Insurance agents and brokers who market themselves as experts in cannabis or cyber could wind up regretting that positioning. Because both are relatively new exposures subject to changing regulations and coverages, producers marketing themselves as experts could face scrutiny, lawsuits and possible errors and omissions claims, according to speakers at the Professional Liability Underwriting Society (PLUS).
“Any time we see someone advertise expertise, we’re going to see a claim,” said Kiera Goral, assistant vice president of Specialty Claims at QBE.
Patrick Carley III, a New York-based partner with the law firm of Traub, Lieberman, Straus & Shrewsberry, is seeing a number of E&O claims resulting from producers not understanding cyber, but still purporting to be an expert.
“It behooves agents and brokers to be very cautious about exactly what they are representing their expertise to be, especially when it comes to cyber,” said Carley.
Given that there are many plug-and-play cyber products on the market, agents may miss coverage gaps, advised Javier Gonzalez, partner and executive vice president of Sales for N.J.-based Axis Insurance Services. That’s why it’s vital for agents to educate clients, he said. After a loss, a client may question why a particular coverage wasn’t offered. Gonzalez suggested that agents and brokers who use checklists when reviewing a client’s insurance portfolio include cyber on those lists. In addition, because the cyber product is constantly evolving, auto-renewing without a review is a bad idea.
“I think on the claims side, it’s pretty clear when there’s a large loss, it’s typically going to be as a result of the agent or broker dabbling in a product they didn’t have any previous experience in,” said Gonzalez.
It’s especially important to review coverage when a policyholder is changing carriers, said Michell Girardin Freimuth, vice president and insurance agents E&O practice leader for Allied World. She suggested having clients sign off on changes, especially if they are losing coverage.
Agents can mitigate this risk by educating younger employees on communication and what to include or not include on social media sites. QBE’s Goral has seen depositions where printouts of social media posts were brought in to support “expert” questioning. She also suggested completing peer reviews and identifying for long-standing clients where there is likely to be a coverage gap before a claim arises.
Carley added that employee social media accounts should be monitored, and employees should be reminded to memorialize oral conversations with clients. Agency websites should be reviewed regularly, as well.