E&O Prevention
Strategies for the Professional Agent
October 8, 2015

Agents of America


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AOA News, Views, Tips & More
Wearables, Wellness and Privacy
By Joseph J. Lazzarotti, Esq. of Jackson Lewis P. C.

Bloomberg BNA (subscription) recently reported that this fall the Center for Democracy & Technology (CDT) will be issuing a report on Fitbit Inc.'s privacy practices. Avid runners, walkers or those up on the latest gadgets likely know about Fitbit, and its line of wearable fitness devices. Others may know about Fitbit due to the need to measure progress in their employers' wellness programs, or even whether they qualify for an incentive. When participating in those programs, employees frequently raise questions about the privacy and security of data collected under such programs, a compliance issue for employers. Earlier this month, FitBit reported that its wellness platform is HIPAA compliant.

By Lynn A. Lehnert, Esq. of Goldberg Segalla

The recent case of Auto-Owners Ins. Co. v. Yahia Motan & Motan Yahia reminds all practitioners of the importance of accurate responses in insurance applications. Auto-Owners addressed the issue of misrepresentations made in commercial insurance policies. 2015 Mich. App. LEXIS 1659 (MI App. 1st Dist. 2015). Decided on September 8, 2015, the Michigan Appellate Court found in favor of the insurer, finding that it relied on the insured's misrepresentations made in the application to justify cancellation and rescission.

By J. Stephen Berry, Esq., Austin BersingerAustin Bersinger, Esq. & Keith Moskowitz, Esq. of Dentons

The Southern District of Florida recently issued an opinion that addresses some rarely discussed nuances of insurance choice of law disputes. Sun Capital Partners, Inc. v. Twin City Fire Ins. Co., No. 12-CV-81397, 2015 WL 4648617 (August 5, 2015).

In Sun Capital, the insured renewed a primary Professional Liability policy from Houston Casualty Company, and a follow-form excess policy from Twin City Fire Insurance Company. To renew the excess policy, the insured's broker emailed Twin City's underwriter: "please consider this email as the formal order to bind coverage for Sun Capital's renewal GPL coverage." Id. at *4. Twin City's underwriter responded, from his office in New York, with an email stating: "we are pleased to provide you with the following Binder For Insurance" and attaching a binder. Id. 

By Anne McAuley of McAuley Freelance Writing

When was the last time you reviewed the online marketing for your insurance business? If it has been more than a few months, it's time to take a look at the content (or lack of content) you're putting on your website, blog, and social media. You could be missing opportunities to connect with your customers and prospects.

Why does content matter? Content is king when it comes to online marketing. A content strategy rich in creating and sharing new content and repurposing the old on a consistent schedule will reach a wide audience with minimal effort on the part of you and your staff. 

By Alan R. Jampol, Esq. of at Jampol Zimet, LLP
Insurers, insureds, and even their attorneys frequently incorrectly assume that insurance agents and brokers owe fiduciary duties to their insureds. While the law is not completely clear regarding the applicability of agency principles and their fiduciary duties in this area, legal precedent can offer some guidance on the issue.

By Elizabeth Musser, Esq. of Tressler LLP
Genesis Insurance Company had no duty to provide coverage because the insured's "notice of circumstances" was insufficient and coverage was triggered under a later policy year. Accordingly, Genesis could recover its $5 million settlement payment from the subsequent insurer under a theory of equitable subrogation. Genesis Ins. Co. v. Magma Design Automation, Inc., No. 5:06-CV-05526-EJD, 2015 WL 4128986 (N.D. Cal. July 8, 2015).

By Ryan J. Kohler, Esq., Michael B. McDonald, Esq. of Collins Collins Muir & Stewart LLP
There comes a time when almost every employer is faced with accommodating an employee's needs after an injury or illness. In these circumstances, the law requires employers to engage in an "interactive process" to identify and implement reasonable accommodations for a known disability unless doing so would produce "undue hardship" to the employer's business operations. Although the phrase "reasonable accommodation" seems intuitive, the actual implications are often more onerous than an employer might initially assume. Under California law, a "reasonable accommodation" is a modification or adjustment to the work environment that enables the employee to perform the "essential functions of the job he or she holds or desires." This standard is both broad and vague, and can cause headaches for employers trying to meet their legal obligations. 

By Robert D. Chesler, Esq. of Anderson Kill P.C.

FTC v. Wyndham
Every company entrusted with any personal data at all must read the decision in Federal Trade Commission v. Wyndham Worldwide Corp., No. 14-3514 (3rd Cir. Aug. 24, 2015). The court ruled in favor of the FTC and, among other findings, held that a company's publicly published privacy policy must match its actual practices. If the actual practices are inferior to the privacy policy, the company can be subject to an FTC investigation and enforcement action, and possibly to a class action. 

By Amy L. Baker, Esq, Genese K. Dopson, Esq. Rosario M. Vignali, Esq. of Wilson Elser et al

Advances in 3D printing (3DP) technology have paved the way for pharmaceutical companies to print prescription drugs. Aprecia Pharmaceuticals recently announced that the FDA has granted it approval to manufacture SpritamŪ (levetiracetam), an antiepileptic medication, using 3DP technology. Aprecia claims that this is the first time the FDA has approved manufacture of a 3DP drug. Aprecia is scheduled to begin production of Spritam in the first quarter of 2016.

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

In Jaworski v. Ernst & Young US LLP, ___ N.J. Super. ___, 2015 N.J. Super. LEXIS 120 (July 23, 2015), three Ernst & Young employees sued for age discrimination under the New Jersey Law Against Discrimination. Ernst & Young filed a motion to dismiss and compel arbitration, which was granted by the trial court. The employees appealed.

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. 

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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