Dec Page Quarterly - Fall 2016 - (Page 22)
By Ellen McCarthy
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
Independent Insurance Agents of Georgia
4555 Mansell Road, Suite 300
Alpharetta, GA 30022
E: firstname.lastname@example.org | 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
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
Partners in Progress
Index of Advertisers/ advertiser.com
Dec Page Quarterly - Fall 2016