E&O Weekly Prevention
Strategies for the Professional Agent
March 26, 2015
Agents of America


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AOA News, Views, Tips & More



Selling Smarter Cyber - Privacy Risk Management Practices Your Clients Need to Know   

Register Online

NAS Insurance and ePlace Solutions for this important update on effective approaches to presenting Cyber Liability insurance to your clients. Call it Risk Management call it Loss Prevention. But make sure it's part of your pitch and part of your client's business.


California Jury Finds "Blurred Lines" Infringed "Got to Give It Up": Society's Mixed Signals on Copying and Intellectual Property Rights

By Adam R. Bialek, Esq. of Wilson Elset Et al.


On Tuesday, March 10, 2015, a California federal jury returned a verdict finding that Robin Thicke and Pharell Williams had copied Marvin Gaye's 1977 song "Got to Give It Up" when writing Thicke's 2013 hit, "Blurred Lines." The media immediately reported this decision as a major development in music law, finding the award of $7.36 million in damages to be monumental and practically unprecedented. The New York Times, giving the story the coveted Column Six position in the "Business Day" section, cited an intellectual property lawyer who called the jury's verdict a "bad result" that "will cause people who want to evoke the past to perhaps refrain from doing so." 

Independent Contractors and the Noncompete Agreement

By Marc J. Zimet, Esq. of Jampol Zimet, LLP


There are many advantages to employers in hiring independent contractors in lieu of part or full time employees. For starters, employers do not have to pay payroll taxes, minimum wage or overtime, or provide meal and rest breaks to independent contractors. Nor do they have to cover the contractors under their workers' compensation insurance, unemployment insurance, disability, or social security. However, hiring an independent contractor can also pose risks to an employer. Especially in today's business world where technology and electronic data can be valuable and relied upon by companies, the risks posed by an independent contractor who works for similar and competing organizations can be great.


Public and Private E-mails Don't Mix

By Seth L. Laver, Esq., Jennifer M. Mannion, Esq. and Michael D. Brophy, Esq. of Goldberg Segalla


Hillary Clinton recently made headlines for using her personal email account for business purposes during her tenure as Secretary of State. This high profile example provides us with an opportunity to reflect upon what is commonplace for some.  It can be tempting for employees to use personal email accounts to conduct corporate business, particularly when working remotely.  However, the highly sensitive nature of Clinton's job raised questions over the security of using a non-work email account to transmit information. Depending on the nature of your job or the emails that you send, there are risks when mixing personal and business e-mails.


Misrepresentation in Renewal Application Voids Professional Liability Policy

By Terrence P. McAvoy, Esq. of Hinshaw & Culbertson LLP


Illinois State Bar Association Mutual Insurance Co. v. Law Office of Tuzzolino and Terpinas, 2015 IL 117096, 2015 WL 728111 (2015) 


Brief Summary 

The Illinois Supreme Court held that an insurer rescind a professional liability policy because it was procured with a false statement of facts, even though another attorney with the firm did not know about the misrepresentation

Nondisclosure Agreements Prevent Local Law Enforcement From Acknowledging It Can Search Cell Phone Without A Warrant

By Ramsay C. McCullough, Esq. of Jackson Lewis P.C.


With the pervasive use of smart phones in business and with those phones often containing confidential personal and business information, employers should be aware that law enforcement may not only conduct a warrantless search of that information, but also may take that information without the public even knowing it has that ability. In January 2015, the FBI took the position that court warrants are not required when deploying cell-site simulators, known as "stingrays," "kingfish" or cell site simulator, in public places which imitate cell phone towers and capture the locations, identities, calls, texts, and emails of mobile phone users. This small rectangular device that is small enough to fit into a suitcase. 

No Coverage Under Professional Liability Policy Where the Insurer Was Aware of Information Regarding Alleged Misconduct By Its Insured_ But the Insured Did Not Report Any Claim During the Policy Period

By Monica R. Dean, Esq. of Tressler LLP.


Professional liability insurer did not receive "constructive notice" during its operative policy period of an underlying dental malpractice claim against its insured, Dr. Hamid Ahmadi, D.D.S. Physicians Insurance Company of Wisconsin Inc. v. Glenn Williams, No. 54126, Nev. Sup.; 2012 Nev. LEXIS. (June 28, 2012).

Insurers Have No Duty To Defend Chiropractor Against Failure To Warn of Sexual Assault Claim

By Brian R. Biggie, Esq. and Joel J. Terragnoli, Esq. of Goldberg Segalla


In Hanover American Insurance Co. v. Balfour, 2015 U.S. Dist. LEXIS 874 (10th Cir. Jan. 21, 2015), the U.S. Court of Appeals for the Tenth Circuit affirmed an Oklahoma federal district court's rulings in favor of two insurers arising out of a claim against a chiropractor for negligent failure to warn her patient of the insured's husband propensity to commit a sexual assault.  The Tenth Circuit first found that under the subject chiropractor's malpractice policy, the underlying complaint failed to allege "professional services."  The Tenth Circuit also found that under the business owner's or general liability policy, the underlying complaint failed to allege the "personal and advertising injury" offense of



Illinois Schools Face Tough Decisions in Combating Cyber-bullying

By Melissa K. Ventrone, Esq. and Jonathan E. Meer,

Esq. of Wilson Elser Et al.

Illinois, like most states, has a law that addresses

school districts' responsibilities for addressing bullying in schools. With the growing presence of cyber-bullying, as of January 1, 2015, Illinois modified section 27-23.7 of the School Code, Bullying Prevention, to include specific references to cyber-bullying. While schools are adopting cyber-bullying policies and are required to have a procedure to investigate such incidents, are students' passwords on social media websites fair game? There appears to be tension between the Bullying Prevention statute and certain exceptions in the Illinois Right to Privacy in the School Setting Act (School Privacy Act), which permits secondary schools to request social media passwords if there is a potential violation of a school policy. Thus, school districts' compliance with the new amendments to the Illinois School Code may be more complicated than previously thought.



By David E. Barker, Esq and Erin Dunkerly, Esq. of Collins Collins Muir + Stewart LLP


Yes, "brochurebiage" is a word we made up. It refers to that optimistic and puffed-up verbiage that can creep into a professional's brochures or other promotional materials. Many people are rightfully proud of their past work and skill and need to sell that experience and ability to prospective clients. However, use such language with caution.


Legal Updates for Coverage and Bad Faith

Edited by Allison L. Krupp, Esq. of Marshall Dennehey Warner Coleman & Goggin, P.C



Motion for summary judgment on stacking issue denied where policy number for the policy in effect at the time of the accident was different than the policy number for the policy in effect at inception.


Connolly v. Progressive Northern Ins. Co., et al., No. 3:13-cv-2717 (M.D. Pa. Feb. 4, 2015)

Letter From  the Publisher


Protecting Your Reputation


As every Insurance Agent knows, their most important asset is their reputation, it takes years to build and just one mistake to ruin. Understanding the issues is the first steps in avoiding E&O Claims. AOA has created a three book series dealing with 56 different E&O topics and issues agents face every day. Enter promo code
WPD20 at checkout for an additional 20% discount.


Book One - 

A Comprehensive Guide To Avoiding E & O Claims

20 Chapters - 450 pages


This book addresses the broad swath of risks from which claims against insurance agents arise. It provides clear and concise risk management and risk-avoidance guidance, and provides solutions for each of the potential claims issues. It also provides comprehensive discussion of the legal issues that may arise in such claims and how the various states treat those issues.

This is Book One, the primary focus of this book is to provide insurance and legal professionals with keen insight into the issues that insurance agents face on a daily basis. While our society is more litigious than ever, through education and awareness, insurance agents can better understand this legal society and take the necessary proactive steps to minimizing the chances of their agency facing some form of E&O litigation.


Book Two - 

E&O Exposures in the Sales Process

18 Chapters - 587 pages


This book identifies and explains the E&O issues and exposures related to the typical new and renewal sales process within insurance agencies. Solid detail is provided addressing the E&O exposures for agencies during the pre-sale, sale and post-sale periods. The course addresses such issues as the legal duties of both the agents and their customers, the critical importance of education of both the staff and customers, the benefits of account reviews and the power of a signed application. Throughout each chapter, best practice solutions are provided to help agents manage those exposures.

This is Book Two, the primary focus of this book is to provide insurance and legal professionals with keen insight into the issues that insurance agents face on a daily basis. While our society is more litigious than ever, through education and awareness, insurance agents can better understand this legal society and take the necessary proactive steps to minimize the chances of their agency facing some form of E&O litigation. 


Table of Contents

Book Three - 

E & O Exposures By Line of Business

18 Chapters - 746 pages

This book identifies the unique E & O issues and exposures of the various lines of business, including personal auto, homeowners, general liability, directors and officer's liability, and employment-related practices liability. Each chapter contains solid detail for a specific line of business, and provides best practices and solutions to help agents manage those exposures.

This is Book Three, the primary focus of this book is to provide attorneys and insurance professionals with keen insight into the issues that insurance agents face on a daily basis. While our society is more litigious than ever, through education and awareness, insurance agents can better understand this legal society and take the necessary proactive steps to minimize the chances of their agency facing some form of E&O litigation.


Do You Need Continuing Education?

Complete your entire State-Required CE Online with WebCE! AOA 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. 


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Angelo J Gioia

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