E&O Weekly Prevention
Strategies for the Professional Agent
March 28, 2013


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Letter from the Editor

Insurance Agents Claims on the Rise

See Dan Meyer video on Wrin.tv, also download Dan's Chapter 1 "Insurance Producer Licensing" below



Defense attorney Dan Meyer with the O'Hagan law firm, discussed the growing trend in insurance agents professional liability, and the chapter he wrote on  licensing for a new eBook on how  to avoid E&O claims



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   


No Insurance for Sandusky Sex Abuse


Coverage for Blanket Additional Insured Is Limited to Vicarious Liability of the Named Insured


Has the Duty to Defend Framework in California Been Turned on It's Head? 


Insurers Lose Defense Reimbursement Battle in Washington State



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:

Insurance Europe told EIOPA the trade association was concerned about Interim measures being implemented while Solvency II is delayed. And, EIOPA agreed to develop insurancwith The World Bank.


FERMA shares concerns about the Insurance Mediation Directive, calling on the European Parliament to ensure IMD2 disclosure standards for all insurance buyers are equal.


As the line between economic and political risk continues to blur, WRIN.tv reviews Aon's new Political Risk Map.


Deloitte sees a more conducive atmosphere for mergers and acquisitions in the insurance industry. We look at their Top 10 list of issues affecting M&As in 2013.


Marsh released its Benchmarking Report on trends in cyber Insurance. Network Security & Privacy Practice Leader Bob Parisi discusses one of the fastest growing lines of insurance globally.


Defense attorney Dan Meyer with the O'Hagan law firm, discussed the growing trend in insurance agents professional liability, and the chapter he wrote on  licensing for a new eBook on how  to avoid E&O claims.


In the last of a series of talks with  Dr. Wendy Lynch from the Altarum Institute, she explained how to foster "consumerism" in health care...despite historical precedent and government intervention.


Dr. Lynch also revealed how a more rational approach to employer purchases of health insurance can save $1,000-$3,000 per employee...per year


Click on the link above to watch the fully edited program from our On Demand Library.


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 "What if you were Number One..For Two Straight Years?"

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


By Deborah Dutton Lambert and Daina R. Dennis of Encompass Training Progra


Mental Health in the Workplace 


Consider what it would be like to have a serious illness that negatively impacts your sleep, your effectiveness at work, your family life and your entire outlook on life in general? What would you do if you found out that this illness has a treatment success rate of 70% to 90%? Would you decide to get treatment or continue to struggle with the symptoms? Unfortunately about two thirds of the individuals with this illness do not seek treatment and continue to struggle! Compare this to a diagnosis of heart disease, which has a treatment success rate of about 50%.  Would you see the same percentage of individuals not getting treatment? Of course not!


So why do so many individuals with depression and/or anxiety not seek treatment? The reasons are many and complex, however, two primary ones are the stigma surrounding these neurobiological illnesses and a basic lack of understanding of how truly treatable these illnesses are.


Stigma erodes the confidence that mental health disorders are real, treatable health conditions. As such, stigma has erected both attitudinal and financial barriers to effective treatment and recovery. We at Encompass believe that an important place to address these barriers is within the business community. Currently, stigma within the business community is still strong as is exemplified by the fact that many of the organizations we have talked to still do not want to even use the words mental health disorder (and certainly not mental illness) within their organizations, but opt to use words like stress reduction or stress prevention. Stress reduction and prevention are certainly important in the workplace, however, the 1 in 5 who are actively struggling with a mental health disorder usually do not benefit from these programs, as they require medical treatment beyond basic corporate wellness programs.


There is no health without mental health.  Mental health is the foundation of our physical, social, and spiritual well-being.  Mental health is fundamental for the optimal well-being of individuals throughout the life span and for the well-being of the entire community (D. Ramsay, 2012).  Again, let's ask ourselves why this important life domain is virtually ignored by Corporate America?  The answer is the same as why it has been ignored by our society.  We view people with mental health conditions as "less than".  They are considered as not promotable, as not belonging in powerful or responsible positions, or even potentially violent.   Until we can have the same paradigm shift in thinking about mental health as we did about diversity in the 1970's, the situation will not improve, regardless of the improvements in treatment.   People who struggle with this neurobiological illness will continue to struggle in silence, as they fear ridicule, disrespect, and alienation from co-workers- simply stated as stigma in the workplace.


Innovations to treatment

There are many effective approaches to treatment for mental health conditions.  Approaches to treatment may include both psychotherapy and the use of medications. An individual's response to treatment is often governed by the seriousness of the disorder, the person's response to psychotherapy, and the person's response to medications (if used).

Recently a blood test for depression has been developed that will be available in the US some time in 2013 through Ridge Diagnostics. This blood test, called the MDD Score will be the first "objective diagnostic measure" for the disorder-which means you can get a diagnosis of the disease based on biological markers. You get a numerical score that suggests how likely it is that you have depression. The MDD score has the potential to improve treatment by identifying the disorder early when it is most treatable. In addition, patients may be more accepting of treatment because of a tangible blood-test result. Suddenly the patient sees a blood test that says 'this is your disorder.' It's like any other disorder. It's not in your head. It's meaningful. It's not your fault. The stigma abates and they become more involved in their own care." (A New Blood Test for Depression Proves It's Not All In Your, 1/ 25/ 2013)

If a blood test can confirm a neurobiological condition, will it be enough for Americans to have a shift in consciousness that depression and other mental health conditions are not a weakness in character, not something to be feared, but a condition that has high treatment success rates, even higher than those for cancer or heart disease?  At Encompass we hope the answer to this is YES!


For treatment to work, individuals struggling with mental health disorders must seek it. Only through the understanding facilitated by education can we knock down the barriers to treatment erected by stigma. Mental health literacy is an essential component to any company that has the desire to make a shift in culture to acceptance and understanding of mental health that will lead to healthy employees and healthy organizations.


This Month's Tip


12 questions to ask a prospective employee assistance program provider



For additional information on the Encompass Program

 or to contact Deborah Dutton Lambert or Dr. Daina Dennis.



Form W-2 Reporting of Employer-Sponsored Health Coverage                                   
By Aaron Peterson at CenterPointe Solutions Inc.


Beginning with calendar year 2012 Forms W-2 employers that provide a group health plan to employees and who have not been granted transitional relief generally must report the cost of the coverage provided to each employee annually.


This requirement does not apply to employers that were required to file fewer than 250 Forms W-2 for the preceding calendar year, unless and until the IRS publishes further guidance giving at least 6 months' advance notice.


The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable. The value of the employer's excludable contribution to health coverage continues to be excludable from an employee's income, and it is not taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.


Employers that provide "applicable employer-sponsored coverage" under a group health plan are subject to the reporting requirement. This includes businesses, tax-exempt organizations, and federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families). However, federally recognized Indian tribal governments are not subject to this requirement.


For additional information, contact Aaron at aaron@mycpsinc.com - 800-340-5856 or visit CenterPointe Solutions Inc. at www.centerpointesolutionsinc.com




Results of Last Poll Question


What coverage options would you like to see added to your E&O?


a) 14%          Broad based coverage for insolvency claims                                   

b)  0%           Ability to reduce deductibles for certain loss prevent measures

c)  86%         Automatic coverage for data theft/privacy breach



This Week Poll Question


Choice of broad terms vs. cheaper coverage


a) No way. I need the best protection I can purchase for my agency.

b) Depends on what is reduced in the coverage to offset the premium amount.

c) Yes. I want the least expensive coverage I can buy.




No Insurance for Sandusky Sex Abuse 

By Kevin M. Mattessich, Esq. & Daniel H. Brody, Esq. of Kaufman Dolowich Voluck & Gonzo LLP


When a director, officer, or employee of an insured entity is sued, liability insurers often face the question of whether the person was sued in an "insured capacity." Naturally, liability insurance products, such as D&O and E&O policies, should extend to executives and employees of an insured only to the extent they are sued individually with respect to their position with the company. Often, however, the lines are blurred where an individual is alleged to have committed malfeasance and there is an issue as to whether the individual was acting in a purely personal capacity or acting under the color of their corporate position. The recent court decision involving the lamentable Jerry Sandusky/Penn State child sex abuse scandal demonstrates the challenges a court may face in addressing capacity issues surrounding an individual's alleged malfeasance.


















By Anthony N. Balice, Esq. of Tressler LLP


The Minnesota Supreme Court found that Travelers Indemnity Company of Connecticut did not owe an obligation to provide additional insured coverage to a contractor under a blanket additional insured endorsement after a jury determined that the subcontractor, and "named insured," was neither negligent nor liable for damage to a sewer pipeline. Engineering & Construction Innovations, Inc. v. L.H. Bolduc Co., 2013 Minn. LEXIS 7 (Minn., Jan. 23, 2013).





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Has the Duty to Defend Framework in California Been Turned on it's Head?   

By Samuel J. Muir, Esq. & Stephen B. Litchfield, Esq. of Collins Collins Muir & Stewart LLP


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