Since the publication of the April issue of The E&O Report, a number of agents and brokers have contacted us seeking more information about some of the topics we will cover during the seminars. Accordingly, we will provide additional details in this issue.
The first topic will be a review of the New York law that affects property/casualty and life and health insurance agents and brokers. We will discuss several recent New York court cases and an assortment of New York Department of Financial Services General Counsel Opinions and Circular Letters, which should be familiar to insurance producers. We will also address insurance laws and regulations that affect New York agents and brokers in conducting their business. Among other issues, we will review the mandates of Insurance Law Section 2119 and discuss when and how fees can be collected by brokers in accordance with the law. We will also spend time reviewing the elements of the state’s producer compensation disclosure regulation (Regulation 194) and how to comply.
The next topic involves how an insurance agency or brokerage should handle claims and lawsuits filed by customer insureds. In connection with this topic, we will review the following: how to transmit claims and lawsuits to insurance companies; how to proceed when an insured wants assurance that a claim will be covered; what to do when an insured instructs the agency or brokerage not to report a claim; identifying insurance companies that consistently take improper coverage positions; and the importance of the agency or brokerage staying involved in the claims process. The third topic will explore how technology can help protect agencies and brokerages against E&O claims and lawsuits. This discussion will cover the essentials of documentation, various features contained within the agency management system, best practices for the use of email, telefaxes and voice mail, how to image and scan documents and the best way from an E&O perspective for an agency or brokerage to use cell phones and other electronic devices in conducting its business.
The fourth topic will feature a discussion of the duty of care for insurance agents and brokers in New York and various other states. We will review the definition of the duty of care and the key New York court cases that define the duties and obligations of insurance producers. In addition to New York law, we will also discuss the duties and obligations for New York agents and brokers in a number of other states where they frequently conduct business.
The next topic will cover the top four types of E&O claims and lawsuits we have seen asserted against New York agents and brokers during the past year. We will start the discussion with the document that continues to be the biggest source of E&O claims and lawsuits against producers – the certificate of insurance. We will review the types of claims and lawsuits that arise from certificates, as well as various loss control practices that can be used to help protect against certificate-related E&O claims or lawsuits. Next, we will trace how claims can arise based upon allegations that the agency or brokerage failed to procure coverage, the governing law in this area and loss control practices that the agency or brokerage should follow to help prevent such a claim. We will also cover how agencies and brokerages should proceed when they receive a subpoena or verbal request for documents or information from a customer, attorney or an insurance company. Finally, we will discuss the various types of investigations that insurance agencies and brokerages may become involved in with the state Department of Financial Services and other governmental bodies and how to proceed if involved in an investigation.
For the final topic, we will cover issues involving social networking and the law regarding social media activity. Specifically, we will review E&O issues that arise in connection with social media, privacy issues, advertising concerns, copyright issues and considerations relating to the use of social media by potential employees and existing employees of an agency or brokerage.
As with all of our seminars, we will use real-life examples of claims and lawsuits handled by our law firm in order to help illustrate the topics discussed. We will also discuss practices and procedures that agencies and brokerages can follow in order to help minimize E&O claims and lawsuit, provide better customer service and possibly sell more insurance.
We encourage everyone to register and attend one of the upcoming E&O seminars. You can register for either the live or telecast presentations of the 2012 annual IIABNY E&O seminar by visiting the IIABNY website. For more information, email IIABNY Assistant Vice President of Education Kathy Lawler or call her at (800) 851-8853, ext. 218. We look forward to seeing you at this year’s E&O seminar.
Submitted by:
James C. Keidel, Esq.
Keidel, Weldon & Cunningham, LLP
A Follow-up to the January 2012 E&O Report Concerning Excess Line Placements
We would like to provide the following clarification to readers of the January 2012 issue of The E&O Report. In that issue titled “Excess Lines Statutes, Regulations and the Brokers’ Duties,” we cited the case of 720–730 Fort Washington Ave. Owners Corp. v. Utica First Ins. Co., 26 Misc. 3d 503 (N.Y. Sup., 2009) in footnote # 1 with regard to the issue of broad exclusions contained in some commercial generalliability forms obtained in the excess lines market. Of course, Utica First is an admitted insurance company. The reference made was unclear to one reader that this case was only being cited because the form under scrutiny by the court was the form the article was discussing.
The Utica First case highlights the fact that when it comes to construction risks, whether written in the admitted or excess and surplus market, brokers need to be mindful of the coverage limitations on contractual liability and injuries to anyone employed on site. You will find those limitations and exclusions in both excess lines policies and admitted policies as demonstrated by the Utica First case. These policy limitations are not illegal and, in fact, the cost to obtain broad form contractual coverage would be prohibitive if available. Full disclosure up-front in writing to the named insured is the best practice.
We want to thank the exceptionally careful and conscientious people at the Excess Lines Association of New York for pointing this out to us. Submitted by:
Howard S. Kronberg, Esq.
Keidel, Weldon & Cunningham, LLP