E&O Prevention
Strategies for the Professional Agent
December 10, 2015

Agents of America


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AOA News, Views, Tips & More
By Mark D. Harris, CIC, of Quadrant Insurance Managers
Insurance company insolvency has been a thorny issue spanning many decades.  The only consistency is that there is no one solution and that an agent can be held liable for placing coverage with a company that becomes insolvent. Agents E&O policies have been challenged with how to adequately address insolvency exposure, but this remains an ongoing concern with no single solution.

By Eric G. Cheng, Esq. of Wilson Elser

The recent New York City outbreak of Legionnaires' disease (named for a 1976 outbreak of a type of pneumonia at an American Legion convention) has raised awareness of the illness. It has also renewed the courts' interest in interpreting the Mold Exclusion. In the recent decision Acuity v. Reed & Associates, No. 15-2149 (W.D. Tenn. August 19, 2015), the court held the exception to the exclusion, i.e., fungi or bacteria contained in a good or product intended for bodily consumption, applied to provide coverage.  

By Robert Tugander, Esq. of Rivkin Radler LLP

An appellate court in Connecticut, affirming a trial court's decision, has ruled that a homeowner's insurance policy did not cover claims that the homeowner had misrepresented his home's condition to a couple that purchased his home, concluding that the claim was for purely economic loss and not property damage. 

By Marc J. Zimetof Jampol Zimet LLP 

In August, after several high profile breaches of customer personal data, the federal Third Circuit Court of Appeal ruled that the Federal Trade Commission has the power to police cybersecurity failures and sue companies that fail to adequately safeguard customer data.

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

The Cybersecurity Information Sharing Act or CISA passed the Senate this week by vote of 74-21, but not without controversy. CISA would not establish a generally applicable federal standard for safeguarding personal information, nor would it enact a federal breach notification requirement. Rather, if signed into law, CISA would among other things create a framework for governmental entities and private entities to share cyber threat information for cybersecurity purposes in order to help protect against the massive data breaches that have hit the federal government and major U.S. companies. A companion bill has been passed in the House and, if successfully reconciled, the law will be sent to President Obama, who indicated support for the bill.

By Diana Shafter Gliedman, Esq. of Anderson Kill P.C.

Attorneys understand that every job and client brings with it the potential for great reward . . . and the possibility of a lawsuit. As such, law firms and solo practitioners purchase professional liability insurance coverage, also known as errors and omissions or legal malpractice insurance, to protect themselves from claims of negligence or malpractice. 

By G. Jay Habas, Esq. of Marshall Dennehey Warner Coleman & Goggin, P.C.

Many employers use staffing agencies to fill their needs for temporary workers. The advantages to the employer include that it can meet fluctuating employee needs without having to hire workers on its own; the temporary agency does the job of recruiting, selecting, training and, in most cases, paying the temporary worker; and the temporary agency could be viewed as the actual employer of the temporary workers, thus insulating the employer from liability under various employment laws.

By Aaron J. Aisen, Esq. and Fallyn B. Cavalieri, Esq. of Goldberg Segalla

The battle over the Affordable Care Act (ACA) is heating up again with two recent high-profile decisions. In the first case, the U.S. House of Representatives as an institution sued the executive branch over actions taken by the executive during the implementation of the ACA. This case is unique because it addresses the broader question of whether the legislative branch has the authority to sue the executive branch over how the executive implements statutes.

By Susan T. Ye, Esq. of Hinshaw & Culbertson LLP

Apex Directional Drilling, LLC v. SHN Consulting Engineers & Geologists, Inc., No. 15-cv-02501, 2015 WL 4749004 (N.D. Cal. Aug. 11, 2015)

Summary of the Case
This litigation arises from problems with a municipal sewage construction project. In April 2013, the City of Eureka, California publicly solicited bids from contractors for installing a new wastewater pipeline by using a technique called horizontal directional drilling ("HDD").

By Samuel M. Goffinet, Esq. of Tressler LLP

In Atlantic Casualty Insurance Company v. Johnny's Quality Exteriors, Inc., 2015 WL 5476459 (E.D.Wa. 2015), Atlantic Casualty Insurance Company (Atlantic Casualty) sought a declaration that it had no duty to defend or indemnify Johnny's Quality Exteriors, Inc. (Johnny's) for claims made against Johnny's in a lawsuit pending in Washington state court. 

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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