1. 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!

2. 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

3. 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 Americas 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

4. Rick Morgan Linkedin.rickmorganconsulting Facebook/rickmorganconsulting Twitter.com/rickjmiv rick@rickmorganconsulting.com

5. 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 firms Insurance Agents and Brokers Errors and Omissions Practice Sub-Group within the firms 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

6. Sabrena Sally Sabrena_Sally@swissre.com Sabrena Sally is a Senior Vice President of Swiss Reinsurance Corporation. As the leader of Swiss Res 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.

7. Jeff Yates Executive Director Agents Council for Technology, IIABA Jeff.yates@iiaba.net linkedin.com/jeffyatesACT

8. 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

9. 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

10. 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 agencys normal business workflows and how to communicate this to customers. Social contact to prospect General insurance topics to specific topics of individual or business

11. 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 agencys 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.

12. 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.

13. Misrepresentation/ Incorrect Advice Example: Agent offers advice on co-insurance during blog exchange – someone sues alleging incorrect advice Venue doesnt matter – Best Practice remains the same Email Chat Room Blog Twitter Phone Call Same Best Practice

14. Misrepresentation/ Incorrect Advice Risk Management Key: Establish clear agency direction on when to take off-line Document in Agencys social media policy, and be certain communicated to all agency personnel Post appropriate disclaimers wherever technology permits

15. 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

16. Negligent Referral Risk Management Key: Best Practice: Dont recommend or link If you must, then at minimum provide two vendor names/choices Obtain prior written permission from vendor

17. Business Defamation and Trade Libel Simply stated – business defamation is a false statement about a business, its products or services, that interferes with the companys business relations through damaging or derogatory remarks that cause its customers to look elsewhere

18. Business Defamation and Trade Libel Hypothetical: In an effort to be competitive, an insurance agent blogs that ABC insurance company doesnt pay claims, or Gets lured into this type of discussion by seemingly agreeing with another blogger that public adjusters inflate claims

19. Business Defamation and Trade Libel - Continued We predict an increase in defamation claims arising out of an agents or brokers 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

20. 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

21. 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.

22. 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

23. 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

24. Only allow reputable third party information to be posted Agency should have a written social media policy for issuing retractions or corrections Exposure for Defamatory Third Party Information you Post to your Blog or your Website

25. 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

26. 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)

27. Release of Personally Identifiable Information Risk Management Key Best Practice: Agencys 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)

28. 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 agencys banner and hyperlink on the trade associations website? Is that considered advertising? Is it permissible? Depends on the laws of the state the agency does business in

29. 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.

30. 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-licensees website, it must be labeled as an advertisement And it cannot contain any endorsements from the non-licensee

31. 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.

32. 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.

33. 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 agencys normal workflow. Where possible, use disclaimers on agencys 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.

34. 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.

35. Creating a Social Media Policy See ACTs Creating a Social Web Policy for Your independent Agency at www.iiaba.net/act at the Websites & Social Media quick linkwww.iiaba.net/act Sample agency policies & recorded webinar See also Agency E&O Considerations When Using Social Media by Sabrena Sally on the same page ACTs 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

36. 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 agencys communications policy with prospects & clients for agency business

37. 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

38. Conclusion/ Disclaimer Follow up email; ACT contactjeff.yates@iiaba.netcontactjeff.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.