Would you buy a million doller house without looking into whether or not it’s in a flood zone? It’s people like you that are fueling the responsibility flight in this country.
And do you know how expensive excess flood coverage would have been for the beyond the NFIP? They people wouldn’t have bought it, I’ve never had a customer buy it..
Im assuming the insured was also aware they were in a Flood Plain….doesnt the insured have some responsibility to address these issues, and not just the agent??
So, what complicity does the property carrier have? None. Who is ultimately responsible for flood insurance? The owner of the building, not the agent or property carrier. Also, where was the mortgagee? I don’t know of a mortgage company that doesn’t know when a piece of property is in a flood plain. Here we have corporate executives who weren’t smart enough to know they were in a 100 year flood plain and protect their assets. Another case of “running from responsibility.” Hope the courts throw out the case and send a message that business owners and executives need to know their property locations, along with the their business.
We recently had an insured who had to get flood insurance. He was unaware that he was in a 100 year flood plain until he when for a loan to expand his current building. The mortgage company had to get the flood certificate for us.
A businessowner of this size would have to know their in a flood plain. Obviously, they are looking for the deep pocket theory and ultimately an agent’s E & O will be sucked into the vacuum.
Hopefully, most of the loss will be assumed by the businessowner since their CFO was not prudent enough to recognize the exposure.
You are all correct, BUT I served as an Expert Witness for an agent under very similar circumstances a year or two ago, and his E & O did pay quite a few dollars to the insured. There was no mortgagee.
Bottom line is the AGENT is the professional here. IF they actually did not suggest the flood coverage, it is the fault of the agent.
If we as agents want to remain viable and not get flushed down the toilet of irrelevance in today’s market, we have to take our profession seriously and accept the boons and the banes that brings.
If a doctor fails to stitch an incision, it is the fault of the doctor, not the patient, although the patient probably knows that an incision should be stitched closed.
So we end up with one policy in the file and 146 sign-off sheets for all of the other various types of insurance possible for this account that we advised they buy and they either declined to purchase it from us or purchased it from another source (and we still should have a sign-off for the coverage they purchased elsewhere to protect our butts once again) Isn’t this industry grand ?
So when does the insured take responsibility for his own life, business and coverages? The anology about the doctor is comparing apples to watermelons. Yes we are professionals, however before the insured buys anything it is his resposibility to educate himself on what he needs.
This defense of “He didn’t tell me” to avoid the resposibility of not reading his own policy or purchasing the coverages he should know he needs, is getting asinine. E & O should only be used for what it was designed for- mistakes. Mistakes in typing, mistakes in listings of coverages, or omissions of fees. Not as a scapegoat for an insured for the failure to take responsibility of his own insurance unto himself. Come on- when are people going to take some responsibility for their own screw ups and ignorance.
An agent should offer NFIP flood coverage to everyone in a participating community. Roughly, a quarter of all flood losses occur in areas that are not designated
“hazardous” by the Army Corp of Engineers. That being said, the NFIP policy excludes business interruption, the maximum limit for a commercial building is 500,000 on the building and 500,000 on the contents, and the loss settlement is depreciated. The beverage company may get some compensation but will it even equal their legal costs?
Do not assume or make insureds responsible for reading their policies. They do not and are not, and many professional agents and attorneys can’t understand the policies. Why make an insured responsibkle for knowing they are in a Special Flood Hazard Area? Most agents don’t know which zone their insureds are in. To suggest that agents shouldn’t be held responsible for errors such as not identifying an exposure and telling an insured that coverage is available is inane. Did the CNA policy provide any flood coverage? Virtually all standard property forms exclude flood damage and CNA’s policy would afford coverage only by way of a CNS-specific endorsement. True that no B.I. coverage is available from NFIA. As an expert witness in over 1,350 cases, I’ve seen it all – from both sides.
It’s pretty easy to point the finger elsewhere especially if there is financial gain involved. Chances are that the company would have self-insured the flood coverage judging from the premiums they are already paying. If there is a mortgagee or loss payee and it happens to be a Federally licensed Bank then some responsibility lies there as well. No doubt the agency should have offered the coverage as long as they knew where the property was located, but it should be a shared responsibility between the agent and insured.
Granted, the agency in this case should know the area in which they sell and as a courtesy and somewhat as a duty, inform the customer that they should consider Flood Ins. But, it is beyond me how a company with considerable assets as well as resources would not have researched the location in which they decided to build a wherehouse. This to me puts more of the onus on the beverage company than the agency. This lawsuit, in my mind, is a feable attempt to avoid responsibility for a major screw up.
So when does the insured take responsibility for his own life, business and coverages? The anology about the doctor is comparing apples to watermelons. Yes we are professionals, however before the insured buys anything it is his resposibility to educate himself on what he needs.
The more the insured learns and knows, the less relevant we become and the more directr writers will emerge as the norm.
I try to educate my insureds, but I do that to show them that I am on their side. I am the knowledgeable person, I do not expect them to take the time to know our industry, or keep up with the ever changing landscape.
We are the professionals. The doctor example is no watermelon…we go to the doctor for advice that we do not have or may not understand.
Would you buy a million doller house without looking into whether or not it’s in a flood zone? It’s people like you that are fueling the responsibility flight in this country.
I assume it is my post, but will refrain from rebutting until I know for sure.
Nick- you mentioned the failure of a doctor to stitch up a patient; that is an after effect, one would have hoped before you go under the knife that you would have gotten a second opinion. The insured should have educated himself on what types of coverages he would need to avoid a loss- of any kind, and checked with another agent. One is before hand the other is after the fact- hence the apples to watermelons. I know we hate shoppers, however if it were my property yes I would have gotten a second opinion.
Most OIC sites have sections of the site designed for education consumers. So he could have gone there. Yes, help educate the insured, however where does help end and responsibilty begin?
(From JT’s response) Nick- you mentioned the failure of a doctor to stitch up a patient; that is an after effect, one would have hoped before you go under the knife that you would have gotten a second opinion. The insured should have educated himself on what types of coverages he would need to avoid a loss- of any kind, and checked with another agent.
JT: I will just say that the sale is to the operation as the non-advised coverage is to the suture.
I do think that people should strive to be more educated about what they do in life…but when it comes to such technical things, and even the sheer amount of things there is to know, we cannot expect it to happen. That is what we are here for.
We had a case at a former employer I worked for where a plumber had an Employee Dishonesty situation, to the tune of $40,000. He did not have coverage. Fortunately for us, we had documentation that we offered it to him. He bought the coverage after the fact. Now, one strategy to avoid any suits such as the “Beverage Company” scenario is to choose a client base that IS educated and savvy enough to work WITH us.
I just feel that if we as agents project an aire of indifference to a situation such as the article presents, we are in danger of making our industry irrelevant. I feel that the independent agency system is in danger, what with the internet and the capabilities this offers companies to go direct. Geico is a concern on the P/L side, since they are so successful in practice and especially in marketing.
I know C/L agents have a stronger foothold, but I have seen solicitations from my bank offering C/L coverages. I just feel that we need to take our trade more seriously. I have seen many agents, and I do not think anyone here fits this description, that have an attitude of ‘coasting’ to retirement. The talent pool in the independent agency system, again from what I have seen, is not very deep either. I worked with someone who failed the licensing test 5 times…but is still going to try until passing. Many others I have seen come and go never had any experience with insurance aside from purchasing a policy (let alone reading one).
The sad truth is that in a case such as this, it is our job to secure the protections our clients need. We are the advisor.
Armando, If insureds should not be responsible for reading their policies, then why should we waste time and money sending them one? I don’t believe any agent is willing to take on the responsiblity of making sure that ALL of their insureds know everything that they are exposed to, I am not suggesting that agents should not try to educate insureds, but we can not be held responsible for clients that should have known better, such as this case. It is sad if the agent did not get a signed release for flood coverage, but it is also 99% sure that the insured would have rejected the coverage simply due to cost and lack of adequate coverage provided by it. A mutli million dollar company with a large facility, and possible financing ( NOT SURE) I think there is more blame to throw around than just the agent. The CEO, CFO of the company itself and who ever brokered the purchase of the property could also have a little mud thrown at them. Armando I wander if your auto insurance agent has ever asked you about what your profession is, and did they offer you a quote for your business exposure or how about Work Comp? If not, with the right lawyer and your opinions, you could get rich. I am sure that even as an EXPERT WITNESS, I could find gaps in your coverage that are important and necessary. Who is to blame if you are not covered properly? Clearly you don’t think you should be held accountable to read your policy as a consumer. You might be good, But I hope your not one of my customers, I don’t need any more irresponsible customers. Don’t even try to suggest you are responsible, I am sure you have a policy, but have said it should not be your responsiblity to read it, attitudes like that breed problems. Why not buy a bare bones stripped policy and simply suggest that is what your agent offered so he is to blame for not selling you absolutely everything available. In my years in the industry, I have never ever had a client buy everything I suggested they buy. Should I refuse to insure at all, as I am aware they are not properly covered? I can just see the endorsement to my E&O (only provides coverage for claims that result from full coverage all risk policy transactions that leave no gaps in coverage to allow exposure to E&O claims)
Again the fact is that agents must protect themselves against lawyers first and then help protect the insured if time allows. excuse me I have just discovered 63 new disclosures and releases I need to design to protect myself against the very people that I sell to, who should not be held accountable for any decisions they make about life. Thank God we do get signed releases on all policies we sell, but did I forget to offer the customer coverage for the sky falling? I hope I’m covered for that. Oh Wait, I’m an insured on my E&O policy, I don’t have to read it, I will just sue the agent that sold it to me, they should have offered me more coverage than they sold me, I’m sure of it. I did not sign any releases or declination of coverages when I took out the coverage, so I’m good to go.
Armando:
Would you buy a million doller house without looking into whether or not it’s in a flood zone? It’s people like you that are fueling the responsibility flight in this country.
And do you know how expensive excess flood coverage would have been for the beyond the NFIP? They people wouldn’t have bought it, I’ve never had a customer buy it..
Im assuming the insured was also aware they were in a Flood Plain….doesnt the insured have some responsibility to address these issues, and not just the agent??
So, what complicity does the property carrier have? None. Who is ultimately responsible for flood insurance? The owner of the building, not the agent or property carrier. Also, where was the mortgagee? I don’t know of a mortgage company that doesn’t know when a piece of property is in a flood plain. Here we have corporate executives who weren’t smart enough to know they were in a 100 year flood plain and protect their assets. Another case of “running from responsibility.” Hope the courts throw out the case and send a message that business owners and executives need to know their property locations, along with the their business.
We recently had an insured who had to get flood insurance. He was unaware that he was in a 100 year flood plain until he when for a loan to expand his current building. The mortgage company had to get the flood certificate for us.
A businessowner of this size would have to know their in a flood plain. Obviously, they are looking for the deep pocket theory and ultimately an agent’s E & O will be sucked into the vacuum.
Hopefully, most of the loss will be assumed by the businessowner since their CFO was not prudent enough to recognize the exposure.
You are all correct, BUT I served as an Expert Witness for an agent under very similar circumstances a year or two ago, and his E & O did pay quite a few dollars to the insured. There was no mortgagee.
Bottom line is the AGENT is the professional here. IF they actually did not suggest the flood coverage, it is the fault of the agent.
If we as agents want to remain viable and not get flushed down the toilet of irrelevance in today’s market, we have to take our profession seriously and accept the boons and the banes that brings.
If a doctor fails to stitch an incision, it is the fault of the doctor, not the patient, although the patient probably knows that an incision should be stitched closed.
Nick
Wake up Agents! You hate to write flood insurance but you MUST make the insured decline coverages in writing, to protect your E&O. Always offer Flood!
So we end up with one policy in the file and 146 sign-off sheets for all of the other various types of insurance possible for this account that we advised they buy and they either declined to purchase it from us or purchased it from another source (and we still should have a sign-off for the coverage they purchased elsewhere to protect our butts once again) Isn’t this industry grand ?
So when does the insured take responsibility for his own life, business and coverages? The anology about the doctor is comparing apples to watermelons. Yes we are professionals, however before the insured buys anything it is his resposibility to educate himself on what he needs.
This defense of “He didn’t tell me” to avoid the resposibility of not reading his own policy or purchasing the coverages he should know he needs, is getting asinine. E & O should only be used for what it was designed for- mistakes. Mistakes in typing, mistakes in listings of coverages, or omissions of fees. Not as a scapegoat for an insured for the failure to take responsibility of his own insurance unto himself. Come on- when are people going to take some responsibility for their own screw ups and ignorance.
An agent should offer NFIP flood coverage to everyone in a participating community. Roughly, a quarter of all flood losses occur in areas that are not designated
“hazardous” by the Army Corp of Engineers. That being said, the NFIP policy excludes business interruption, the maximum limit for a commercial building is 500,000 on the building and 500,000 on the contents, and the loss settlement is depreciated. The beverage company may get some compensation but will it even equal their legal costs?
Do not assume or make insureds responsible for reading their policies. They do not and are not, and many professional agents and attorneys can’t understand the policies. Why make an insured responsibkle for knowing they are in a Special Flood Hazard Area? Most agents don’t know which zone their insureds are in. To suggest that agents shouldn’t be held responsible for errors such as not identifying an exposure and telling an insured that coverage is available is inane. Did the CNA policy provide any flood coverage? Virtually all standard property forms exclude flood damage and CNA’s policy would afford coverage only by way of a CNS-specific endorsement. True that no B.I. coverage is available from NFIA. As an expert witness in over 1,350 cases, I’ve seen it all – from both sides.
It’s pretty easy to point the finger elsewhere especially if there is financial gain involved. Chances are that the company would have self-insured the flood coverage judging from the premiums they are already paying. If there is a mortgagee or loss payee and it happens to be a Federally licensed Bank then some responsibility lies there as well. No doubt the agency should have offered the coverage as long as they knew where the property was located, but it should be a shared responsibility between the agent and insured.
Granted, the agency in this case should know the area in which they sell and as a courtesy and somewhat as a duty, inform the customer that they should consider Flood Ins. But, it is beyond me how a company with considerable assets as well as resources would not have researched the location in which they decided to build a wherehouse. This to me puts more of the onus on the beverage company than the agency. This lawsuit, in my mind, is a feable attempt to avoid responsibility for a major screw up.
So when does the insured take responsibility for his own life, business and coverages? The anology about the doctor is comparing apples to watermelons. Yes we are professionals, however before the insured buys anything it is his resposibility to educate himself on what he needs.
The more the insured learns and knows, the less relevant we become and the more directr writers will emerge as the norm.
I try to educate my insureds, but I do that to show them that I am on their side. I am the knowledgeable person, I do not expect them to take the time to know our industry, or keep up with the ever changing landscape.
We are the professionals. The doctor example is no watermelon…we go to the doctor for advice that we do not have or may not understand.
Nick
Would you buy a million doller house without looking into whether or not it’s in a flood zone? It’s people like you that are fueling the responsibility flight in this country.
I assume it is my post, but will refrain from rebutting until I know for sure.
Nick
It’s people like you that are fueling the responsibility flight in this country.
One comment:
The fact that an agent would be appauled about not suggesting coverage to an insured (ie…our job) seems to me to be a case of responsibility flight.
Nick
Nick- you mentioned the failure of a doctor to stitch up a patient; that is an after effect, one would have hoped before you go under the knife that you would have gotten a second opinion. The insured should have educated himself on what types of coverages he would need to avoid a loss- of any kind, and checked with another agent. One is before hand the other is after the fact- hence the apples to watermelons. I know we hate shoppers, however if it were my property yes I would have gotten a second opinion.
Most OIC sites have sections of the site designed for education consumers. So he could have gone there. Yes, help educate the insured, however where does help end and responsibilty begin?
(From JT’s response) Nick- you mentioned the failure of a doctor to stitch up a patient; that is an after effect, one would have hoped before you go under the knife that you would have gotten a second opinion. The insured should have educated himself on what types of coverages he would need to avoid a loss- of any kind, and checked with another agent.
JT: I will just say that the sale is to the operation as the non-advised coverage is to the suture.
I do think that people should strive to be more educated about what they do in life…but when it comes to such technical things, and even the sheer amount of things there is to know, we cannot expect it to happen. That is what we are here for.
We had a case at a former employer I worked for where a plumber had an Employee Dishonesty situation, to the tune of $40,000. He did not have coverage. Fortunately for us, we had documentation that we offered it to him. He bought the coverage after the fact. Now, one strategy to avoid any suits such as the “Beverage Company” scenario is to choose a client base that IS educated and savvy enough to work WITH us.
I just feel that if we as agents project an aire of indifference to a situation such as the article presents, we are in danger of making our industry irrelevant. I feel that the independent agency system is in danger, what with the internet and the capabilities this offers companies to go direct. Geico is a concern on the P/L side, since they are so successful in practice and especially in marketing.
I know C/L agents have a stronger foothold, but I have seen solicitations from my bank offering C/L coverages. I just feel that we need to take our trade more seriously. I have seen many agents, and I do not think anyone here fits this description, that have an attitude of ‘coasting’ to retirement. The talent pool in the independent agency system, again from what I have seen, is not very deep either. I worked with someone who failed the licensing test 5 times…but is still going to try until passing. Many others I have seen come and go never had any experience with insurance aside from purchasing a policy (let alone reading one).
The sad truth is that in a case such as this, it is our job to secure the protections our clients need. We are the advisor.
Armando, If insureds should not be responsible for reading their policies, then why should we waste time and money sending them one? I don’t believe any agent is willing to take on the responsiblity of making sure that ALL of their insureds know everything that they are exposed to, I am not suggesting that agents should not try to educate insureds, but we can not be held responsible for clients that should have known better, such as this case. It is sad if the agent did not get a signed release for flood coverage, but it is also 99% sure that the insured would have rejected the coverage simply due to cost and lack of adequate coverage provided by it. A mutli million dollar company with a large facility, and possible financing ( NOT SURE) I think there is more blame to throw around than just the agent. The CEO, CFO of the company itself and who ever brokered the purchase of the property could also have a little mud thrown at them. Armando I wander if your auto insurance agent has ever asked you about what your profession is, and did they offer you a quote for your business exposure or how about Work Comp? If not, with the right lawyer and your opinions, you could get rich. I am sure that even as an EXPERT WITNESS, I could find gaps in your coverage that are important and necessary. Who is to blame if you are not covered properly? Clearly you don’t think you should be held accountable to read your policy as a consumer. You might be good, But I hope your not one of my customers, I don’t need any more irresponsible customers. Don’t even try to suggest you are responsible, I am sure you have a policy, but have said it should not be your responsiblity to read it, attitudes like that breed problems. Why not buy a bare bones stripped policy and simply suggest that is what your agent offered so he is to blame for not selling you absolutely everything available. In my years in the industry, I have never ever had a client buy everything I suggested they buy. Should I refuse to insure at all, as I am aware they are not properly covered? I can just see the endorsement to my E&O (only provides coverage for claims that result from full coverage all risk policy transactions that leave no gaps in coverage to allow exposure to E&O claims)
Again the fact is that agents must protect themselves against lawyers first and then help protect the insured if time allows. excuse me I have just discovered 63 new disclosures and releases I need to design to protect myself against the very people that I sell to, who should not be held accountable for any decisions they make about life. Thank God we do get signed releases on all policies we sell, but did I forget to offer the customer coverage for the sky falling? I hope I’m covered for that. Oh Wait, I’m an insured on my E&O policy, I don’t have to read it, I will just sue the agent that sold it to me, they should have offered me more coverage than they sold me, I’m sure of it. I did not sign any releases or declination of coverages when I took out the coverage, so I’m good to go.
Bravo- very well said
It’s not right…but the truth!