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Marketing Personal Lines to Employees Using Workers Compensation Information

Author: VU Faculty

Your agency has rosters of employees that are submitted to you annually in order to write the business's workers compensation coverage. Your sales department would like to use these lists to send marketing letters/brochures to employees to solicit their personal lines accounts. Is this a violation of privacy laws or is it otherwise a good or bad idea?


Recently, our "Ask an Expert" service received the following question:

Question..."We write several area volunteer fire departments and would like to market personal insurance to the volunteers. We have rosters of active volunteers from each department that are submitted to us for Work Comp auditing each year. Would it be a violation of privacy laws to use these lists to send marketing letters/brochures to the volunteers to solicit other coverages? Thanks!"

Answers...Good question. At issue are legal considerations (for which you'd best ask an attorney) and business considerations. While your question addresses "volunteers" that are covered by a workers compensation law, your general question would apply to anyone who is handling the account of a business with employees the agency might like to market to. Below are some observations from the VU faculty.

Faculty Response...
What does your agency privacy statement indicate? Checking the one on your web site, it becomes a little vague. One could argue that the info did not come from the website and that begs the question of what is protected. If the info on the audit includes a SS#, there are additional privacy laws to protect the information. All in all there are over 30 Federal privacy laws.

Faculty Response...
There are numerous "privacy laws," so your best source would be an attorney familiar with them all.
For example, the Gramm-Leach-Bliley Act (GLBA) restricts the use of "personal financial information" (also called NPFI - non-public personal financial information). Since you are getting the marketing list from a commercial WC policy, that might not be a violation of GLBA.
The Fair Credit Reporting Act (FCRA) deals with "consumer reports," and is so broadly defined that it includes credit reports and credit scores, MVRs, CLUE Reports, and any other personal information including "character, general reputation, personal characteristics, or mode of living..."[Section 603]. Being a firefighter may or may not be within that definition. As my attorney friends say, "You won't know until after your trial." Seek legal advice.
A concern about getting information from WC is HIPAA - Health Insurance Portability and Accountability Act. If the information comes from WC claims, this might be a violation. Ask an attorney or other expert in this area.
In addition, there are other privacy laws which might also have a bearing on your marketing efforts which I am not all that familiar with.
Lastly, if I was the firefighter/recipient of a marketing brochure you sent me based on your accessing my information from a WC policy, I would be quite upset, since we're all so concerned about our privacy these days. In that case, well-intentioned marketing would likely backfire on some recipients. There are probably "safer" ways to get marketing information to this group.

Faculty Response...
Probably. Ask an attorney.

Faculty Response...
It is my opinion that you are about to cross the line and in the end it may cost you the account. It will only take one to ask how there name address was obtained and you will be the bad person. The list is given to you for a specific business reason and you need not violate the trust. Instead go to the Fire Chiefs and make your case to solicit the personal insurance coverages of the volunteers and ask for the means to do so. Then you have no question and all is on the up and up. Truth is you would not ask the question if you were not already feeling close to the line. Trust your gut in matters of effects.

Faculty Response...
The "Privacy Law" (Gramm-Leach-Bliley Act...GLBA) applies only to personal and "household" insurance. Using information from a commercial property to market for personal lines does not violate GLBA. As for other laws, consult with an attorney.

Faculty Response...
I think the decision can be made without consulting any privacy laws. Don’t do it. I certainly wouldn’t do it without the employer’s permission and even if I had it, I still wouldn’t do it. If I were an employee and got solicited from an insurance agent for my employer, I’d probably be angry with the agent and my employer. You could cause some problems that would make your commercial insured very unhappy. A better approach would be to see if your insured would allow you to make a 15 minute voluntary presentation to employees or see if your insured would distribute your marketing information to employees. Do you write HIS personal lines? If not, then you have an uphill battle.

Faculty Response...

While this may be the easy way, I'd take a different route. If you really want to distinguish yourself from other agents, get involved in fire department activities and organizations such as your state fire chief's association. They typically have associate memberships that allow you to participate in functions and conventions. Rather than appear as opportunistic, offer them something in return. Put together a short presentation on insurance issues, some of which might be unique to firefighters (like auto coverage for use of vehicles in emergencies, HO coverage for equipment kept at home or personal items at the fire station...are they pure volunteers or paid-on-call and how does that affect their personal insurance, what coverage do they have under the commercial program, etc.). Help them with fund raising. Get to know the guys in the trenches. I worked with firefighters for years. My brother is a disabled firefighter who has had two back surgeries and five neck surgeries because of his job. These men and women are a different breed. Get to know them. Then worry about selling them something.

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