Dec Page Quarterly - Fall 2016 - (Page 22)

Feature ERRORS & OMISSIONS: By Ellen McCarthy T Is Your Agency Making Empty Promises on Its Website? echnology has done wonders to increase an insurance agency's productivity and sales goals. But the statements an agency makes on its website and marketing materials can lead to serious, unintended consequences from an E&O perspective. Consider John Client, who owns several older apartment buildings. He comes to your agency seeking property coverage for the buildings. You meet with John, visit the buildings and procure a policy based on the limits John specifically and unequivocally requests. Several months later, one of the buildings burns down due to faulty wiring. The carrier pays the full policy limits to John. Dissatisfied with his recovery, John then sues the agency, asserting that the amount of coverage on the building was inadequate and that the agency should have recommended higher limits. You meet with your appointed defense counsel and discuss the standard of care of insurance agents in your state. Your state has an "order taker" standard, meaning that an agent has an obligation to procure requested coverage without any duty to advise as to appropriate limits. Your defense counsel is relatively confident that you met the standard of care. But then, John amends the lawsuit. In the new complaint, John cites the agency's website language, which advertises that it procures "great insurance protection," that its "agents will help you choose the amount of coverage that best fits your individual situation," "works hard to ensure that you are fully covered for all those risks that most apply to you" and "produces the most complete plan to safeguard your business." Now, counsel informs you that the allegations based on your webpage in the amended complaint may be sufficient to establish that a "special relationship" existed between you and John. In the event of a special relationship between agent and customer in your state, the agent may have an affirmative duty to advise about types and limits of available coverage. Your website language makes you susceptible to an adverse finding. Subsequently, your E&O carrier enters into a negotiated settlement of John's claim with your consent. 22 IndEpEndEnt InSUrancE agEntS OF gEOrgIa While hypothetical, the above situation is not at all unusual. Thoroughly review your website and other marketing materials, asking: * Could any representations create unrealistic customer expectations? * Does the content make promises the agency may not be able to fulfill? * Does the agency website inadvertently create a heightened standard of care? * Would you want your website statements blown up on a poster board as a trial exhibit? Statements on your agency's website are not just advertising slogans. Don't make promises unless you can deliver. Ellen McCarthy is a vice president and claims expert at Swiss Re Corporate Solutions and teleworks out of the Overland Park, Kansas office. ● Want More Info? Contact: Molly Seides, E&O and Insurance Programs Manager Independent Insurance Agents of Georgia 4555 Mansell Road, Suite 300 Alpharetta, GA 30022 E: | P: 770-458-0093, ext. 106

Table of Contents for the Digital Edition of Dec Page Quarterly - Fall 2016

Welcome to IIAG’s New Leaders 2016-2017
Message From the CEO
New Members
Partner Spotlight: Southern Insurance Underwriters, Inc.
Agency Spotlight: Snellings and Walters
The New Overtime Rule: Changes Made and How Agencies Can Comply With Them
IIAG Principals Academy
Georgia’s Assigned Risk Plan
Errors & Omissions: Is Your Agency Making Empty Promises on Its Website?
Creating a Lead- Friendly Website
Fall Conference Preview
Events Calendar
Education Calendar
Partners in Progress
Index of Advertisers/

Dec Page Quarterly - Fall 2016