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Presented by Joseph D. Hampton May 21, 2013

Overview of Liability of Producers. Presented by Joseph D. Hampton May 21, 2013. Common allegations: • “I thought I had coverage but it appears that I don’t” • “I have coverage but it’s not enough”. Where coverage is the issue: • Insurer is sued • Producer is sued

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Presented by Joseph D. Hampton May 21, 2013

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  1. Overview of Liability of Producers Presented byJoseph D. Hampton May 21, 2013

  2. Common allegations: • “I thought I had coverage but it appears that I don’t” • “I have coverage but it’s not enough”

  3. Where coverage is the issue: • Insurer is sued • Producer is sued “If there is no coverage then Producer messed up.”

  4. Where the amount of coverage is the issue: • Producer is the focus of the suit • Insurer often named as vicariously liable entity

  5. Side trip: procedural context of lawsuits • 1st resolution method: summary judgment • 2nd resolution method: trial • 3rd resolution method: settlement

  6. Why is this important? Facts and disputes over them are determinative of outcomes Simple rule statements subject to exceptions (“yeah, but...”)

  7. General rule: Absent a “special relationship,” a producer owes no to duty to obtain a sufficient amount of coverage, or particular types of coverage.

  8. Corrollaries: • Insured must advise the producer of the coverages and limits he wants • Insured is in the best position to know his needs

  9. When does a “special relationship” exist? Representation by producer of specialization, and additional compensation, OR Longstanding relationship, interaction on coverage, and reliance by insured

  10. Specialist scenario: • more common with brokers than agents • more common with specialized commercial products (i.e., marine) • often involves consultation fees

  11. Longstanding relationship scenario: • 7-plus years (in caselaw) • repeat business, multiple products, meetings • historical reliance by insured on agent’s advice

  12. Cost calcuators: • explain them and imperfections • explain how they are used • GIGO – use correct data

  13. Mortgaged properties: • find out lender’s minimums • consult with insured thereafter • explain lender’s requirement for ACV, not necessarily RCV

  14. Contents coverage: • explain limitation to percent of structure value • explain availability of riders for particular properties (i.e. jewelry)

  15. Protect yourself! • explain coverage nature and limits • follow through on commitments (“I will run the estimation program,” “I will see if underwriting will up the RCV”) • DOCUMENT AND CONFIRM YOUR COMMUNICATIONS

  16. Questions?

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