E&O Weekly Prevention
Strategies for the Professional Agent
May 28, 2015

Agents of America


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AOA News, Views, Tips & More

How Does Your E&O Carrier Help You?

By Joseph L. Petrelli, ACAS, ASA, MAAA, FCA (MBA) and President of Demotech, Inc.


The stereotypical mantra of the real estate agent as regards marketing a property is "location, location, location." Where the property is located is critically important to its appeal.  Is it located in a great school district, convenient to shopping, near interstates or cultural activities?  "Location" is repeated three times because no one thing matters more than that.  If this is the case in real estate, I respectfully suggest that the comparable mantra for independent insurance agents and producers is "markets, markets, markets."   Nothing is more critical to fulfilling the needs of your clients than carriers. 


Beware of Holes in Your Cyber Insurance Policies

By Joshua Gold, Esq. of Anderson Kill P.C.


A brand new decision from a federal trial court in Utah is a sobering reminder that just because you have purchased "cyber" insurance does not mean that your insurance company will pay a cyber-related claim. 


In Travelers Property Casualty Company of America et al. v. Federal Recovery Services et al., the insurance company sued its policyholder for a declaration of no coverage under a CyberFirst liability insurance policy it had sold. The policyholder was in the business of processing and storing data for its clients. In this case, the policyholder was storing and processing data for a client that offered fitness center memberships. 


Allegations of Purposeful Data Withholding Do Not Trigger Cyber E&O Coverage

By Joseph F. Bermudez, Esq. and Suzanne M. Meintzer, Esq. of Wilson Esler


In Travelers Property Casualty Co. of America v. Federal Recovery Servs., Inc., Case No. 2:14-CV-170 TS (D. Utah May 11, 2015), the United States District Court for the District of Utah held that where a cyber liability policy's insuring agreement requires "any error, omission or negligent act," a claimant's allegations that the policyholder purposefully withheld data belonging to the claimant did not trigger the insurer's duty to defend.


Court of Appeal Holds Insurer Has no Duty to Insure Where Insured Has Knowledge of Underlying Facts of Potential Claims

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


On April 10, 2015 the California Court of Appeal issued a decision holding that an insurer has no duty to insure against claims where the underlying facts of those claims are known to the insured during the application process but not disclosed. This case turned on the insurer's application and policy provisions, which clearly provided for the exclusion of claims of which the insured disclosed or should have disclosed. Because the insured had knowledge of the underlying claims and therefore should have disclosed them, the insurer properly denied coverage.


What Constitutes Harassment? Impact of New Law

By Seth L. Laver,Esq., Dove Burns, Esq. and Michael F. Lettiero, Esq. of Goldberg Segalla


Retaliation and harassment are the most commonly filed employment law claims nationwide. After the Fourth Circuit's recent decision in Boyer-Liberto v. Fountainbleau Corp., No. 13-1473 (4th Cir. May 7, 2015) lawsuits alleging hostile work environment and harassment will only be more difficult for employers to dispose of.  The Fourth Circuit held that a single instance of harassment may create an actionable hostile work environment claim, and that an employee can be protected from retaliation when complaining about harassment, even if the purported harassment is ultimately not severe enough to create a hostile work environment.


By Peter R. Bulmer, Esq. of Jackson Lewis P.C.


On April 30, 2015, the Wisconsin Supreme Court issued its long-awaited decision in Runzheimer Int'l, Ltd. v. Friedlen, settling a dispute in Wisconsin over whether continued employment alone was sufficient to bind an employee to a non-compete agreement. The case involved an important, if nuanced, distinction between (a) whether there is a legal "agreement" in the first place and (b) whether that legal agreement is enforceable. If there is no legal agreement, then there is nothing to enforce. If there is a legal agreement, the question becomes whether the restrictions themselves are enforceable (based on their reasonableness, etc.). The former question was addressed in Runzheimer.

No Potential Insurance Recovery for Assignees Where Settlement Agreement Between Insureds and Assignees Was Fraudulent

By Elizabeth L. Musser, Esq. of Tressler LLP


The U.S. Court of Appeals for the Ninth Circuit affirmed the U.S. District Court for the Northern District of California's finding that assignees could not potentially recover insurance proceeds where the subject settlement agreement between the assignees and the insureds was fraudulent. Carlson v. Century Surety Co., Nos. 12-15964, 12-16153, 2015 U.S. App. LEXIS 5180 (9th Cir. Mar. 31, 2015).

By Mark Hunter The Sales Hunter


Here are 5 things you can do write now to improve your prospecting emails:


1. Think newspaper headline, not a letter.

Big mistake salespeople make is they use the first paragraph to introduce themselves and their company to the prospect.

This is a huge waste! Any prospect viewing this will delete it in a split second.


Supreme Court Holds that Employers Cannot Deny Pregnant Workers the Same Accommodations it Provides to Other Workers who are Injured on the Job

By Thomas Paschos, Esq. of Thomas Paschos & Associates, P.C.


In Young v. UPS, Inc., 135 S. Ct. 1338 (March 25, 2015), plaintiff, Peggy Young, was a part-time driver for UPS. When she became pregnant she was told by her doctor not to lift heavy packages. UPS refused to reassign her or let co-workers help her. Young alleged that UPS's failure to accommodate her pregnancy was illegal. UPS has a policy of accommodating other people who temporarily couldn't do heavy lifting, and plaintiff alleged that refusing to do so for her was discrimination. According to UPS, those other assignments were only in very specific cases such as an on-the-job injury. Usually, they don't accommodate employees who can't do their jobs for physical reasons.


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


Book Two - 

E&O Exposures in the Sales Process

Book Three - 

E & O Exposures By Line of Business

Demotech, Inc.

Since 1985, Demotech, Inc. has served the insurance industry by assigning accurate, reliable and proven Financial Stability RatingsŪ (FSRs) for Property & Casualty insurers and Title underwriters. FSRs are a leading indicator of financial stability, providing an objective baseline of the future solvency of an insurer.  You can search the most current FSRs here.


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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"Bringing the Best Together"
Angelo J Gioia


"Great minds discuss ideas. Average minds discuss events. Small minds discuss people." - Eleanor Roosevelt

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