E&O Prevention
  
Strategies for the Professional Agent
August 6, 2015


Agents of America






 


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AOA News, Views, Tips & More
Avoid Agent E&O Claim Denial

By Brent Winans of Clear Advantage Risk Management

 

Insurance agents do not want their own errors and omissions (E&O) claims denied or their policies canceled because of the way they have handled E&O incidents. To avoid that situation, agents should overcome their fear of reporting E&O claims and potential claims and be careful not to violate the other requirements in their own policies.

 

Corporate Officers and Directors Denied Coverage for Allegedly Wrongful Acts Committed When Acting as Trustees

By Robert Tugander, Esq. of Rivkin Radler LLP

 

The U.S. Court of Appeals for the Eleventh Circuit, affirming a decision by the U.S. District Court for the Northern District of Georgia, has ruled that an exclusion in a director's and officer's ("D&O") insurance policy barred coverage for an underlying complaint that alleged that wrongful acts of officers and directors of a family-owned corporation "arose out of" their allegedly wrongful acts as trustees of a family trust. 

 

Jeep Hack Drives Cyber, Crisis, Liability and Supply Chain Coverage Issues

By Joseph F. Bermudez, Esq. of Wilson Elser, et al

 

A recall notice to fix critical control software on 1.4 million vehicles should raise concerns for companies, brokers and insurers across several business lines. The vulnerability of vital control systems to a remote hacking threat is a significant exposure that raises concerns for many industries and supply chains. As we learned late last year with a German steel mill cyber event, the threat of physical harm caused by a control system hack is no longer theoretical. Governments, companies, brokers and insurers must recognize and understand the risks, implement safety measures and consider loss contingencies. Emerging coverages for cyber exposures, automotive or components product recalls and supply chain risks can assist companies with surviving crisis cyber events.

 

Google "Adwords" Advertisements Trademark Infringement, Not Slogan Infringement

By Michael P. Kandler, Esq. of Goldberg Segalla

 

In Auto Mobility Sales, Inc. v. Praetorian Insurance Co., 2015 U.S. Dist. LEXIS 84777 (S.D. Fla. June 30, 2015), the U.S. District Court for the Southern District of Florida held that an insurer had no duty to defend or indemnify its insured against allegations of trademark infringement resulting from the insured's use of certain language in a Google 'Adwords' Advertisement.

 

Auto Mobility Sales, Inc. (AMS) sells and rents handicap-enabled vehicles. AMS was insured by a general liability insurance policy issued by Praetorian Insurance Company. The policy covered, in pertinent part, "infringement, in your advertisement, of copyright, trade dress, or slogan."





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

The growing risk of cyber attacks has prompted the National Association of Insurance Commissioners ("NAIC") to adopt new "Cybersecurity Guiding Principles." The principles are intended to protect consumers by providing the insurance industry with guidelines for protecting client information and identifying risks to data. The update comes after recent cyber attacks on Anthem Blue Cross Blue Shield and Premera Blue Cross that resulted in the dissemination of private data. According to Premera Blue Cross, a recent cyber attack resulted in the breach of up to 11 million customer records, which included credit card and social security numbers, and even some medical records. Anthem's security breach in February of this year involved approximately 80 million customers.

Some Clarity to What is Sufficient Consideration for Non-Competes in Illinois

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

 

Since the much-discussed Fifield case from the Illinois appellate court two years ago, all that could be said with confidence was that, unless someone was employed for at least two years after signing a restrictive covenant agreement, its enforceability was highly questionable. Practitioners in Illinois have been recommending that employers provide consideration in addition to employment, such as a "sign on" bonus tied to the restrictions or any other consideration that would not be given but for the individual's agreement to the restrictions. In the next breath, practitioners have been telling their clients that even the additional consideration might not be enough to bind employees employed for less than two years. Uncertainty is everyone's enemy in this area, and there has been great uncertainty for the past two years. But that uncertainty recently has been reduced by the same appellate court's ruling in McInnis v. OAG Motorcycle Ventures, Inc. decided June 25, 2015 by the Illinois Appellate Court for the First District, albeit by a 3-judge panel different from the panel that decided Fifield.

 

The Insured Gets What the Insured Asked for...When It Is Listed in the Policy

By Katherine E. Tammaro, Esq. of Tressler LLP

 

In Cincinnati Ins. Co. v. Wilkerson, 2015 U.S. App. LEXIS 10804 (6th Cir. Ky. 2015), the U.S. Court of Appeals for the Sixth Circuit determined that an insurance policy endorsement specifically stated that it provided general liability coverage for the whole property in question, not only for a specific lot of that property, that there was no evidence of a mutual mistake to allow for reformation of the policy, and that the case should be remanded for a determination of whether notice was provided late to the insurer and if the insurer was prejudiced as required by Kentucky law.

 

Contesting Damages In the Face Of Liability

By Eric I. Yun, Esq. of Marshall Dennehey Warner Coleman & Goggin, P.C.

 

Key Points:

Vigorous contest of liability can significantly reduce damages awarded.    

 

Damages may also be limited by establishing the subjective nature of a plaintiff's injuries.

 

Although the contest of liability is often (for obvious reasons) thought of as the main event in litigation, damages can in certain situations take center stage, as two recent decisions from the Pennsylvania Superior Court demonstrate. In one case-which involved Marshall Dennehey successfully arguing in the trial and appellate phases-it was shown that, even if liability is not decisively eliminated in the eyes of the jury, a vigorous contest of liability can significantly reduce the damages awarded in an amount beyond what would otherwise be called for by comparative fault. 

 




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

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Book Two - 

E&O Exposures in the Sales Process


Book Three - 

E & O Exposures By Line of Business


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Is Your Insurance License Renewing Soon?
Is your agency licensed in multiple states? Does your agency maintain nonresident licenses? Do you know when renewals are due? Did you know a resident change requires address changes in the states in which an individual holds licenses? If you need assistance with any of your licensing needs go to the experts Supportive Insurance Services.

Excess & Surplus Lines Laws
We are happy to provide the 2015 Edition of Locke Lord LLP's Excess and Surplus Lines Law Manual.


This edition reflects all of the pertinent changes in the surplus lines laws and regulations of the 50 states and U.S. territories during the past year. We sincerely trust you will find this manual to be a valuable desk reference and if you have any questions regarding the contents, please contact John P. Dearie, Jr., Esq. Editor and Partner at Locke Lord LLP at jack.dearie@lockelord.com or (212) 912-2737
 

 

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