E&O Prevention
Strategies for the Professional Agent
June 11, 2015

Agents of America


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AOA News, Views, Tips & More

Make Sure You & Your Clients Are On The Same Page

By Angelo J. Gioia


A constant challenge every insurance agent faces is when one of their clients has a loss and finds out they have no coverage and potentially that they may have been responsible? Every day agents and their staff are engaged in conversations and discussions with their clients regarding their current policies, potential changes to those policies and a multiple of what ifs?  

The Premium Financing Red Flag - Case Studies & What to Avoid

By Rob Usinger, Esq. & Iram P. Valentin, Esq. 


Premium financing involves the lending of funds to procure life insurance by individuals (or companies). The practice of premium finance is not new.


For example, premium financing and premium financing companies have been regulated in the State of New York as far back as 1960 and in Florida as early as 1963. Although not a new practice, the use of premium financing appears, at least anecdotally, to be on the rise.


Is a Threat to Reduce Pay Enough to Establish Actionable Employment Retaliation?

By Dove A. E. Burns, Esq. and Caroline J. Berdzik, Esq. of Goldberg Segalla LLP


The question of whether a threat to reduce pay constitutes an adverse employment action is before the Fifth Circuit. Last week, a trucking school asked the Fifth Circuit to uphold a trial court decision dismissing the case on summary judgment, in part due to the fact that while the plaintiff alleged that she was threatened with a pay cut, she quit prior to receiving a cut in pay. A reversal of the trial court decision would lead to a significant expansion of the scope of actionable retaliation in the Fifth Circuit and likely beyond.


NYC Enacts Law Banning Credit Screenings for Most Job Applicants

By Bennett Pine, Esq. of Anderson Kill P.C.    


On May 6, 2015, New York City Mayor Bill de Blasio signed into law the Stop Credit Discrimination in Employment Act that would prevent employers from using credit checks, bankruptcies and liens to disqualify most applicants from employment. The bill was passed by the New York City Council by a vote of 473 in April. The law amends the city's Human Rights Law to add protections prohibiting discrimination on the basis of an individual's credit history by limiting most employer inquiries into, or basing employment decisions upon, the credit history of a current or prospective employee.


Innocent Insured Cannot Avoid Rescission of Malpractice Policy Based on Partner's Misrepresentation on Policy Renewal Form

By Lindsey Dean, Esq. of Tressler LLP


Because a law firm partner made a material misrepresentation on a malpractice insurance policy renewal form for the law firm, the "innocent insured doctrine" did not protect the law firm's other partner from rescission of the malpractice policy. Ill. State Bar Ass'n Mut. Ins. Co. v. Law Offices of Tuzzolino & Terpinas, 2015 IL 117096.

No Employer Liability For Failure to Prevent Where Underlying Claim Not Established

By Alan R. Jampol, Esq. of Jampol Zimet LLP


There can be no employer liability for failing to take reasonable steps necessary to prevent sexual harassment or sex discrimination where the employer is not found liable for sexual harassment or sex discrimination. This is the recent ruling of the California Court of Appeal in Dickson v. Burke Williams, Inc. (2015) 234 Cal.App.4th 1307.

When the Smoke Clears, Can Marijuana Be Considered Reasonable and Necessary Medical Treatment? Lessons from New Mexico 

By Jammie N. Jackson, Esq. of Marshall Dennehey Warner Coleman & Goggin, P.C 

Key Points: * Medical marijuana may be deemed reasonable and necessary medical treatment. * Find out if a doctor is licensed to prescribe medical marijuana before authorizing treatment.


By Joseph J. Lazzarotti, Esq. of Jackson Lewis P.C.


Over the past few years, states around the country have enacted laws limiting an employer's ability to access the personal social media accounts of applicants and employees. Earlier this year, Montana's Governor Steve Bullock signed HB 342 into law. Before that, Virginia enacted a similar measure. On May 19, Connecticut's Governor added the Nutmeg state to the list, signing S.B. 426 into law, becoming effective October 1, 2015. Taking the protection of employee social media accounts a step further, a measure in Oregon, S.B. 185 A, would amend its existing law to prohibit employers from requiring employees or applicants (i) to establish or maintain personal social media accounts or (ii) to authorize the employer to advertise on their personal social media accounts. That bill, unanimously passed by the State's legislature, awaits consideration by the Governor.


Connecticut Supreme Court Affirms No Coverage for Lost Tapes Absent Publication of Data

By Joseph F. Bermudez, Esq. and Suzanne M. Meintzer, Esq. of Wilson Elser et al


In Recall Total Information Mgmt., Inc. v. Federal Ins. Co., SC19201 (Conn. May 18, 2015), the Connecticut Supreme Court held that where there was no factual support that anyone ever actually accessed private information stored on lost data tapes, the policyholder's assignee could not establish publication of such information and, therefore, also could not demonstrate "personal injury" necessary to trigger such coverage under a commercial general liability (CGL) and umbrella policy.  The court also found that settlement negotiations do not qualify as a "suit" to trigger an insurer's duty to defend.

Professional Engineers May Testify as Expert Witnesses Against Licensed Architect

By Donald A. O'Brien, Esq. of Hinshaw & Culbertson LLP


Garden Howe Urban Renewal Associates LLC v. HACBM Architects, Engineers, Planners LLC, N.J. Super. Ct. App. Div., Docket No. A-1144-13T2 (Feb. 26, 2015)


Plaintiff owner accepted a proposal from defendant architectural firm to design an addition and various alterations to an existing four-story building and to provide some construction observation services. The parties entered into a standard AIA form agreement between owner and architect, which provided that the architect would provide its services in a manner consistent with professional skill and care. The owner subsequently sued the architectural firm for professional malpractice alleging, among other things, failure to provide adequate plans to construct the project.




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

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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


"You miss 100% of the shots you never take." - - Wayne Gretzky 

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