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...ght? Does the applicant lease/an class='cm-highlight'>rentan> vehicles to others with operators? ...cle, injuring four people in two other cars. The value of the four Bodily Injury claims came to approximately $700,000. The employee’s own Personal Auto policy had a 25/50 limit. The claim against the agent was eventually settled for $447,000. Conclusion Writing commercial Auto Coverage is not as easy as you may think. Effective use of an Exposure Analysis Checklist will help educate your staff and your customers on this coverage – and go a long way toward ensuring that you do the proper job every time. Curtis Pearsall, CPCU, AIAF, ARM, CPIA, is president of Pearsall Associates, Inc. (Whitesboro, NY), a risk-management consulting firm that specializes in helping agents protect themselves against E&O claims. To contact him, call (315) 768-1534; e-mail: curtis@pearsallassociates.com; visit www.pearsallassociates.com; or blog: www.agentseotips.com. Reproduced, with permission, from Rough Notes magazine.

...ore rigorous training, testing, appan class='cm-highlight'>rentan>iceship, and licensing than people in i...nsibility. HOME BUSINESS EXPOSURE Home-based businesses are booming, and agents need to automatically ask clients who have such businesses about their work situation during fact-finding and before renewals. People working out of their homes have General Liability, Professional Liability, and Property exposures that the typical Homeowners policy doesn’t cover. Exercising due diligence here means asking the questions and getting a handle on the types of exposures. Conflict between Personal and Business exposures might be resolved by writing the client’s Homeowners and Home Business policies with the same insurer. DIRECTORS & OFFICERS LIABILITY Nonprofit and for-profit corporations both have an obvious D&O exposure that the insurance professional should deal with in fact-finding and at renewal. What about the exposure of an individual who’s a director for either type of corporation? The Personal Lines agent needs to be aware of the corporation’s coverage to pick up the exposure for this person. State laws vary, but often non-profit directors have less individual exposure than for-profit directors. In any case, if the corporation has no D&O coverage and the director is actively involved in decision-making, the agent needs to address this. D&O policies aren’t standard, and neither are the duties directors perform. Directors and officers often don’t realize their exposures or know the extent of the corporation’s D&O coverage and limitations. The agent needs to review the policy with both the management and the board of directors and have a discussion about the general differences among D&O contracts. INTELLECTUAL PROPERTY Patent, trademark, and copyright infringements are the main areas of intellectual property exposure. There are also various Personal Injury exposures related to libel, slander, defamation, violation of right of privacy, piracy, unfair competition, and title or slogan infringement. In some cases, directors and officers may be held accountable. The issue is more widespread than you might think: A recent market survey of a low- population Southwestern state found that about 150 businesses controlled more than 5,600 patents. Use of the Internet has worsened the problem. The ability to download information from World Wide Web can be an enormous exposure to the downloading party and the source alike. There are intellectual property exposures for those who’ve been infringed upon and those who do the infringing. Either way, there’s a long-term, complicated legal process for both parties and substantial legal expenses. There’ve been minimum estimates of $250,000 to $300,000 to take such a case to trial. Most carriers are very conservative about offering Intellectual Property coverage, and there’s no standard way to deal with the exposures. An agent’s best course is to know about the exposures a business faces and to be able to offer risk management and coverage options. At the very least, the agent should point out the exposures so the client knows the areas that lack coverage or for which coverage isn’t available. From an E&O standpoint, not discussing a problem until after there’s been a loss and the claim denied for lack of coverage will certainly tarnish the agency’s position. COMPANY SOLVENCY A wealth of articles, reports, and statistical studies tell us that an enormous number of companies and groups is vulnerable to insolvency. Inefficient operations, poor management, high loss ratios, low investment returns, automation problems, misguided marketing strategies, and poor reserving practices are just a few of the problems. Any one or combination of these can lead to disaster. In the past it was probably sufficient for an agency to check ratings in A.M. Best’s “Key Rating Guide” or a similar publication every year. Today there’s so much data available on demand and reaction time is so tight that ongoing ratings diligence is necessary. Many E&O policy contracts deny such claims because they have company insolvency exclusions. Sometimes a company might amend its exclusion by limiting it to companies below a certain ratings category or to an unrated company. Whatever the particulars, this exclusion alone means an agency should carefully scrutinize the financial performance and ratings of the standard and surplus lines carriers it uses. Sometimes your only choice may be a carrier that’s not up to par, and you’ll have to make a business decision whether to use it. In such a case, give the client a very specific and careful explanation of the risks involved in using the carrier. If you go ahead, carefully document your file with written confirmation that the client understands their decision and that the client received a copy of the confirmation. It’s probably preferable to have an agency policy never to use a carrier that A.M. Best’s or another secure ratings organization rates below a certain level. When a carrier falls below the standard, agency and client must decide how to proceed. CONCLUSION These are only a few of the emerging E&O exposures that agencies face. Making sure producers and staff know about them and practicing due diligence in day-to-day activities will go a long way toward reducing agency exposures. There’s no guarantee that asking the proper questions and taking appropriate action will prevent an E&O, but doing nothing is certain to leave an agency in a poor position to defend itself. Due diligence can help reduce the frequency and severity of E&O claims as well as give your clients a valuable service.

...is relationship with you is transpaan class='cm-highlight'>rentan>. Or you can become proactive, contacti...or, consider replacing them with diffean class='cm-highlight'>rentan> relationship-based clients. You know the quality and value you bring to a client relationship. If the client does not treat you, your staff, or your agency as you would expect someone to treat a valuable asset, you are probably better off without them than with them.

... borrow a customized van. I didn't an class='cm-highlight'>rentan> it, nor was it provided to me as a loaner for my car being under repair. After checking into the hotel the first night, I went to pull into the parking garage. Little did I realize that the van was higher than the height of the parking garage, and I cracked the top of the van. The damage came to $1,300. When I got back home, I notified the auto dealer of the damage. I also notified my agent, who had me fill out the appropriate claims report. When I asked my agent how my policy would respond, he advised me, 'Don't worry about it, your policy should take care of the damages.' Unfortunately, he provided me with this opinion without checking with the company. In actuality, because of a clause in my policy, my carrier paid the deductible on the auto dealer's coverage, and the rest of the claim has been submitted to the auto dealer's insurer. Obviously, a client calling you to report a claim is not a new situation in your agency. But a few situations more important than the one I just described might develop into an E&O claim. What guidance have you provided to your employees when they are asked, 'Is the claim covered?' Do they pull the file to check what form the coverage has been written on, or what the limit of protection is? Or do they say the claim is covered without checking? If you tell clients that their claim is covered and then it doesn't get paid to their satisfaction, you're going to have an angry client on your hands. This issue can be particularly sensitive with producers who want you to pay off a claim to avoid angering a customer. Here are a few tips that will minimize any potential problems: Make sure your claims staff is trained in how coverages respond. This may sound elementary, but when I first worked at an agency, I handled S-Z for Personal Lines, Commercial Lines, and claims-and was never provided any training in claims. Know the authority levels of each of your companies. You don't want to answer questions based on what nonauthorized personnel have told you. Don't say that a claim is covered unless you're absolutely positive. If there's any doubt or anything unique about the claim, contact the company; it can be a true resource. If you don't think it's covered but want to submit it to the company, let the client know your thoughts and make no guarantees about coverage. Document phone conversations with the client and the companies. Include the name of the person, the date and the time of the call, and pertinent details. Take the facts down exactly as they were provided. Don't coach them on how a claim might be paid. Provide guidance on how the claims process works and how long it will take before a decision is made. Clients who are told they will hear about the claim in a week are more patient than those who wait only a day but expected a two-hour turnaround. As far as E&O threats are concerned, the handling of a claim is where the 'rubber meets the road.' Handling a claim promptly and professionally will keep your clients happy-which is a large part of avoiding E&O claims. This article originally appeared in the Utica National Insurance Co. E&O Bulletin and is adapted by permission. Curtis Pearsall is vice president, E&O, of the Utica National Insurance Group....

...nsurance agents/agencies do you curan class='cm-highlight'>rentan>ly do business with? ___ one ___ two ...______________________

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... job and provide value to the company. As Walter Olson, author of The Excuse Factory states, today's interview guidelines "eliminate the small talk." Some prohibited questions are proper to ask after the interview process for statistical and other reasons. Unless clearly job-related, the following is an example of questions that should be avoided: "What is your maiden name?" "Do you own or an class='cm-highlight'>rentan> your home?" "What is your age?" "What is your date of birth?" The dates of attendance or completion of elementary or high school. Questions, which tend to identify an applicant's age as over 40. Birthplace of applicant or of applicant's paan class='cm-highlight'>rentan>s, spouse, or other relative. "Are you a U.S. citizen?" or "What is your citizenship ... Have you ever been arrested?" unless they are in a security-related position. It's okay to ask if they have been convicted of a felony. Questions regarding refusal or cancellation of bonding unless they are in a security-related position. Questions regarding service in foreign military. Questions regarding applicant's curan class='cm-highlight'>rentan> or past assets, liabilities, or credit rating, including prior bankruptcies unless job-related. Questions regarding ownership of a car. Questions regarding length of residence at a particular address. Requiring a list of all organizations, clubs, societies, or lodges to which applicant belongs. Questions to applicant's former employers or references, or acquaintances of references, which elicit information specifying the applicant's race, color, religious creed, nation original, ancestry, disability, mental disability, physical disability, medical condition, marital status, ...

...e Xerox people came in with a diffean class='cm-highlight'>rentan> approach and a series of probing quest...rs to be completed. When the customer an class='cm-highlight'>rentan>ed a car, the insurance agent rejected the an class='cm-highlight'>rentan>al bill, saying, 'I didn't know you wanted that coverage.' It was clear that the insurance agent gave the customer 'basic' coverage to get the account. At renewal time, the customer changed agents. Should the customer have read the policy coverages more thoroughly? Of course. But most of us look to the salesperson for help in making the right decisions. Candor does as much as anything to establish a salesperson's credibility, and it results in customer confidence. The superior salesperson recognizes the need to win ...

...sues, as well. Once it becomes appaan class='cm-highlight'>rentan> to you as a potential buyer that the s...ilding? Is the lease transferable? Is an class='cm-highlight'>rentan> likely to be raised post sale? Finally, it’s not all about “price“ anyway. Price certainly matters, but is rarely the key to the sale. A seller will probably have other “hot buttons“ that can make or break the sale. Some potential hot buttons are obvious, such as how key employees will be treated post sale. Other hot buttons can be quite unusual. . We well remember a sale that hinged on providing a parking space out back on company property for the retiring seller’s yet-to-be-purchased RV. The buyer balked, initially which would have killed the sale. It’s been many years now, and the seller never did quite get around to parking his RV in that spot that seemed so crucial to him at the time. Larry Morrison, CLU, ChFC, is president of the Business Transition Network (Arlington, WA), a firm specializing in agency evaluation, purchase, mergers, and business succession planning. You can reach him at (866) 475-9992 (toll free); or e-mail: larry.morrison@comcast.net. Gary E. Jacobson, JD, a partner at Vander Wel, Jacobson, Bishop & Kim, PLLC ( Bellevue, WA), offers expertise in the legal aspects of agency evaluation, purchase, mergers, and business succession planning. You can reach him at (866) 498-0008, toll-free; e-mail: ga[email protected]; or visit www.vjbm.com.

...e ideal. These include students, paan class='cm-highlight'>rentan>s of young children, writers, actors, a...ases, you'll have people working diffean class='cm-highlight'>rentan> shifts; consider which prospects your night shift is more likely to reach than your daytime staff. ASSIGN LISTS: This can be done one of two ways. If you're planning a one-time contact merely to generate interest in the agency or a product, keep the list with a certain phone. This way, lists are not moving around, getting lost, generating duplicate calls, and so on. And a salesperson on a second shift can pick up where the first one left off. But your Sales Center staff or telemarketers are generating account development, then you plan to make scheduled or repeated contact with your prospects. In this case, you should assign each individual a certain list of accounts. Repeated contact with the same person guarantees a certain feeling of rapport, and increases your chances of turning prospects into clients. DATABASE DEVELOPMENT Successful telemarketing depends on the gathering of information-and there's no better place to store the wealth of information you've gathered than in a computer database. Most independent agencies now have hardware and software capable of storing and maintaining such a prospect database. If you don't have these capabilities yet, your database could exist as folders of prospect information stored in a filing cabinet. You'll want to use telemarketing to build your database in a number of ways. For example, try to collect, verify, and keep track of the following information on each Commercial prospect: Company name, address, and phone number Key decision-maker's name, title, and function SIC classification, company's market segment classification Annual revenue, number of employees Purchasing and payment history Marketing exposure Date and purpose of the last contact and the next expected contact Your database doesn't have to be elaborate to start out. In fact, it's wise not to add a name into your prospect database until that person has been verified as a prospect; he or she should have been contacted at least once or have shown some interest in your products and services. Your potential for telemarketing success is determined largely by your database; your list is your market. Define the criteria you feel is needed in the list, then seek to obtain the appropriate information nation and keep your list constantly updated. Email this article to a Friend

...re for their families is much diffean class='cm-highlight'>rentan> from previous eras. We may juggle many...#160 Freezing of plumbing, heating, air conditioning, or other household systems   Theft or vandalism   Falling objects   Your Business   Commercial or business insurance offers property and liability coverage whether you operate from your home or another location. While homeowners insurance may cover business property within specified limits, it typically is insufficient and does not protect against lawsuits related to your business activities. Selecting the right insurance is just as important as the choices you make for company stationery, equipment, or services. Your independent insurance agent can help you review your options and tailor coverage that best meets your needs.   Kay   Kay is the owner of an upscale antique shop in a trendy part of town. Her sales have grown steadily during the past several years with the public's renewed interest in antiques. Kay takes great pride in her ability to spot the best pieces and prominently displays them in her shop. A series of break-ins in the neighborhood prompted Kay to review her insurance to ensure that her business is adequately covered.   Kay and her independent agent reviewed her most recent financial statements, the lease on the shop, and her business ledger showing sales, purchases, profits, etc. To assess the state of her business and identify changes from the last review. Given the growth in her business, her agent recommended that Kay consolidate her existing multiple policies and purchase a package policy.   <