E&O Weekly Prevention
Strategies for the Professional Agent
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June 28, 2012


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Letter from the Editor
This Week's Edition of AOA E&O Prevention 

Table of Contents     


An Endorsement To an Insurance Policy Restricts the Coverage Provided By the Basic Policy, the Endorsement Is Generally Controlling

By Thomas Paschos, Esq.


Understanging Voluntary Benefits Is Essential To Best Serving Employers and Employees with Sucessful Outcomes!

By Philip Eide 


Do You Have Coverage for Product Contamination Under Your Property Policy?

By Robert D Chester,Esq. 


Ninth Circuit Panel Finds Duty to Settle Where No Demand Made  

By Christopher J. Borders, Esq


Mid-year tax planning is more important than ever this year due to the uncertainty of post-2012 tax laws. The Bush-era tax cuts, due to expire on December 31, 2012, coupled with the controversial impact of "Obama Care" on taxes, may lead to confusion and uncertainty moving forward. Planning needs to be done now so you are prepared to move when and if clarity is delivered to the tax code. Mid-Year Tax Planning Tips.


We also would like to extend an invitation for you to join AOA's LinkedIn group at AGENTS OF AMERICA. Also our affiliated Insurance Open Network, a LinkedIn open networking group for all insurance professionals.

AgentsofAmerica.ORG has partnered with WebCE, a leading nationwide provider of Continuing Education for insurance professionals, to provide you with state-approved self-study CE courses to satisfy your CE requirements online! Check out your CE State Requirements.

Also available is our most recent edition of "AOA Tips, Views, News & More," including our new feature "Insurance Resources." Remember to tell your friends and business associates that membership in AgentsofAmerica.ORG is FREE! Also if you have any thoughts, comments or suggestions, please email me at info@agentsofamerica.org.

Wishing you and your families a wonderful and safe 4th of July.

"Bringing the Best Together"

Brit Weimer 



AOA News, Views, Tips & More


E&O Tip  

By Curtis Pearsall, CPCU, AIAF, CPIA of Pearsall Associates
The E&O Commitment of an agency is heavily determined by the commitment of their management 
A common phrase for management is that "the buck stops here". While this is true on many issues, from an E&O perspective, "the buck" not only stops with management; it starts with management. For an agency to have a strong E&O commitment and culture, management needs to "walk the walk" and "talk the talk". It would be very hard for the staff to be committed to doing the right thing when it evident that management does not always take this path. 


The best agencies (from an E&O perspective) are those where management sets a clear and concise message and clearly lays out the expectations of the agency. They are actively involved and interact with the staff to ensure that they are aware of the agency issues. They listen to the staff and respect their thoughts. They provide feedback to ensure that staff members grow because they know that when the staff grows, the agency grows. Many actively attend E&O classes to show their support and commitment. Clearly they lead by example. 
The goal of the agency should be for each staff member whether the responsibilities are those of a producer, account exec, accounting, claims, etc., to have a strong E&O commitment to themselves, their fellow team members and to the agency as a whole. Tasks are handled promptly and professionally, customers are treated with respect and conversations are fully documented in the system and back to the customer to address any potential misunderstandings. The staff is proficient not only technically but with sales and customer service training. Obviously, these objectives don't just happen.

Some items to show / enhance that E&O commitment:


 Regularly scheduled staff meetings - these are a great tool to ensure open and solid communication. It would be appropriate to take a portion of each meeting for education on some topic. This could be a technical topic, discussion on a new carrier form or new underwriting guidelines or possibly to address the questions that your customers are asking. Using the time to reinforce agency procedures and expectations such as documentation will ensure consistency and growth.

Education of the customers - help your customers understand what they have and what they don't. This will no doubt result in customers that feel respected. Possibly use a newsletter, paper or electronic, to communicate this information. 

Procedural review - are some of your procedures in need of some updating? If it has been a while since they have been reviewed, you may find some great opportunities to achieve gains in efficiency and professionalism.


E&O loss control seminar - attended by both management and staff. These can be extremely beneficial to help educate management / staff on the latest E&O issues.  

Bottom line, as management, are you happy with the E&O commitment / culture of your agency? A good starting point is to look in the mirror and ask yourself "what is my commitment?" Good E&O results don't just happen...they take a strong commitment from management to lead the way. 


For additional information, contact Curtis at curtis@pearsallassociates.com or visit Pearsall Associates.  





Why Should You Be Using LinkedIn to Generate Insurance Leads?
By Donald J. Dzubak of Parasol Financial & Insurance Solutions 


Social media forums are an effective and efficient way for financial advisor's and insurance agents and brokers to network and build their business and professional leads. One top social media outlet that has proven its effectiveness in developing a consistent leads flow is LinkedIn. 


LinkedIn is an on-line space where like-minded professionals from all over the world can come together to discuss and find: products, services, careers opportunities, and so much more.  It's worth your while to learn how to use LinkedIn to grow your business.   


To find out more about using LinkedIn to generate insurance leads for your business, check out this free report:


At ParasolLeads, our primary goal is to meet the needs of insurance agents by partnering and helping them land high quality insurance leads. To find out more give us a call today! Contact Donald J. Dzubak, Vice President Sales and Marketing -

www.ParasolLeads.com - don@parasolleads.com or 1-651-730-6619.




What additional services would you like to see from your E&O carrier?

Analysis and comparison of E&O between peer firms - 10%
Loss control, training & risk management - 70%
Nothing, just give me a low price. - 20%


Should Insurance Departments consider increasing the number of hours that Agents and Brokers need to maintain their license?

article1An Endorsement To an Insurance Policy Restricts the Coverage Provided By the Basic Policy, the Endorsement Is Generally Controlling
By Thomas Paschos, Esq. of Thomas Paschos & Associates, P.C.


In Gabriele v. Lyndhurst Residential Community, L.L.C., --- A.3d ----, 2012 WL 1758138 N.J.Super.A.D. May 18, 2012), Defendant Lyndhurst Residential Community entered into a contract with defendant Daibes Brothers to be the construction manager to construct a building called Riverside Plaza Development. Lyndhurst also entered into a contract with defendant Bravante Automatic Sprinkler to perform sprinkler work. This contract obligated Bravante to name Lyndhurst and Daibes as additional insureds under its comprehensive general liability policy, which had been issued by third-party defendant International Insurance of Hanover (Hanover). Bravante obtained an endorsement to its policy providing such additional insured coverage.













article2Understanding Voluntary Benefits is Essential to Best Serving Employers and Employees with Successful Outcomes!
By Call Philip Eide, President of BenefitPlace.biz and BPTradeShow.com


In this new Benefits Marketplace all Employee Benefits are becoming Voluntary! While Employer Sponsored Plans remain the main platform for individuals and families to gain access to Insurance related Plans, Programs, and Services, Employee "Choice" is becoming more prevalent. Sharing cost is the norm!

Historically there were two types of Employer based Plan Designs that often were not integrated - "Core" and "Voluntary/Worksite Plans"!  To gain integration, cost-savings, and an improved Benefit Design, Employers and Brokers are breaking down these barriers. Employees are provided "Choice" within traditional "Core" benefits and a menu of Voluntary Plans. 






Firebrand Social Media   





article3Do You Have Coverage for Product Contamination Under Your Property Policy?  
By Robert D. Chesler, Esq. of  Lowenstein Sandler PC 
The decision in PBM Nutritionals v. Lexington Insurance Company, No. 110669 (Va. Cir. Ct., April 20, 2012), highlights the hurdles a company must overcome when trying to obtain insurance coverage for a first-party loss involving 'contamination.' The case provides a guide for food companies on how best to structure their insurance programs to avoid pollution and contamination issues in first-party policies. 




articlefourNinth Circuit Panel Finds Duty to Settle Where No Demand Made
Insurance Coverage Alert
By  Christopher J. Borders, Esq, of Hinshaw & Culbertson LLP 


A panel of the U.S. Court of Appeals for the Ninth Circuit recently predicted that California courts will obligate insurers "to settle" claims rather than just "accept reasonable demands within policy limits." In Du v. Allstate Ins. Co., 2012 WL 2086584 (9th Cir. June 11, 2012), plaintiff (the "Passenger") was one of four persons injured when a vehicle driven by an insured of defendant insurer collided with the automobile that she occupied. Lawyers for the Passenger and her co-passengers (collectively "the passengers") informed the insurer that they would make demands against the policy, which had limits of $100,000 per claimant and $300,000 per accident.   
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.