Posts Tagged ‘ risk ’

Errors and Omissions (E&O) Rules Still being Written for Social Media

July 15, 2010 by admin

The topic of Errors and Omissions insurance as it relates to insurance agencies and specifically social media and technology, has been a hot one over the past few weeks.

Insurance Journal featured a comprehensive look at all risks associated with social media usage in, “The Growing Risks of Social Media,” while industry thought-leader Steve Anderson mentions E&O policies when discussing coverages needed to protect against the risk of data breaches, where personal information is stolen or made available accidentally.

To get a clear understanding of how Errors and Omissions policies are relevant to technology and social media, it’s important to first define E&O. According to BusinessDictionary.com, Errors and Omissions liability insurance is defined as:

Insurance coverage that protects professionals (such as accountants, architects, brokers, consultant, engineers, lawyers) against claims arising from their actual or perceived negligence, errors, and mistakes in the performance of service for others.

A slightly different explanation is offered on the International Risk Management Institute, Inc. (IRMC) website which defines E&O as:

An insurance form that protects the insured against liability for committing an error or omission in performance of professional duties. Generally, such policies are designed to cover financial losses rather than liability for bodily injury and property damage.

Understanding the types of coverages needed to mitigate the risk from your agency’s social media usage is not only good for your own protection, but valuable in determining how to protect business partners that are active on the social web, potentially opening up new streams for “rounding off” accounts.

Insurers have been slow to create policies that address social media usage specifically (they’re still learning how to use it). For this reason, knowledge from someone who has years of insurance and social media experience is more readily available than anything you can dig up from an insurance company. While they are few and far between, Leslie White, risk manager for SocialFish.org, wrote a groundbreaking post titled, Social Media, Liability and Insurance, in which she discusses the liabilities involved for any small business engaging on the social web.

I encourage you to read the entire piece, but in discussing Errors & Omissions coverage specifically, Ms. White states:

“Associations with extensive media activities should consider a media liability policy. However, if your association has an Errors & Omissions policy for its professional programs, the E&O policy can be modified to extend coverage for media exposures.

One advantage of a media liability policy is it can provide coverage for losses arising from the content of the publication. If the blog posting or article explains how to do or make something and someone gets hurt or suffers a financial loss, the association may be held liable. The policy can also be endorsed to cover claims arising from bodily injury or property damage arising from the content or subject matter.”

There is some gray area in defining the words “media” and “matter” so Ms. White encourages companies to make the definition as broad as possible to cover all web properties, electronic publications and even volunteers and authors.

As mentioned previously, data breaches are a concern, especially when sensitive information is available. Fortunately, most agencies will not have to worry about their websites, since the quote forms or other lead engines present only ask for very basic information. However, LOSS of data is a huge concern as operations become more digitized and CMS systems expand.

Aside from protecting data, bloggers and social media users always have to be aware of things like plagiarism, copyright infringement and defamation, which can all be easily avoided with some basic common sense training and a social media policy. Don’t badmouth the competition. Don’t steal other people’s work. Give credit where credit is due. Don’t post sensitive information about clients.

Benchmark-setting court cases and legislation is needed before a precedent can be set. Until then, it’s best to listen to the experts, formulate E&O coverages that protect your agency’s specific liabilities and apply a similar model when assessing the risks of clients active with social media and digital insurance marketing.

Since the insurance industry is playing catch-up in the social media marketing space, it may be some time before a forward-thinking insurer develops a specific coverage to address the risks faced by bloggers and social media practitioners. But when it happens, it’s likely they’ll get plenty of attention from the people it matters to most.

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Special Needs Insurance Client: Skydiving Patron/Instructor

January 22, 2010 by admin

Falling out of aircraft is risky behavior. One malfunction can permanently affect the ability to keep working or breathing, yet thrill-seekers flock in droves to plunge in the name of extremeness for what some consider the ultimate rush.

The tethered novice is making a choice to jump, absolving the instructor of all fault with a signed release. But liability aside, what sort of coverage would a life or health insurance policy provide if additional expenses, or worse, resulted from jumping? The answer, it’s best to ask an independent agent.

If a policy already exists, it depends on whether the individual was actively planning to start skydiving when it was signed. If jumping was unplanned, the policy should cover fully, if not, it’s worth investigating. And if you don’t have health or life insurance, it’s probably a good idea to take up lawn bowling.

As for the instructor, personal accident insurance is a good idea. For his or her business, many independent agents offer outdoor insurance for activities such as whitewater rafting while others specialize in sports, either would be a good source of information about accident insurance, general liability insurance, directors and officers liability and other extreme coverage issues.

The video below shows another risk associated with skydiving, one that is completely unforeseen (and quite hilarious). It’s only 23 seconds, watch to the end, it’s worth it…

How do you write that claim? Skydiver enthusiasts are a growing community with special needs the can best be met by an independent agent. Whether they will find you depends on online insurance marketing efforts and whether you’re able to be found.