E&O Weekly Prevention
Strategies for the Professional Agent
March 21, 2013


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Letter from the Editor

Chapter 1, "Insurance Producer Licensing" from "Book One" is available for download                         
"Insurance Producer Licensing," written by Daniel B. Meyer, attorney at O'Hagan LLC. The first chapter begins as an insurance producer's profession begins: licensure. The authors compiled the licensing schemes from all fifty states and the District of Columbia and pulled from that compilation the common threads - the licensing requirements that are consistent across all jurisdictions of this country. They then highlight where the various jurisdictions differ, and how. The topics addressed range from age and education, pre-licensure coursework and testing, fees, and maintenance, suspension, revocation and non-renewal of producer licenses



"Insurance Agency Risk Management: A Comprehensive Guide to Avoiding E&O Claim - Book One"!  

"A Comprehensive Guide to Avoiding E&O Claims" addresses issues that Insurance Agents & Brokers encounter every day. One of the most important assets an agent has is their reputation; it takes years to build a business and only one mistake to ruin it. "Book One" is a practicable guide and resource that every Insurance Agency should read and use as an effective risk management tool. "Book One" is now available on Barnes & Noble and on Amazon




This week's edition of AOA E&O Prevention:


Table of Contents   



A review of the top stories on World Risk & Insurance News at WRIN.tv
Here is your opportunity to see the online video news stories you may have missed on WRIN.tv: 

We spoke with John Phelps, the new RIMS president.  

A.M. Best

In another 2-part interview

We looked back at our coverage of the IRMI Energy Risk and Insurance Conference in Houston, with highlights from discussions with leaders from

  • Julian Garrish & Anthony Rynne from JLT PARK see tight market conditions pushing up XS casualty prices.
  • Michael Ruehman from Wortham Insurance on first party casualty and pollution coverage for energy companies.
  • ArgoRe - 
    Deirdre Lohan from Argo Re says Macondo loss and recent court decision is a "game changer."
  • Julia Palmer, a lawyer at Looper Reed & McGraw, on litigation, regulation, pollution and risk management in the energy market

Saxe Doerenberger & Vita



For more of the online video news affecting the world of risk and insurance, visit the World Risk and Insurance News website at www.WRIN.tv.    

Also listen to Insurance Expert George Nordhaus "Monday Morning" on Turning leads into real prospects...    

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." & "Recommended Reading".  Remember that membership in AgentsofAmerica.ORG is FREE! Also if you have any thoughts, comments or suggestions, please email me at info@agentsofamerica.org.



"Bringing the Best Together"

Angelo J Gioia





AOA Tips, Views, News & More


How Enhancing Your File Documentation Can Make Your Customer More Accountable

By Curtis M. Pearsall, CPCU, AIAF, CPIA of Pearsall Associates Inc.


For years, E&O seminars have heavily focused on the issue of documentation. This is primarily due to the premise that the quality and depth of file documentation is a major factor in determining which direction an E&O claim goes. Solid documentation can literally stop a potential claim in its tracks while poor documentation may hurt your agency defense more than you can imagine. 


Most agencies have an expectation for documentation. Is this expectation actually documented and thoroughly known by all staff? It should be if you truly want to instill in your agency the importance of documentation. Some of the areas where documentation is critical:


The phone - the issue isn't whether agency staff are aware that phone messages need to documented in the paper file or in the agency management system; most staff are well on board on that issue. The primary issue deals the depth of the documentation and the timeliness of when the conversation is memorialized. What if the documentation read "spoke with insured regarding homeowners' coverage"? Is this acceptable in your agency? It shouldn't be. If someone else picked up the file or read the notes in the system / file, would they totally understand the essence of the conversation? If not, then your documentation is not at the necessary level. In addition, for producers or actually for any agency staff that utilize cell phones to interact with customers, carriers, etc., are those conversations being documented in the system as well? They need to be! 


Did you totally understand what the customer was asking or did the customer totally understand what you told them? Maybe, maybe not. Probably every day, there are conversations that occur where there was a misunderstanding between what the customer told you and what you heard. When are those misunderstandings discovered? Typically at claim time. As a result, simply documenting in the agency system what the customer told you (or thought they told you) is not enough. What is the solution? The most effective means is to document back to the customer your understanding of the conversation. This should be in writing and for many agencies that have adopted this approach, a quick e-mail or letter is doing the job. Something to the effect of:


Mr. Jones, per your request, we have deleted all coverages on 410 Main St. If this is contrary to your understanding, please contact the agency as soon as possible.


Maybe they really only wanted the property to be deleted but the liability left in force


What this accomplishes is that it puts the responsibility on the customer to advise you if what you heard is not what they requested. The goal is to identify any misunderstanding before the claim occurs, not after it.


As you provide proposals for your customers, be sure to provide options for consideration. In other words, just don't provide a proposal for $1,000,000 umbrella; provide options for greater limits as well. This will let the customer know that higher limits are available and that you not "recommending" a specific limit. In addition, requesting their sign off on the options that they don't want to pursue is extremely valuable and highly recommended.


In addition, include in your proposals the definitions and explanations for key terms and phrases. This will greatly assist your customer is understanding the coverage that they have and how it works. At the end of the day, this makes them more accountable.


If the discussion deals with the multitude of "what if" questions involving issues such as "do I need to buy the physical damage when I rent a car" or "I see that my policy has a co-insurance provision - what does that mean?" These discussions need to be thoroughly and promptly documented not only in the agency file but with a letter back to the customer. If you knew that the customer was documenting the conversation, would you approach it any differently? Good, because they probably are. 


To ensure that the staff knows the importance of documentation, there are a couple of approaches to consider. At virtually every staff meeting, the issue of proper documentation should be discussed. In addition, as quality control reviews of each of your staff member are performed, the issue of documentation should be addressed and evaluated. The focus should be on the quality and timeliness of the documentation. In addition, while it is understood that abbreviations may be in order, the agency should develop a list of acceptable abbreviations to avoid confusion. Also establish guidelines for when the documentation should be entered. The greater the time between the conversation and the documentation, the greater the chance that the information is not as complete or as accurate.


Probably from time to time, the discussions that occur between the agency and the customers can get a little emotional. When you look to document these discussions, be sure to keep the notes professional. Something like "spoke with Curt regarding his homeowners insurance - can't believe that we insure someone so stupid in our agency". Might be true but definitely not appropriate for the file as all levels of documentation are discoverable in the event of litigation. Look for your documentation to pass the jury test; there should not be anything in the file that you would not want a jury to read.


Although the main aspect of this discussion dealt with documentation with your customers, it is equally important that conversation with your carriers, wholesalers, etc. be documented. Once again, the file should speak to all of the discussions that took place. Without documentation, it will be your word against theirs and it is hard to say who is going to win.


While quality and timely documentation may not prevent you from an E&O claim, there is no doubt that there is nothing as important that will determine the direction that the claim goes more than documentation. It also might make your customer more accountable for their buying decisions


For additional information, contact Curt at curtis@pearsallassociates.com or 315-768-1534




Email Prospecting: An Example of a Bad Email Transformed

By Mark Hunter "The Sales Hunter"


"For years I've collected and saved examples of good and bad emails.


We've all received bad emails and I'm pretty certain we are all guilty of sending a few bad emails as well. The example below is an email a friend sent to me. (I've changed specific names and companies mentioned, because these details are not relevant to the points I'll be sharing).


The company sending this email was looking to help the prospect recruit partners. This email had a lot of potential, but based on how it was, written it failed on many levels.

Bad Email Example:


Subject Line: Recruiting Your Channel Partners

Dear Jim-


I was curious if you had any concerns about how your channel partners will hit your revenue goals or if you are trying to figure out what is and isn't working in your partner community. I know firsthand how frustrating and challenging it can be to keep partners focused on your products, so your revenue goals are met...without busting your budget.

We've had tremendous success with companies like ABC Corporation, where we drove 150% net new business, when we worked with XYZ Inc. we were able to reduce partner cost by 50% and we helped ACME Inc. close $1.2M in new business in 6 months.

Would it make sense for us to chat? If you do not have any concerns about your partner program, then I want to respect your time and there would be no need to chat. If, however, you have areas you are trying to address, I'd like to learn what those challenges are. Would you be so kind to let me know if you feel quick chat would be valuable to you?

Have a great weekend!

What's wrong with this email? Here are 5 issues that are glaringly wrong:

  • Way too long - 184 words
  • Opening sentence screams "I want to sell you something"
  • Uses "Dear" as part of the salutation - it screams you don't know them
  • The email is all about the sender
  • Very weak call to action

I've taken the time to revise the above email to show how it could have been more effective.

Good Email Example (Revised from above):


Subject line: Amco



I saw Amco recently joined your partner program, as part of your strategic plan to go after ABC's market share. There are a couple of key techniques that you can leverage to recruit highly successful partners, while reducing your partner cost by as much as 50%.

I have time on Wednesday afternoon or Friday morning to share these strategies with you. What openings do you have on those days?

Why does this email work?

  • Subject line is relevant to the prospect's responsibilities, which were found in a quick Google search on the company.
  • It is short and easy to scan - powerful 75 words
  • Mobile friendly.
  • It mentions their internal strategy, which was found in a quick Google search about the company.
  • The body is relevant to the prospect, as they are responsible for recruitment and budget.
  • The call to action provides value and provides options of days to further discuss the possibilities.

Email marketing can be slimmed down to a very simple process.

We as email prospectors feel like we need to show our prospects how great we are and we tend to want to tell them everything in our brain. Neither of those approaches is correct and will only lead to failure.

I hope you can use the above example to start transforming your email marketing in a way that will result in tremendous success! To see the other posts we have done in this series, check out the below:


Three Opening Sentence Strategies to Get Your Email Read

Three Strategies to Get Your Email Read

3 Fatal Mistakes When Email Prospecting


Guest post written by Beth Mastre, Vice President Strategic Development for The Sales Hunter. For the past 20+ years, Beth has honed her email marketing skills, not only out of sheer necessity, but also because she is passionate about connecting with people and helping them succeed. Beth's experience and knowledge on this topic is truly second to none. Her experience is invaluable to The Sales Hunter and to other clients who look to her for guidance and advice. You can email her or call her at 402-614-7080.


For additional information, contact Mark at 402.445.2110 or Mark@TheSalesHunter.com

Copyright 2013, Mark Hunter "The Sales Hunter." Sales Motivation Blog.


Insurance Coverage Tip

By Alison Slezak of Martin & Company

New Technology E&O Programs


With an ever-increasing reliance on technology to effectively and efficiently run a business, Technology E&O Insurance Policies are becoming more essential to protect a company from the overall threat of network security. Almost all companies today have an online presence whether through a website, social media or E-Commerce which poses liability concerns when dealing with sensitive information.


Great American Insurance Company recently introduced three new Technology E&O Programs:ThinkInformationRiskThinkPrivacyRisk and ThinkContentRisk. These coverages are designed to protect businesses and organizations that do less than $50 million in revenue from the converging technology and media risks they face as a result of doing business in this electronic age.


ThinkInformationRisk provides comprehensive coverage for Data Security, Privacy Liability & Media/Content Liability, while ThinkPrivacyRisk offers standalone Data Security & Privacy, and ThinkContentRisk offers standalone Media/Content Liability Coverage.


The ThinkInformationRisk rating plan includes various factors that can be applied for Number of Annual Transactions, Number of Records Stored, Risk Classification, etc.  Increased Limit Factors are available for 1st Party Expenses and 3rd Party Liability up to $5 million. Additional Coverage for Independent Contractors is available as well as an E&O Credit.


For additional information, contact Alison at Tel: (610) 325-4455 or aslezak@martincompanyus.com To view more "hot trends" in the Property & Casualty Insurance Marketplace, visit:

Martin & Company's Market Trends & Updates




Insured v. Insured Exclusion Held Ambiguous When Applied to FDIC in Failed Bank Litigation


Due to the "multiple roles" in which the Federal Deposit Insurance Corporation acts in pursuing claims against the former directors and officers of a failed bank, the Northern District of Georgia found ambiguity as to whether the Insured v. Insured exclusion applies to preclude coverage. Progressive Cas. Ins. Co. v. FDIC, No. 1:12-cv-1103 (N.D. Ga. Jan. 4, 2013).


















Insurer Funding a Defense is Not a Co-Client Entitled to Privileged



In CAMICO Mut. Ins. Co. v. Heffler, Radetich & Saitta, LLP, Slip Copy, 2013 WL 315716

(E.D.Pa. January 28, 2013), CAMICO Mutual Insurance Co. insured Heffler, Radetich &

Saitta, L.L.P. ("Heffler") which was sued for misappropriating class action settlement

proceeds. In response to the suit, Heffler selected its defense counsel, Conrad O'Brien

P.C. ("O'Brien firm"), and CAMICO agreed to pay defense counsel's fees.

CAMICO filed a declaratory judgment action seeking a finding regarding the available policy

limits. CAMICO sought production of certain documents related to the underlying lawsuit.

Heffler refused, and CAMICO moved to compel. CAMICO argued the application of

exceptions to the attorney-client privilege, which the parties agreed would have otherwise

protected the documents from production.





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Additional Insured Coverage Cannot Be Divorced From the Concept of Fault

By James S. Fuller, Esq. of Hinshaw & Culbertson LLP 


Engineering & Construction Innovations, Inc. v. L.H. Bolduc Co., Inc., ___ N.W.2d___, 2013 WL 238199 (Minn. 2013).

On January 23, 2013, the Minnesota Supreme Court issued an opinion holding that a commercial general liability (CGL) policy issued to a subcontractor provided additional insured coverage to a contractor only for vicarious liability arising from the subcontractor's negligent acts or omissions.



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. Copyright 2013