17 Jun Standard of Care – Words Can Hurt You
Before I get on my soapbox about what agencies say about themselves, I understand our duty. In most states, it is an agent’s duty to procure the coverage requested within a reasonable time or to otherwise inform the prospect/client of the inability to do so. I also understand that there are Professional States, Special Relationship States (broken down into four categories), and Order Taker States. No matter what state you operate in, words can hurt you.
I want to start with a story (for those who know me, you know I am a storyteller). Several years ago, a good friend of mine asked me to do an audit of their agency. When I walked in the first morning, Terry asked me, “How do you make a website handicapped accessible?” This was the beginning of businesses getting sued when their websites were not compliant with the ADA. This involved one of their insureds who sold a product online, getting sued when a legally blind person could not purchase the product because they could not read it. Claims were submitted to both EPLI and cyber policies, but were denied. I spoke with the producer who had written the account and asked why he didn’t offer the endorsement that could have provided a sub-limit for defense for this type of claim. He said he was not aware of the endorsement. The attorney bringing the lawsuit visited the agency’s website and saw the claim that it “sold the BEST coverage” and used that four-letter word against the agency. The agency lost the case based on that four-letter word. Moral of the story? Words can hurt you.
What are you saying about your agency in your marketing pieces, including your website? Are you experts or specialists? Do you sell the best coverage at the best price? Do you tailor an insurance program to fit your client’s needs? These are just a few examples of the overstatements I have seen in the numerous websites I have reviewed over the years. Some agencies still say they do these things – does yours? Will those grandiose promises you use become the “star witnesses” used against your agency in an E&O claim?
Numerous books, articles, webinars, and claims examples have been devoted to this topic. This blog would become a novel if I revealed everything I have seen or viewed. Yet the problem continues. Why? There are a variety of reasons: “it is just an ad,” “we didn’t write it, our ad agency did,” or “no one reads all that anyway.” It might just be an ad, but the agency’s job is to ensure that all information answers one question: “Are we doing what our marketing material states we are doing?” Maybe no one does read all of it, but at the time of litigation, the lawyer suing you will.
Those in charge of all marketing pieces need to understand that during E&O litigation, it is common for the entire agency file to be subpoenaed and made available to both the attorney defending the agency and the attorney involved in suing the agency. This includes not only the file information but also all promotional materials, including the website.
How the agency’s capabilities are marketed and communicated to the public plays a key role in determining the degree of liability in either the development or final resolution of an E&O claim. In today’s E&O litigation, statements made on an insurance agency’s website or in any marketing piece are common evidence against the agency that has failed to live up to the promised standards.
The fixes are easy. We are knowledgeable and professional, and we help tailor a program to protect their assets. When we list coverages, exclusions, or limitations, we always say the following list is not all-inclusive. All promotional materials must be approved by management. All promotional materials must be reviewed periodically and answer the earlier question. If we are not doing what the material states, we have two choices: start doing it or change the material.
As Roger Sitkins said, “The key is to underpromise and overdeliver, and never to overpromise and underdeliver!”