What two things do the following situations have in common?

  • An insured comes into the agency to get her CSR to review the rental agreement on a cabin she is thinking about renting for a week. She doesn’t have a question about insurance…she just wants her CSR to review the contract since she’s so smart and helpful.
  • A condo unit owner hired a general contractor (GC) to remodel a unit he bought. A leaky pipe was discovered and the GC hired a plumber to repair it. The plumber sent an invoice to the condo association and they paid it. Then the GC sent an invoice to the association for “supervising” the plumber. The association then asked their insurance agent if they should pay this. The agent now is asking what advice they should provide the association.
  • An agent is trying to figure out how to answer a question from a customer as to whether they can legally drive their golf cart on public roads and, if so, is a license required?
  • A homeowners association has asked their agent if the community swimming pool must comply with the Americans with Disabilities Act.
  • A personal umbrella prospect wants to know if he was sued, could the plaintiff get his IRA and cash value from his life insurance policy.
  • A business prospect is buying a building and wants the agent to tell him if fire codes require him to sprinkler it.
  • An insured wants to drop her personal umbrella after someone told her that her wages could not be garnished if she was sued. Is this correct?
  • An insured personally owns a car and wants to lease it to his business and add it to the business auto policy. Do you have a sample lease we can provide to the customer?
  • The agent for a general contractor is looking for a sample hold harmless agreement the insured can use with his subcontractors.
  • A condo association insured needs to tear out dry wall in a unit to repair a deteriorating pipe, and they’re asking the agent who has to pay for it, the association or the unit owner. There is no insurance claim.
  • An insured’s son is 19 years old and lives at home. Dad wants to transfer the title to the kid and write a low-limit auto policy. Can he be sued if the kid injures someone?
  • A prospect is starting a business with a friend and wants to know if they should operate as a partnership, LLC, or corporation.

First, each of these is an actual scenario/question received by the national Big “I” Virtual University or by the Florida Association of Insurance Agents (thanks, David Thompson, CPCU).

Second, each of these is an example of a customer inquiry that has little or nothing to do with insurance and is probably not the type of question most agents are qualified to answer. The issue here is the agency’s E&O policy. Most E&O policies cover something like “professional services” which are defined to mean “activities as an insurance agent or insurance broker” or something to that effect. Also often covered are losses arising from “insurance consultant” activities. Note the word “insurance.” In the scenarios above, the advice provided by agency staff does not involve “insurance” per se, so a claim or suit about bad advice quite likely would not be covered by the agency’s E&O policy.

One thing that makes customer service staff so good at their jobs is the desire to be helpful to customers and prospect. But, just keep in mind that it’s possible to be TOO helpful.

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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

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