Smart Website Safety

It won’t surprise any reader that, as the one insurance person in the family, I found myself going through my father’s insurance papers after his funeral. I searched and searched for the umbrella policy I just KNEW he and my mother would have, but it was nowhere to be found. What I did find was the local agent’s name and phone number representing the direct writer with which they were insured. She explained that there was no umbrella and when I asked why, she was very clear, “He never asked for one.” In his state of residence, that was an acceptable answer because, like most of the United States, acting as an agent required only an “order taker duty” or “duty to provide as requested.”¹

Fortunately, it never became necessary to discover if that agent or carrier had expanded that duty by advertising or otherwise offering to go beyond that basic duty with coverage advice, exposure analysis, asset protection, and/or an ideal package of coverages to suit his needs. Any materials that indicated that the agency guaranteed a “special relationship” with its clients would have worked if we needed it.

Unfortunately, for many agencies, plaintiff attorneys DO have reason to search for those indications. Recent E&O claim history shows they are having good success when found.

An Agency’s Web Presence Has Dual Goals

Just about every agency realizes that it needs a social media presence which often starts with a strong website and an “app” (application). Like any marketing piece, good design starts with knowing the goal or goals. Good objectives can include:

• Attracting new business;
  
• Giving current clients access to their account information;
  
• Allowing “self service” options for client, either because they prefer “doing it themselves” or need to do it during off-hours;
  
• Providing current clients, and/or the community at large, helpful insurance-related information such as disaster ?preparedness, differences between working with a direct writer vs. an independent agency, or the various ways property values can be computed/insured.
  

Most marketing and errors and omissions (E&O) seminars provide very valuable recommendations, but they often seem to conflict when it comes to site and app content. The marketing “gurus” use words such as “creating client relationships,” “differentiation,” “hyper-value,” “going the extra mile.” “full coverage,” “proactive account rounding,” “exposure analysis” and “value added.”

Conversely, E&O seminar leaders urge caution about over-promising, creating that “special relationship,” extending the “duty to provide” coverage recommendations and using terms like “full coverage.” One multi-session attendee described feeling like the person between the rock and the hard-place. Should she be E&O-safe or should she be successful in this ever-more-competitive insurance marketplace?

Safe And Competitive

The industry has reached a consensus that any agency that waits for insureds to request coverage will miss important revenue opportunities. Further, these agencies will not be able to compete with agencies offering more analytical, recommendation-based insurance services. Plus, most insurance professional desire to guide and educate their clients, not just follow instructions, especially if those instructions leave exposures uninsured.

Happily, an agency can be E&O-safe while it is presenting itself positively and proactively in the marketplace. A simple change in wording from “we will” to “we will endeavor to” can help. Here are some well-intentioned but dangerous examples of wording on websites that if shown on the “big screen” in court could turn the case against the agency, along with safer wording that still gets the message across to the site or app user.

E&O auditors review and comment on agency websites as part of their analyses; and most agency principals immediately see the potential problems when they are pointed out to them. Almost every agency principal alerted to this issue comment that they “just weren’t reviewing the site for that exposure” when they approved it; or the site was updated or changed without as thorough of a review as when it was new.

While your site may not use the exact wording presented above, now may be a good time to go through it with a “jeweler’s eye” to see if modified wording is in order. You also may want to consult one of the site auditors listed on IIABA’s E&Ohappens website.

“Say What You Do & Do What You Say”

A website or an app is not JUST a marketing tool; each really is a representation of what your agency is to the world (literally). Even “safe” wording and reasonable descriptions of the agency’s business model can be used against you in court if the “picture” painted on the site does not match the “reality” of your operation. What you say your agency does will be tested if a plaintiff alleges the agency’s work did not match that description.

Many agencies assure clients and prospects that each account is reviewed annually. In many of those agencies, automatic renewals are processed as they come in from the carriers with little or no pre-renewal, post-renewal or even mid-term coverage review. It is not unusual for an agency to move a commercial book of business to a new carrier and discover it does not even have a record of what the client company does.

Here are some other examples of potential dissonance between a site or app description of what an agency does for its clients and the agency’s reality:

Website Essentials

Swiss Re, like all E&O carriers, has seen plaintiff attorneys bring the defendant agency’s web-based statements as evidence of the agency’s negligence in not fulfilling its “promise” to the client. Its Corporate Solutions Division has been very proactive in providing solid recommendations that are very easy to incorporate into an existing agency site or app, or that can be very helpful in developing a new agency site or app.

Some of those recommended “Essentials” are:

• Clearly list the states in which the agency is licensed to offer insurance;
  
• If the client/prospect is given the opportunity to complete information for a quote or coverage analysis, explicitly state that mis-statements or omitted information can and probably will change the pricing and availability of what the agency can provide;
  
• Include a privacy statement (available from the E&Ohappens website or your agency’s attorney), and be very clear that no information provided will be shared with other parties without the applicant’s explicit permission and provide a mechanism for the applicant to provide that permission;
  
• Encrypt all information that could jeopardize the user’s privacy and security. Those items include, but are not limited to, health information, full name, mother’s maiden name, social security and driver’s license and car registration numbers, as well as any free-form areas since the client could enter confidential information there;
  
• Be crystal clear that applying for insurance does not automatically lead to being insured. Specify exactly what the applicant will receive to verify that coverage has been put in force. Repeat (e.g. as a “footer”) on every page;
  
• Obtain, in writing or via an electronic signature, permission from any individual or business if you use a testimonial or quote from that entity;
  
• Avoid superlative and comparative words such as “the best” or “better than other providers” or “all risk” or “full coverage” or “the best insurance program.” Instead, promote the agency’s and its staff’s professionalism, experience, specialization, product line on their own merits;
  
• Set up a suspense system to ensure that the site and app information is current. Staff changes, carrier deletions and additions, product line updates, relevant law revisions, and agency hours changes and even location changes can get lost in the shuffle. One agency’s site very recently wished its visitors “A Very Happy 2010″ which did not convey the message of competency that the agency intended!
  
• Provide the agency’s credit and collection policy on any quote or coverage request page. For example, if the prospect’s old/incumbent agency reminds them to pay their direct bills and your agency does NOT, the potential new client has no way of knowing that they should not wait for your reminder call unless you TELL them you don’t. If their old/incumbent agency paid their agency-billed premium for them when their budget was tight and you do not advance premiums, the client deserves to be so informed. This will not only make the agency safer from E&O loss, but will begin client service off on the right foot.
  

Vendor-Provided Interactive Sites Make Your Agency’s Data Base An Even More Important E&O Safety Mechanism

Major agency management system vendors provide products that can be used as the agency’s site or that can be a “plug in” on the agency’s site. Most can also work as an app. These products have been deservedly popular and allow integration with the agency’s data-base so that clients can not only look up their coverages, often through the agency’s portalling of the client’s policies and endorsements, but the clients can also effect service functions by interacting with the site, rather than by contacting a service rep in the agency. Clients are increasingly comfortable with and like “doing it themselves” on a website or app. Many clients want to handle their insurance matters during hours that the agency cannot be physically available. These products, therefore, are becoming more than just attractive, they are necessary to meet market expectations.

It is not uncommon for an agency to offer an interactive site to its clients without verifying that its data base, which the client will now be using to get a certificate or a binder or report a loss, is not complete or accurate. Agency staff have been coping with this by using images of paper or the carrier websites – all of which is inefficient and has had its own E&O dangers – but now those dangers are accentuated. Recommended practice before opening up an interactive site to an agency’s clients includes:

• Data audits for field completeness and currency;
  
• Workflows that update the agency system first (rather than doing the carrier’s site first and awaiting the download into the agency system); and
  
• Ensuring that backlogs of agency work are eliminated so that the system detail is as up-to-date as possible.
  

A very simple example might clarify the importance of site and system synchrony. An agency is short-staffed due to an unanticipated staff departure and some work is not done in a timely manner. It might be the download suspense or the handling of an aged receivable; the upshot is that a cancellation does not get updated in the agency’s system. A commercial lines client, in that same timeframe, obtains a certificate of insurance from the agency’s website and directs it to an entity for which it is working. A claim occurs during a period of “no coverage.” The agency will likely be found negligent for allowing certification of coverage when coverage was not in force. It is important to point out that, even in the absence of a loss, client confusion is enough reason to ensure that the agency’s data base is “ready for prime time.”

Americans With Disabilities Federal Law

One important consideration in agency website design is accessibility. Two hundred and forty-four Federal accessibility cases were filed in 2016 regarding public accommodation businesses. The Department of Justice (DOJ) responded to one defendant’s interpretation that “only physical locations are subject to Title III of the Americans with Disabilities Act (ADA)” in this way:

“The United States respectfully submits this Statement of Interest to clarify ‘public accommodations’ longstanding obligation to ensure that individuals with disabilities are not excluded, denied service, or treated differently from other individuals because of the absence of auxiliary aids and services, such as electronic technology. This obligation means that websites of places of public accommodation… must be accessible to people who are blind, unless public accommodation can demonstrate that doing so would result in fundamental alteration or undue burden.”

Since most agencies’ marketing materials offer its location(s) as open to clients, prospects, and visitors – it is a place of “public accommodation.” Note that the DOJ’s statement above is a Statement of Interest, not a court or administrative filing; but an agency setting up a website would be wise to consider text alternative such as captions on-screen or available to be displayed. At minimum, this shows admirable concern for the vision-impaired and at maximum, it may keep the agency out of one of the expected multiple 2017 and beyond accessibility-based cases.

An agency’s web-presence is an integral and expected part of its overall business plan. Most clients want and expect the agency to be electronically accessible. Agencies will continue to face strong competition and need to differentiate themselves to keep current clients and attract new ones. Mindful setup of all information made available on the web and a commitment to keep that information up-to-date and carefully presented allows the agency to grow, retain business, develop a strong community reputation, and avoid E&O entanglements.

More information on website E&O issues is available here.

NOTE:

¹A minority of states have precedent that require insurance agents to do more than “provide as requested”. IIABA.net/EOHappens has a map showing each state’s stance, along with other helpful loss prevention information.

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Virginia M. Bates is an approved auditor and seminar leader for the IIABA/SwissRe E&O Program as well as an educator for many other insurance subjects for state associations, vendors, carriers, and other organizations. She consults with agencies on reducing E&O exposure, profitability, Human Resource management, Best Practice processes, business planning, and sales planning/direction. She also provides in-agency and in-carrier classes and other educational materials.

Last Updated: December 21, 2018
December 22, 2017