My very first real blog post was this:

“What Does ‘RTFP’ Mean?”

It’s a short read, so if you’d like to peruse it, then hit the Back button to return here, please do.

As the “RTFP” post stresses, one of the most incredibly frustrating things about coverage questions from agents is the apparently lack of understanding that you cannot answer coverage questions for a particular customer or prospect by generalizing about policy coverages. You MUST answer a question based on the specific wording of the policy in question.

I still participate in the Big “I” Virtual University as a volunteer faculty member, which largely involves responding to agent coverage and claim questions. In a single day this week, the following questions were sent to the faculty from the VU’s “Ask an Expert” (AAE) service:

  • “Will the liability that is afforded off the homeowners policy for a dwelling fire home owned by the insured cover that property if he demolishes the existing home and builds a new one?”
  • “Can a homeowner assault a guest (physically) and have the liability respond?”
  • “An insurance agency has an opportunity to contract through one of their carriers to sign up their customers to use a credit card. The credit card can be used for any retail purchase.  The agency will receive a $15 commission for each credit card signee. The question pertains to insurance coverage to cover the exposure for the agency choosing to get involved in this additional revenue stream. Signing up consumers does not require a license and is not covered under an Insurance Agents Professional Liability policy. My question is will this exposure be covered under the insurance agency’s general liability policy instead?”
  • “Our agency will be hosting a 5k next month  – we are required to have a SEP. If we have sponsors that want to set up the day of the event are they considered a “vendor” if they are not selling their products  – only giving out samples?  Would they be covered under the SEP in this case?”

The AAE guidelines are clear that submissions MUST identify the full ISO form number or, if not an ISO form, the proprietary company form must be attached to the submission…not an excerpt from the policy, but the full insurance contract. Giant letters on several pages link to the Guidelines. In addition, on the submission page itself, there is this:

If your question involves a policy form or endorsement, we MUST have the full ISO form number and edition date (e.g., CG 00 01 04 13 or HO 00 03 05 11). If it is not an ISO form, please attach the company form, along with any related claim information to your submission. We cannot respond to questions that, for example, refer to “a homeowners policy.”

If your staff is providing such generalized advice to customers’ coverage questions, then you have a very significant E&O exposure. Please educate everyone on the agency that coverage questions must cite the specific form language in the policy in question.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information