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 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 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 business  For example, The New York State Insurance Department Circular Letter No 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 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; 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 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