Agency E&O Considerations
when Social Networking
ACT Webinar Presented By:
David Hulcher, Assistant Vice President, Agency E&O
Risk Management, Big I Advantage
Rick Morgan, Chair, ACT Social Web WG
Colleen M. Murphy, Esq., Partner, Goldberg Segalla
LLP
Sabrena Sally, Senior Vice President, Swiss
Reinsurance Corporation
Jeff Yates, ACT Executive Director
The webinar will start shortly!
Agency E&O Considerations
when Social Networking
ACT Webinar Presented By:
David Hulcher, Assistant Vice President, Agency E&O
Risk Management, Big I Advantage
Rick Morgan, Chair, ACT Social Web WG
Colleen M. Murphy, Esq., Partner, Goldberg Segalla
LLP
Sabrena Sally, Senior Vice President, Swiss
Reinsurance Corporation
Jeff Yates, ACT Executive Director
David Hulcher
David Hulcher is AVP of Agency Professional Liability Risk
Management for the Big “I” Professional Liability Program. In
November of 1997, he joined the Independent Insurance
Agents and Brokers of America’s for-profit subsidiary, Big “I”
Advantage Inc. with primary responsibility for the management
and marketing of the Big “I” Professional Liability Program. He
is now focused on enhancing the risk management activities for
the Program including the development of risk management
information and tools to assist agents not only avoid E&O
claims but improve their business practices and procedures in
general.
Email Address: David.Hulcher@iiaba.net
Rick Morgan
Linkedin.rickmorganconsulting
Facebook/rickmorganconsulting
Twitter.com/rickjmiv
rick@rickmorganconsulting.com
Colleen M. Murphy
Colleen M. Murphy, Esq. is a partner with the firm Goldberg
Segalla LLP, which has 10 offices throughout New York, New
Jersey, Pennsylvania and Connecticut. Ms. Murphy chairs the
firm’s Insurance Agents and Brokers Errors and Omissions
Practice Sub-Group within the firm’s Professional Liability
Practice Group. Since 1992, she has nearly exclusively
confined her practice to the defense of insurance agencies and
brokerages in errors and omissions claims and lawsuits as well
as in consumer complaints and hearings before the New York
State Insurance Department.
http://www.linkedin.com/in/colleenmmurphy1
Sabrena Sally
 Sabrena_Sally@swissre.com

Sabrena Sally is a Senior Vice President
of Swiss Reinsurance Corporation. As the
leader of Swiss Re’s Insurance Agents
and Brokers Professional Liability
program in the United States, Sabrena is
responsible for the insurance agency
errors and omissions program endorsed
by the Independent Insurance Agents
and Brokers of America. The IIABA
program has been in place with Swiss Re
for over twenty years.
Jeff Yates
Executive Director
Agents Council for Technology, IIABA
Jeff.yates@iiaba.net
linkedin.com/jeffyatesACT
E&O & Social Media
 Social media networking is expanding the
ways that insurance agents and brokers do
business
 This merits an examination of the likely
E&O risks flowing from use of social media
 E&O loss control techniques to neutralize
the exposures
 Predictive – E&O claims and/or
regulatory claims have not yet been
made to our knowledge
Major E&O Risks from Use of Social
Media
 General E&O risk management tips from
use of social media; Risks that result from
taking advice/transactions out of normal
agency processes
 Incorrect advice; misrepresentation of
policy terms
 Negligent referrals
 Business defamation; trade libel
 Posting private consumer information on
the social web
 Advertising liability
General E&O Risk Management
Tips
 Step one is have a social media policy guide
that all employees understand and adhere to.
 Employees should know when to move from
social web and into the agency’s normal
business workflows and how to communicate
this to customers.
 Social contact to prospect
 General insurance topics to specific topics of
individual or business
General E&O Risk Management
Tips



Use standard disclaimers where possible such as:
 “The ABC Agency cannot bind or alter coverages or
accept reported claims via social networking.
Further, the information provided is intended for
general situations and questions relating to specific
coverage should be discussed using the agency’s
regular workflows. Please contact a licensed agent
directly.”
Establish with the customer upfront how your agency does
business including who and how the customer should
contact you for their specific needs.
If customer activity does occur through a social media
platform it should be documented in the agency
management system.
Potential Errors Without a Good
Social Media Policy:
 Example: Social networking account
used to communicate answers on
customer applications.
 Example: Customer notifies agency of a
claim via a social networking account.
 Example: Customer requests via social
networking account  a change in coverage or limit;
 an additional insured be added;
 a certificate of insurance be issued.
Misrepresentation/ Incorrect Advice
Example: Agent offers advice on co-insurance
during blog exchange – someone sues
alleging incorrect advice
 Venue doesn’t matter – Best Practice
remains the same
Email
Chat Room
Blog
Twitter
Phone Call
Same Best Practice
Misrepresentation/ Incorrect Advice
Risk Management Key:
 Establish clear agency direction on when
to take “off-line”
 Document in Agency’s social media
policy, and be certain communicated to
all agency personnel
 Post appropriate disclaimers wherever
technology permits
Negligent Referral
Example: Agency blog lists or links to a
vendor name for a wellness service
provider, tax preparation service, or
other services
Exposure: Allegation of damages resulting
from inadequate services and that
agency was negligent in making the
referral
Negligent Referral
Risk Management Key:
 Best Practice: Don’t recommend or link
 If you must, then at minimum provide
two vendor names/choices
 Obtain prior written permission from
vendor
Business Defamation
and Trade Libel
 Simply stated – business defamation
is a false statement about a business,
its products or services,
 that interferes with the company’s
business relations through damaging
or derogatory remarks that cause its
customers to look elsewhere
Business Defamation
and Trade Libel
 Hypothetical:
 In an effort to be competitive , an
insurance agent blogs that “ABC
insurance company doesn’t pay
claims”, or
 Gets lured into this type of discussion
by seemingly agreeing with another
blogger that public adjusters inflate
claims
Business Defamation
and Trade Libel - Continued
 We predict an increase in defamation claims arising
out of an agent’s or broker’s use of social media
 Why? Information is transmitted instantly and can be
redistributed
 Can remain on the “Social Web” forever
 Social networking encourages more casual discussion
Business Defamation
and Trade Libel - Continued
 These casual conversations move very quickly
on social networking sites using:
 Abbreviations;
 Nicknames; and
 Slang.
 Results in misinterpretations and
miscommunications
Business Defamation and Trade Libel E&O
Loss Control Techniques - Continued
 Have a written social media policy that
mandates agency employees to refrain from
making statements on the social web that
competitors might find unflattering
 Employees should keep comments positive
 Employee sites should make clear they reflect
their own views and not those of the agency
 State the consequences of non-compliance.
Exposure for Defamatory Third
Party Information you Post to your
Blog or your Website
 Posting insurance industry articles and/or
providing a topical news feed to your
targeted customers.
 Potential exposure for posting an article
which contains defamatory information.
 Section 230 of the Communications Decency
Act provides some protection from liability for
“information providers” but not “content
providers”
Exposure for Defamatory Third
Party Information you Post to your
Blog or your Website
 Adding your own commentary to a
third party post can move your
website or blog from being an
“information provider” to a “content
provider” under Section 230
Exposure for Defamatory Third
Party Information you Post to your
Blog or your Website
 Only allow reputable third party
information to be posted
 Agency should have a written social
media policy for issuing retractions or
corrections
Release of Personally Identifiable
Information
Personally identifiable information is defined as:
“Information which has been provided for a specific
purpose by an individual and which the individual can
reasonably expect will not be made public”

Telephone number, address, date of birth, insurance score,
drivers license number and social security number are
examples of private information
Release of Personally Identifiable
Information
Example: During blog exchange, someone posts
to agent a file containing PII. Blog is not
encrypted, information is intercepted and
identity theft ensues.
 Exposure is high:
 Third Party Liability (may or may not be insured)
 First Party Liability fines/penalties (not insured)
Release of Personally Identifiable
Information
Risk Management Key
 Best Practice: Agency’s written Social Media policy
& security plan should clearly state that no PII is to
be posted or transmitted via social networking
 Post appropriate disclaimer and Privacy statements
where the technology permits
 Anywhere PII is collected:
 Comply with state and federal laws & regs
 If no applicable regulations, then encryption
and firewalls & security plan (ACT is an
excellent resource)
Advertising Liability/Use of Social
Media
 One reason insurance agents and brokers
use social media is to promote “branding”
 What if an agency is asked by a trade
association to put the agency’s banner and
hyperlink on the trade association’s
website?
 Is that considered advertising? Is it
permissible?
 Depends on the laws of the state the
agency does business in
Advertising Liability/Use of Social
Media
 Agents must comply with advertising
regulations governing the State in which
they are licensed and do business
 For example, The New York State
Insurance Department Circular Letter
No. 5 2001, provides guidance for New
York licensees who advertise on the
web.
Advertising Liability/Use of Social
Media
 Based upon this circular letter, it
appears that, if a N. Y. agency places
its banner and/or a hypertext link on
a non-licensee’s website, it must be
labeled as an “advertisement”
 And it cannot contain any
endorsements from the non-licensee
Advertising Liability/Use of Social
Media
 When an individual agency owner or
employee uses the agency name, logo, or
other advertising identifier as part of their
personal social networking site does that
then constitute advertising for which the
agency must follow state advertising laws &
regs?
 That question has yet to be settled.
Advertising Liability/Use of Social
Media
 Loss Control Tips:
 Be sure your agency advertising on
the site complies with all statutory
and regulatory guidelines.
 Use a written social media policy
addressing employee linking to
agency sites or use of agency name,
logo, or other advertising on their
personal social networking sites.
Summary of E&O Risk Management Tips
 Establish an appropriate social web policy customized for
you needs which incorporates other agency policies and
workflows; train employees; audit for compliance
 Employees should know when to move from the social
web to the agency’s normal workflow.
 Where possible, use disclaimers on agency’s posts,
blogs, and tweets similar to those used in voicemails,
emails, faxes, and websites.
 Focus comments on issues and not individuals and
organizations; keep comments accurate, truthful,
positive and professional.
Summary of E&O Risk Management Tips
 Employees’ sites should make clear they
reflect their own views and not those of
the agency.
 Personally identifiable information
should not be put on the social web.
 The same vetting process for review of
advertising materials should be used
when dealing with social media sites.
Creating a Social Media Policy
 See ACT’s “Creating a Social Web Policy for Your
independent Agency” at www.iiaba.net/act at the
“Websites & Social Media” quick link
 Sample agency policies & recorded webinar
 See also “Agency E&O Considerations When Using Social
Media” by Sabrena Sally on the same page
 ACT’s Policy guide provides key steps to take to
formulate an agency policy; a check list of provisions
to consider for your policy; & a social web code of
conduct
Reiterating a Few of Key Points in
Policy Guide
 Employees need to stay positive; use common
sense
 What employees do on their personal social
media can reflect on the agency
 Do not recommend individuals or businesses
 Do not refer to customers or employees
without permission; do not include any
personally identifiable information
 Employees need to know escalation procedure
if they become aware of potential problems
 Make clear the agency’s communications policy
with prospects & clients for agency business
Conclusion
 Social Media may be a wonderful tool
for your agency or brokerage
 Implement, with the help of qualified
legal counsel and other professionals
a written Social Media Policy, so that
you may use Social Media wisely
Conclusion/ Disclaimer
 Follow up email; ACT contact—jeff.yates@iiaba.net
 This webinar is intended only for educational or
illustrative purposes and should not be construed to
communicate legal or professional advice.
 You should consult legal or other professionals with
respect to any specific questions you may have.
 Further, the statements and/or opinions contained are
those only of the webinar presenters/ authors and do
not constitute and should not be construed to
constitute any statement, legal advice, opinion or
position of Goldberg Segalla, LLP, ACT, IIABA, and/or
Swiss Re.