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Big "I" E&O Guardian

Big “I” Professional Liability

August 2022

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The Terrible Twenties: A look back at the E&O lessons to be learned from 2022

If there’s one thing that 18 years in the errors & omissions business has made clear, it’s that—as much as they hate to be reminded of their own mistakes—insurance professionals love to hear about the miscues of their competitors. The more painful the better! And who can blame them? You get all the benefits of the lesson learned with none of the pain.

Hit the Ground Running: Identify your next all-star hire and give them a head start  

The proportion of the nation’s 65-and-older population has grown by over a third since 2010 and by 3.2% between 2018 and 2019, according to the U.S. Census Bureau. This is being felt within the insurance industry’s workforce. The average age of an independent insurance agency principal is 54 years old, according to the 2022 Agency Universe Study, which also found that 17% of all independent agency principals are age 66 or older.

Customer’s Choice: An E&O primer on D&O risks 

With great power comes great responsibility. And with great responsibility comes great risk to personal assets. Directors & officers insurance is primarily intended to protect the personal assets of a company or nonprofit organization’s directors and officers should they be sued by vendors, suppliers, customers, employees, investors, competitors or government regulators for alleged wrongful acts made while managing the organization.

Owning Mistakes: Selling your agency or buying a new book of business the right way 

Over the last few years, insurance agencies have been acquired at an accelerating rate. Whether you are thinking about expanding your agency by purchasing an existing book of business from another agency or retiring and selling your insurance agency, you can become the target of an errors & omissions claim. To avoid or minimize the risk, there are several considerations to keep in mind that can minimize the risk.

“All the World’s a Stage…”

This may seem like an unusual way to start a discussion about insurance agents errors and omissions risk management, so please bear with me. The more lengthy monologue, delivered the by character Jacques in William Shakespeare’s play “As You Like It”, says: 

What Inflation Means for Your Insurance & Business

Swiss Re Corporate Solutions is closely monitoring two types of inflation that may be relevant to your business and E&O insurance: consumer price index inflation and social inflation. In these continually uncertain times, we hope this will help you understand what we are looking at and not only how it affects E&O insurance, but how it affects your clients.

Comp Conundrum: Will workers compensation premiums and claims drop under new modes of working?

“Once the toothpaste is out of the tube, it’s tough to get back in,” H.R. Haldeman, White House chief of staff under the Nixon Administration, famously observed. Half a century later, employers are finding the truth in the expression as they struggle to get their employees—many of whom were sent home to telework during the COVID-19 pandemic—to return to the office. In large numbers, those employees are saying, “No, thank you.”

Coronavirus and the Auto Exposure

Over the last several days the VU has fielded several auto insurance related questions. These questions cannot be classed simply as personal auto or business auto questions because the most common question involves both polices.

Coronavirus and the CGL

Because of the fears (warranted or not) stemming from the Coronavirus, questions and answers regarding insurance policy response to the virus appear almost daily in various publications. To date, two articles have been published by the VU in relation to insurance and the virus.

Coronavirus (COVID-19): Does Business Income Respond?

Over the past two weeks, the VU has received countless questions concerning COVID-19 (the coronavirus) and the business income policy. As authorities require businesses to limit activities or shut down completely, the fear and reality of the loss of income looms large.

Coronavirus and Workers’ Compensation

A pandemic is defined as, an outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population.

COVID-19 and Commercial Property Vacancy Concerns

As of this writing 38 states and countless cities and counties have enacted some form of stay-at-home order amid the pandemic panic arising from COVID-19. If the operation is not considered an “essential” business, its doors are shut – for now. How long such orders will or even can stay in place is anyone’s guess.

Does the PAP Cover Food Delivery?

Pizza delivery is not new. Its history goes further back than you think. In fact, the first recoded request for pizza delivery occurred in 1889 – and it was by royalty. While in Naples, King Umberto I of Italy and Queen Margherita of Savoy made the first call. History doesn’t record if it was delivered in 30 minutes or less.

What’s In a Name?

“That which we call a rose by any other name would smell as sweet.”
~Romeo and Juliet by William Shakespeare

Reply in Haste, Repent at Leisure: Responding to Regulatory Complaints 

While it is impossible to address every possible situation that might occur in this discussion, let’s look at a very simple example: A customer of the agency has a claim, the carrier refuses (validly or not) to pay the claim, the customer becomes upset and ultimately files a complaint against the agent or agency with the Department of Insurance.

From the Email Bag: Employee Benefit Plans 

Due to the dramatic changes in health insurance coverage for small businesses from enactment of the Affordable Care Act (ACA), employers are looking for alternatives to traditional health insurance programs in an effort to save money. Employers have consistently tried to provide for their employees and there are different methods of providing employee benefit plans.

Cyber and Data Privacy Risk Management 2017 

They say the more things change, the more they stay the same. The Ponemon Institute released it’s most recent reviews of the per capita costs associated with lost or stolen records by industry:

Compliance Is Not a Dirty Word

“Compliance,” like the term “audit,” can strike fear into our hearts. “Compliance” is a term that for many people has a negative connotation. Merriam-Webster defines “compliance” as:

The Best Defense is a Good Offense

You’ve heard that phrase over and over, and while it may be a cliché, it doesn’t make it any less true. And it can be especially true when you are trying to do everything you can to prevent an E&O claim.

Follow-up to Claim Denials Directives from Carriers

On March 23, 2020, we sent notification that some carriers have asked agents to deny claims on the insurance company’s behalf. We recommended that agents not deny claims for several reasons enumerated within that notice.

You Too: Why Employment Practices Liability Insurance Makes Sense for Every Business

Buying or selling an insurance agency or its book of business is, to say the least, a major decision. There are a host of factors for both the buyer and the seller to consider: the value of the business, a price point, personnel questions, property-related aspects,
time commitments, and many other issues to investigate, assess, negotiate and eventually agree on.

Risk Transfer: E&O Issues When Buying or Selling an Insurance Agency

Buying or selling an insurance agency or its book of business is, to say the least, a major decision. There are a host of factors for both the buyer and the seller to consider: the value of the business, a price point, personnel questions, property-related aspects,
time commitments, and many other issues to investigate, assess, negotiate and eventually agree on.

To Cancel or Not to Cancel, That Is the Question

Just as you are probably receiving a lot of questions from your customers about how their insurance will respond to the events surrounding the Coronavirus/COVID 19, we are also receiving a lot of questions from agents and brokers asking what they should do regarding those questions. How do you respond when someone asks you whether or not there is coverage under their policies?

One Word: Plastics – 4 Ways to Grow Your Business, Not Potential E&O Claims

Every insurance agent or agency feels some degree of pressure to grow their business. In fact, that pressure is felt in the broader world. We hear comments all the time like, “In this league, if you’re not improving, you’re getting worse,” from the pundit on ESPN. Or, “What’s your five-year plan to grow your business?” from the speaker at the seminar. And, of course, in the movie “The Graduate,” the character giving Dustin Hoffman advice: “Plastics!”

Be Prepared: Planning for the Future With Catastrophic Insurance

Catastrophic events like flooding, severe storms and wildfires are becoming increasingly commonplace. Since 1980, there have been 308 weather and climate disasters in which damages were $1 billion or more, at a total cost of $2.085 trillion, according to the National Oceanic and Atmospheric Administration (NOAA). In 2021 alone, there were 18 such events.

Love Letters: Break Cybercriminals’ Hearts by Establishing Robust Cybersecurity Protocols and Maintaining Appropriate Cyber Insurance

It’s not the kind of note you want to receive from a secret admirer: “Dear Business, we have decrypted all your data and blocked access to your computer systems. Unless you pay us millions of dollars, you will remain locked out and we will start posting your and your clients’ sensitive data online. Can’t wait to hear from you! The 24-hour clock has started! Love, Cybercriminal.”

All Upside:  Why Failing to Upsell Coverages Creates a Lose-Lose Scenario

It’s true, we spend a lot of webinar time and magazine ink repeating what we hope is a familiar refrain: Do not carelessly take on a higher duty to your customers than exists under your jurisdiction, most notably via website promises and marketing puffery. Why? A court may conclude, in one fell swoop, that you’ve both taken on a higher duty to your customer and failed to carry that burden to a successful conclusion.

Buckle Up:  The Right EPLI Coverage Is A Lot Like Wearing a Seatbelt

Employment practices liability insurance is a coverage that most small businesses think they don’t need. Like the driver who realizes they should have buckled their seatbelt after an accident, the first clue that they’re mistaken often comes in the form of an Equal Employment Opportunity Commission (EEOC) complaint. Worse yet, the next thing a business will probably learn when they show up on their agent’s doorstep is that it is too late to get EPLI coverage to cover a lawsuit that started as an EEOC matter.

Pass the Parcel:  The Perils of Handling Brokered Business 

As sure as Shark Week arrives each summer, private companies and their directors and officers get sued. Having the right liability insurance in place could be like holding a running chainsaw when a shark falls on you from the sky during a tornado, allowing you to escape the belly of the beast safely.

What Scares You?

Around my favorite time of year, Halloween, there are a lot of television shows and internet articles about scary things. It made me think that as an insurance agent errors and omissions aficionado, what is it that scares me and, in turn, what should scare YOU?

“Where’s the Fire?” Avoiding E&O Claims from Fire Losses

Every fire loss claim covered by an insurance policy begins and sometimes ends with the agent who sold the policy. However, avoiding an E&O claim related to a fire loss begins and always ends with you understanding the process. Remember, the fire loss doesn’t start with the fire, it starts with the application.

If I’d Only Sent Them the Policy…

“If I’d only sent them the policy, then I wouldn’t be in this mess.” And if I had a nickel for every time I heard that from an agent when there was a claim and a carrier was denying coverage for an uncovered underlying claim, I’d be a rich man.

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