third and Fourth Departments have held that where a party seeking coverage reasonably relied on a Certificate of Insurance issued by an agent of the insurer, the insurer may be estopped to deny coverage.  
expensiveExpensive Data
By Charles T. Wilson, CMC, CRM, RPLU
Yes, your data is valuable, and losing it can cost you a bundle in more ways than one.

Types of data loss ~ these breaches happen every day -

~ Hackers - especially foreign 'gangs' looking for 'ransomware'
~ Human error - deleting critical files
~ Viruses or 'malware' corrupting your or others' key databases


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willagentsWill Agents See Option to Expand Sales Opportunities?
By Insurance Leads
Are you an agent who knows the ins and outs of your licensing requirements?

In early 2010, the National Assn. of Registered Agents and Brokers Reform Act of 2009, known as NARAB II, reached approval in the U.S. House, but still needed backing in the Senate. Due to the fact this bill was introduced in a previous session of Congress, no more action can occur on it. The passage of NARAB would have led to a system where there is virtual uniformity through a comprehensive electronic database of producer details.
iowaIowa Supreme Court Heightens Duty Owed by an Insurance Agent
By David H. Luginbill, Esq. & Randall H. Stefani. Esq.
In Langwith v. American National General Insurance Company, et al., No. 08-0778, December 30, 2010, the Iowa Supreme Court reversed well established prior Iowa decisions and expanded the scope of the duty owed by an insurance agent to his or her client. This case involved a lawsuit against a captive insurance agent and her employer for failing to exercise reasonable care which allegedly resulted in the Plaintiff's partially uninsured exposure on a personal injury claim filed against the insureds.

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willtheWill the California Supreme Court Change the Insurance Landscape for Contractors?
By Wendy L. Wilcox, Esq.

The California Supreme Court recently granted a petition for review of Clarendon America Ins. Co. v. StarNet Ins. Co., a California Court of Appeals decision published in July 2010. The appellate court held that a subcontractor's insurer had a duty to defend the general contractor as an additional insured in a construction defect proceeding under the Calderon Act, California Civil Code section 1375 et seq. ("Calderon process") even though the Calderon process does not result in a judgment or court-ordered payment of money. Some insurers will provide a defense to the contractor under the Calderon process; others deny any obligation asserting the Calderon process is not a "suit" under a general liability policy.
The appellate court held that the Calderon process constitutes a "suit" as defined to mean a civil proceeding in which damages are alleged that triggers a duty to defend under a general liability policy. Specifically, the appellate court held that the term "civil proceeding" (contained in the "suit" definition) encompasses the process because it is a statutory proceeding that is required before a common interest development association, i.e., homeowners' association, could file suit for construction or design defect damages.



thebestThe Best Information Comes From Short Questions

By Mark Hunter, "The Sales Hunter"  
There's no better way to improve the quality of information you receive from a potential customer than by asking short questions. We all can recall far too many times when we've sat across the table from a customer we're trying to help - and we know we can help, if they would just provide us information about their needs and goals.

The problem is that no matter what question we ask, we get the same response: a big fat "I don't know" (or something along that line). Then, almost without thinking, we put on our super agent cape and start telling the person everything they need. Unfortunately, when it comes to getting a signature on the policy, the person turns cold. 

Read more... 
lettheLet the Still Moment Live - Happiness Does Not Come in a Box
By Ed Martinez
Sometimes when we are still for a brief moment, time seems to stop and everything around us might strike us as empty and meaningless. We stare into thin air and simply allow the moment to exist without interruption until forced to shake it off and let time tick tock again as reality sinks in. That strange phenomenon that's exists between our ears forces us to take notice from time to time and evaluate our very existence. What happens when we realize that life is far more than our surroundings? What is it that tugs at the guts and screams a silent voice of acknowledgement? 
This newsletter is produced in conjunction with Agents of America, www.agentsofamerica.org. The contents of which may not be reproduced without the express written permission of Agents of America.