October 29, 2012 by C Acunto

VOLUME 123, NUMBER 18 / October 29, 2012

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October 29, 2012

CONTENTS

[LETTERS] RE: Ed Higgins Article Dear Steve, I read with great interest the article on Ed Higgins with regard to his experiences with GEICO's and Progressive's method of attracting business on the Internet. I applaud Ed for his courage for stepping forward knowing that he would subject himself and his business to possible negative consequences. It is only with the hard work, knowledge and courage of people like this that the public is ultimately better served. I have many times contacted these two companies to obtain quotes either on the Internet or over the phone. My purpose was simply to gain knowledge with regard to the experiences that the insurance buying public is having when dealing with very aggressive sales oriented companies. Whenever I have obtained quotes for myself or my family, I have always been truthful with regard to my profession and intention of obtaining the quotes. My experiences were troubling to say the least. In my "experiments", I have found one of two things. First, quotes are often given based on the hard work and years of study and experience of Independent Agents. In other words, the quotes are based on the coverage on the customers existing coverage which has many times been set up after a consult with a knowledgeable and caring agent, not based on any advice that the direct writing company gives. In fact when I questioned why I may need increased limits, OBEL or increased UM coverage, I was consistently given erroneous information. I'm not sure if this was intentional in order to promote lower limits or just pure ignorance. More troubling however is when I obtained quotes over the Internet. The coverage defaulted to these lower limits and were obviously done to keep the cost down and I suspect to keep the companies loss ratio down as well. It is my understanding that the courts hold an agent to a higher standard than a direct writing company. This obviously does not speak well to serve the needs of theAlthough insurance is often viewed as a commodity from some of the buying public, it is up to the regulators in our state to protect the buying public. What was most disheartening was the apparent lack of concern over the buying public from these NY regulators. continued on page 4

[ COVER STO RY ]

[DE PA RTMENTS] Letters ..................................................................................................................3 Foreword............................................................................................................ 4 Insight, By Peter H. Bickford ...............................................................................6 On the Level, By N. Stephen Ruchman ..........................................................10 Guest Opinion, By Michael Johnston, JD..........................................................8 News Notes ..............................................................................................16, 18 Face to Face, By Michael Loguercio ...............................................................26 Courtside, By Lawrence N. Rogak ...................................................................31 Classiﬁeds.........................................................................................................35 Looking Back...................................................................................................36 Last Word, By Sari Gabay-Raﬁy, Esq. ..............................................................38

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[ FORE WORD ]

Steve Acunto

Better than a PR Campaign….

continued from page 3

Although as Ed put it, "independent agents need to recognize that we are clearly engaged in a market share war with direct writers", what is more troubling is the lack of concern with protecting the public against unconscionable tactics in the name of business. Insurance is no more a commodity than health care is. After all, we are all licensed to do business in this state to protect the financial health of our clients. Any regulators, companies or anyone else that would lead you to believe otherwise is totally misguided. The playing field will be leveled when the buying public is put first. The survival of the agency system depends on it. The protection of the client depends on it as well. As my father, Ed Lucie, who was very successful and well know in this business used to say, "the foundation of our business is based on trust". Ultimately it cannot survive without this. This should be our battle cry. Not more sales at any cost Sincerely, Thomas M. Lucie, CPCU 4 October 29, 2012 / INSURANCE ADVOCATE

VOLUME 123, NUMBER 18 OCTOBER 29, 2012

here is no better image maker for the insurance industry than its performance in the wake of a catastrophic event. Hurricane Sandy was just such an event here in the Northeast. Interestingly, on the very day the storm attacked the tri-state area, there were at least two major insurance agent events scheduled: the Down State Council on Long Island and the PIA RAP in Tarrytown. Each was canceled for obvious reasons, including the importance of that time period for agents to deal with their insureds’ claims and inquiries. From accounts that I have gleaned early on after the storm hit, the industry did pretty well. It has been said often, but perhaps not often enough, that this kind of service is the best public relations available to independent agents and brokers. Answering machines and 800 numbers in Borneo don't do it. We hope each of our readers prevailed favorably over the adversities the storm and its implications presented……. In this issue, we present a feature on PRI, one of the leading medical professional liability insurers in the US on the occasion of its 30th anniversary. We have followed the progress of this company for much of its 30 years and find it to be in increasingly strong condition and enjoying greater acceptability among its client medical doctors and hospital facilities. The company's management and streamlined delivery systems, now housed in its new Roslyn, New York headquarters augurs a good future for PRI, among the very few reciprocals in the field that has succeeded on the premise that it was created, operated and designed to benefit the very doctors who founded it 30 years ago.[IA]

[LETTERS]

RE: Fred Perrotta I read of Fred Perrotta’s passing in the fine acknowledgement by Peter Bickford which appeared in the Insurance Advocate. Fred was great. When I was Counsel to the NY Assembly Insurance Committee or First Deputy of the NY Insurance Department I met with Fred many times. Fred was always well balanced and recognized the necessary balance between the regulatory needs and his client’s needs. Obviously his time in State service as well as his exemplary time in the Insurance Dept. honed those skills. When I left State service I always said to myself that I wanted to emulate Fred. And I tried to do so. I always said to myself “how would Fred handle this?” Fred was great. A great approach to finding solutions that satisfied all parties. I was so sorry to learn of his passing. He was a great friend. Several years ago I was having my home in Atlantic Beach renovated and I was installing a fireplace and my general contractor hired a subcontractor “Prada” to do the work. continued on page 8

EDITOR & PUBLISHER Steve Acunto, 914-966-3180, x110 sa@cinn.com CONTRIBUTING EDITOR Peter Molinaro CONTRIBUTORS Peter H. Bickford Jamie Deapo Michael Loguercio Sari Gabay-Raﬁy Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog, 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x126 circulation@cinn.com PUBLISHED BY CINN Group, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 President and CEO Steve Acunto

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[ INSIGHT ]

By Peter H. Bickford

A Primer For Agencies: Understanding the Arbitration Clause

rbitration has been the preferred method of dispute resolution in the reinsurance arena for decades and has grown into quite its own industry, including the development and standardization of forms and procedures, and a pro-

the same merchant class, the process generally protects both sides equally. It is this level playing field that has provided the basis for the success of arbitration between insurers and reinsurers. However, arbitration as a means of resolving disputes

The most obvious disparity between the insurance agency/manager and the insurance company is economic. With few exceptions, the company has far greater resources to bring to bear on a dispute than its appointed agencies and managers.

Peter H. Bickford

liferation of law firms, consultants and other service providers specializing in reinsurance arbitrations, and of “certified” or “qualified” arbitrators (I confess to being one of those “certified” reinsurance arbitrators!). Although the process has had to deal with issues raised by its own growth, the reinsurance arbitration process has proven over the years to be a successful alternative to litigation. In part because of this success, insurers have been including arbitration clauses in their standard agency and program management contracts as the exclusive method of resolving contractual disputes. However, while arbitration can be an effective dispute resolution process for reinsurance disputes, it can be fraught with danger for unsuspecting agencies, MGAs, MGUs and other program managers. In an excellent 2004 article on the history of arbitration, “Arbitration and Insurance Without the Common Law,” economist and former NY superintendent of insurance Dick Stewart points out that arbitration works best between parties of the same merchant class, such as insurance company versus reinsurance company. However, arbitration does not work as well between parties of a different class, such as insurance company versus agency or program manager. In reinsurance disputes, where the parties are considered to be of 6 October 29, 2012 / INSURANCE ADVOCATE

between insurers and agencies/managers is an imperfect solution tilted decidedly toward the insurer. The most obvious disparity between the insurance agency/manager and the insurance company is economic. With few exceptions, the company has far greater resources to bring to bear on a dispute than its appointed agencies and managers. This economic disparity, however, would be present in any forum for resolving disputes, including litigation, so it is understandable that most agencies or managers would consider arbitration the smarter and safer alternative to litigation because of the perceived benefits of time and cost of arbitration over litigation. But there are other more subtle differences and prejudices in the system as it exists today, and these differences should be recognized and considered by the agency/manager community. Among these differences are: • Arbitration clauses in use today are, for the most part, recycled reinsurance forms that do not recognize the differences between reinsurance and agency/manager relationships; • The rules of conduct of arbitration proceedings -- including such things as audits, discovery, confidentiality, and the like -- have evolved substantially from reinsurance disputes; • The available community of arbitrators

is composed primarily of insurance and reinsurance company experts with very little experience with or knowledge of agency/manager operations, practices and expectations; and • The lawyers, consultants and other service providers supporting the arbitration process are substantially insurer or reinsurer oriented because that is where the work is found. Given this background, the main issue for agencies asked or required to accept an arbitration clause is to make sure that it provides a reasonable method for the selection of a panel with knowledge of and experience with agency business, and that the process called for in the clause will not be unduly burdensome. The arbitration clauses found in most agency/manager agreements are modeled on clauses that have evolved in the reinsurance business over the past several decades, and the vast majority of them provide that arbitrators must be current or retired executives of insurance or reinsurance companies. The boilerplate from the reinsurance world, including the arbitrator qualification provision, keeps appearing unchanged in carriers’ standard agency, MGA or similar agreements. The selection of arbitrators qualified to consider the unique issues involved in agency/manager disputes with carriers is one of -- if not the most -- crucial events in the process. While most experienced arbitrators will decline to serve as an arbitrator on issues for which they have limited experience or pre-set positions, the danger is with the “expert” arbitrators who – through ignorance or hubris, or both – believe they know everything about everything. Because panel awards generally do not have to be reasoned, and because the grounds for overturning arbitration awards in court are very limited, it is remarkably easy for a panel to hide a prejudicial or improper award behind the screen of “unreasoned” awards, limited ability to challenge, and confidentiality. Typical reinsurance disputes, even where continued on page 8

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[ INSIGHT ] continued from page 6

large sums are at stake, are generally not a life or death proposition for companies or their reinsurers. For agencies or program managers, however, the loss of a dispute with a carrier can be far more consequential, and often can mean the difference between success and failure of its business. At the very least, agencies/managers need to make sure that the arbitration provision in their agreements with insurers

allows for the appointment of active or former executives of brokerage firms, agencies, managing general agents and program managers as well as insurers. But until there is a substantial pool of potential arbitrators with knowledge and understanding of agency/manager operations, agencies and managers remain at a distinct disadvantage even with a change in the boilerplate. In the meantime, agencies/managers, separately and through their trade organizations, need to educate their brethren on

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…agencies/managers need to make sure that the arbitration provision in their agreements with insurers allows for the appointment of active or former executives of brokerage firms, agencies, managing general agents and program managers as well as insurers. the shortcomings of the arbitration process; to take joint and concerted actions to expand the pool of qualified and available arbitrators knowledgeable on agency and program management issues; and to make sure that this pool is known and accessible to the agency/manager community. If the agency/manager community can develop a significant alternative pool to the predominantly reinsurance oriented pools, this development could also spur a change in attitude about the process by carriers, and increase the expertise of the supporting groups on agency issues -- including law firms, consultants and other service providers looking to the arbitration process as a significant source of their business – and go a long way in helping to change the playing field from a steep slope to at least a gentler incline. [IA]

[LETTERS] continued from page 4

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I always like to see the work being performed and engaged “Prada” in conversation. When he heard that I was a lawyer he told me that his brother was a lawyer – who turned out to be Fred. Such humble beginnings to such outstanding fame. I am saddened by Fred’s passing. I did not know his partner Michael Killorin and I would appreciate it if you could pass on to him my condolences on Fred’s passing and my thoughts of how great Fred was to everyone. Don Gabay

8 October 29, 2012 / INSURANCE ADVOCATE

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Thank you for putting your clients first r edlander

Gain and Retain Clients

INSURANCE ADVOCATE / October 29, 2012 9

[ ON THE LEVEL ]

By N. Stephen Ruchman

Note from Steve Ruchman: Readers of this column know its purpose is to voice the professional independent agents’ perspective on our industry. The following was written by PIA National President Andrew C. Harris. It’s absolutely salient and appropriate and I couldn’t have said it better myself, so I’m using this space to share his message this month. N. Stephen Ruchman

Support for the Agency System is Key to Success By Andrew C. Harris President, National Association of Professional Insurance Agents When independent insurance agencies speak about the carriers they represent, they often refer to their “carrier partners.” This is particularly appropriate, for many reasons. First, the business relationship between the agency and the carrier is one designed to be of mutual benefit. Second, revenue generated from this relationship goes to both parties. Finally, this business arrangement allows both participants to accomplish together what they cannot without each other. PIA agencies need financially sound, able and competitive insurers to meet the needs of their customers; carriers need quality, financially able independent insurance agencies to conduct the scope of business and provide the services required by insurance customers. In addition to marketing the carrier’s products, the agency processes insurance transactions, carries out the carriers’ instructions and assures that compliance obligations are met. Independent insurance agencies are truly the backbone of carriers. The success of the company and the agencies that form a company’s sales force are inextricably linked. When agents succeed so do their carrier partners, because we’re in this together. For the past several years, the insurance business has not been immune from the financial pressures affecting our entire

Administering disincentives to agents is like cutting back on advertising in response to an increasingly competitive marketplace. It makes no sense.

economy. Profit margins have been squeezed everywhere – not just by stresses in our industry, but also due to general economic conditions. Agencies have been hit by a perfect storm of falling rates, sustained economic depression of exposures, and searing competition. Taken separately, we can do fine. Put all these together and run this for five years, and you can weaken even the best run agencies. And in tough economic times, anything that weakens the agent will also weaken the carrier. It is at times like this that agents need support from their carriers, both directly and indirectly. Many carriers are offering increased compensation for lines of business where it makes sense for them to do so. Others have tried to promote growth. Some unfortunately are reducing compen-

sation to “share the burden” of catastrophe losses. Administering disincentives to agents is like cutting back on advertising in response to an increasingly competitive marketplace. It makes no sense. Maintaining or increasing incentives for a sales force is a good way to increase sales in a down market. This is especially important as agents incur additional costs in automating systems, integrating social media and enhancing web portals. PIA National always has an open door for individual carriers to discuss with us the added value that independent insurance agencies bring to the table prior to making changes that have the potential to negatively impact their agency sales forces. Such communication can foster more successful results. I urge those carriers who are supporting their business partners to continue to do so, and implore those that are looking to share the burden to look closely at the financial health of their sole distribution system. A weak sales force will yield weak results, just when our distribution channel needs to grow most! [IA] Andrew C. Harris, CIC, CPCU, CRM, ARM, AIS, of Colts Neck, N.J., is president of the National Association of Professional Insurance Agents.

N. Stephen Ruchman, CPIA, is a retired partner of B&B Coverage LLC. A past president of the Professional Insurance Agents of New York State Inc., he is an active supporter of PIANY, and has sat on, or chaired, nearly every committee including the Executive Committee and the Long Island Advisory Council and PIANY’s Political Action Committee. A graduate of Michigan State University, with a major in insurance, Ruchman is past president of the Peninsula Counseling Center and a member and past president of the Rockville Centre Chamber of Commerce board of directors. He is division chair for the Insurance Division of the United Jewish Appeal and has served on the business advisory board of The First National Bank of Long Island. He can be reached via e-mail at SRuchman@aol.com . 10 October 29, 2012 / INSURANCE ADVOCATE

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[ GUEST OPINION ]

By Michael Johnston, JD, Johnston Legal Group

Conﬂict of Settlement

Damned if You Settle and Damned if You Don't

mediator in Texas has a motto…A closed ﬁle is a happy ﬁle. The purpose of claim representatives and legal professionals is to effectively resolve disputes in a reasonable and cost efficient manner. Ordinarily, the anxiety level rises when a decision is made not to settle a case, but instead proceed to trial. This paper focuses on the conflicts of settlement that a

text, there is generally an affirmative duty on behalf of the insurance carrier to settle with the policyholder for the insured amount of loss. A failure to settle a first party property claim can form the basis of statutory and common law liability. Moreover, there can be an affirmative duty to settle in the third party context as well. The question then arises as to whether

Another interesting scenario arises when a claimant extends a reasonable offer to settle that is above the policy limits. Can the insurance carrier insist that the settlement be accepted and that the policyholder pay the excess amount?

Michael Johnston

liability insurance company might face. The discussion will involve both first party, third party and subrogation claims.

Is there a Duty to Settle? In a third party liability context, there is ordinarily no duty on the part of an insurance company to settle. However, most states impose a duty to reasonably consider settlement when there is an unconditional demand that is within the policy liability limits. In other words, a liability insurance carrier may be held liable for any excess judgment if it unreasonably declines a settlement demand that is within policy limits. While there is ordinarily no duty on the part of an insurance company to settle a subrogation claim, in a first party con-

an insurance company can be exposed to liability when it proceeds to settle a third party, first party or subrogation claim. If the insurance company settles, it generally wipes out the counter-claim. However, the policyholder might insist that a settlement demand not be accepted and instead force the liability insurance carrier to trial in hopes that there will be a no liability verdict on the direct action and a recovery on the counter-claim. Professional liability claims are especially difficult because the professional reputation of the insured is at stake, so they will insist a settlement demand not be accepted. Anything short of a defense verdict harms the professional’s reputation in the community and affects his/her insurability in the future. Many medical liability

policies contain a “consent to settle” clause that gives the insured the right to refuse a settlement demand and proceed to trial. Outside of medical liability policies, it is rare to see consent to settle clauses. The question arises as to whether the liability insurance carrier exposes itself to suit if it settles a professional liability claim without the consent of the policyholder.

Can the Insurance Carrier Insist that the Settlement Offer be Accepted? Another interesting scenario arises when a claimant extends a reasonable offer to settle that is above the policy limits. Can the insurance carrier insist that the settlement be accepted and that the policyholder pay the excess amount? Some liability policies provide that the insurance carrier can, under these circumstances, tender its limits and then withdraw its defense. A real dilemma arises if the policy does not give the insurance company the right to tender its limits and then withdraw its defense. The general rule is that the duty to defend is separate and independent from the duty to indemnify. Therefore, even if there is a small liability limit, an insurance company may end up spending more in defense than it has in liability exposure. Under that scenario, the question arises as to whether the insurance company can force a settlement that is in excess of the policy limits. Subrogation cases present their own unique brand of misery. Often, there is a significant uninsured interest. When a settlement offer is made that is less than the total amount of the damages, a conflict will

Marketing Reimbursement Program: Up to $500 Available. www.iiabny.org/TrustedChoice 12 October 29, 2012 / INSURANCE ADVOCATE

continued on page 14

ADVERTORIAL

Using Checklists to Limit Your Errors & Omissions Exposure AS A PROFESSIONAL INSURANCE AGENT, your clients look to you for advice on the proper coverage they need to protect their business and personal assets. It is part of your job to provide them with the information they need in order to make an educated decision. It is also your job to protect your own errors & omissions (E&O) exposure. One of the ways to do this is through the use of checklists, both for new business and renewals. Regular review of your clients’ portfolios provides the personal connection not available through an online insurance carrier. Understanding and explaining the importance of a complete review of your clients’ exposures and coverage needs is a sign of the professional insurance agent. Insurance professionals spend a lot of time creating proposals and reviewing coverages and exposures for their clients. Unfortunately, at times, clients may have selective memories. After they suffer a loss that is not covered, they may not remember that you had in fact offered the proper coverage. Many an insured has claimed that they would have bought the coverage at any price if they had known about it. Having a signed checklist provides important documentation should there be a lawsuit that could impact your E&O. Checklists should be completed and signed by the client, showing that they have been offered the coverage and either have declined or accepted. Examples of coverages that should be addressed with every client include Equipment Breakdown, Umbrella/Excess Liability, Flood, Replacement Cost on Contents, Scheduled Articles and Uninsured/Underinsured Motorists. Equipment Breakdown – Virtually every client has an exposure that can be met by this coverage. In the past, “boiler and machinery” or even “mechanical breakdown” were sometimes deceptive terms. Clients and even some agents did not understand the scope of the coverage. Equipment breakdown coverage is

not just for boilers or machinery – it can come in handy wherever something is run by electricity: phone systems, computers, and other machinery. Even the Global Positioning System (GPS) on a farm tractor can be covered under an equipment breakdown policy. Coverage is available for commercial and personal lines clients. Excess/Umbrella Liability – In the past five years, insurance industry statistics show that nearly 1 in 10 businesses has suffered a liability loss of $5 million or more. Judgments in excess of $10 million are seen quite often. Umbrella or excess liability provides increased limits, as well as potentially covering exposures that are not included in the underlying policy. How much liability coverage is enough? That is a question that should be answered by the client, and not the agent. Even when the companies you represent do not offer higher limits, there are excess and surplus lines markets that can provide the coverage. It is also important that the client understand the type of “umbrella” they have or are being offered. Excess liability policies are more limited and may not provide coverage for all of the client’s exposures. Flood – Recent weather events have shown that historical “flood maps” may not always be sufficient to determine whether there is a risk of flood at a given location. Floods can happen anywhere. It is also a common misconception that flood insurance is only available in flood hazard areas. In a similar vein, water and sump backup are commonly excluded, but coverage is readily available. Replacement Cost on Contents – Building coverage is commonly written on replacement cost basis, but this is not always the case for personal property/contents. Coverage is available and should be offered. Scheduled Articles – Coverage for high value items is limited in most standard insurance policies. Scheduled coverage may be broader as well as elimi-

nate the deductible. This is an option the client needs to know about. Uninsured/Underinsured Motorists Limits – These should be equal to the limits provided for Bodily Injury and Property Damage. Why would anyone want to provide higher limits to others than they are eligible to collect themselves? A good example of the importance of increased uninsured/underinsured limits is the August 2012 Progressive/Kaitlynn Fisher case that exploded on the Internet. (Joan Fisher et al v. Ronald Kevin Hope III) Writing a new piece of business, or renewing existing policies, is just the start. Ongoing communication with your client and regular review of their exposures is critical to maintaining a long-term relationship. Using checklists provides essential documentation of the process. Educating your clients and offering the best portfolio of coverage is another value added service of the true insurance professional.

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[ GUEST OPINION ] continued from page 12

arise as to whether to accept the settlement proposal. The insurance company may wish to settle and the policyholder may insist upon going to trial in an effort to obtain a judgment for the entire amount of the damages, both insured and uninsured. Typically, the insured is entitled to reimbursement of his uninsured damages before any monies are distributed to the insurance company. However, significant disputes arise as to the amount of uninsured damages. This is especially true when there could be a recovery for intangible items such as mental anguish, pain and suffering, etc. Disputes as to subrogation settlements can be resolved if, prior to filing a lawsuit, the insured and the company reach a â&#x20AC;&#x153;pro rataâ&#x20AC;? agreement. Under a pro rata agreement, a ratio is agreed to that reflects the percentage of insured loss and the percentage of uninsured loss. Then, any recovery is divided accordingly. Of course, if the recovery is 100 percent of the claim, the insured and the insurance company will have a 100 percent recovery. However, if the recovery is less than the amount of the claim, the pro rata agreement will dictate the percentage that each party is entitled to. The pro rata agreement should also specify how disagreements are handled as to whether to settle for less than the total amount of the claim. Of course, it is preferable that the process for making that decision is not structured so as to leave the possibility of a stalemate. With a pro rata agreement in place, the likelihood of disputes as to settlement of subrogation cases is greatly reduced. Many plaintiff attorneys believe that making an offer within policy limits forces the liability insurance carrier to either accept a demand that would otherwise be unreasonable to possible exposure that exceeds the policy limits. Many claim representatives also have this same impression. The question arises as to whether there ever is a scenario where a liability insurance carrier can decline a policy limits settlement demand and not create exposure above the liability limits. Typically, an insurance company is exposed to excess liability limits if it unreasonably declines a demand that is within policy limits. Of course, this question never arises until a 14 October 29, 2012 / INSURANCE ADVOCATE

In circumstances involving primary and excess carriers, typically the primary carrier provides the defense and the excess carrier monitors the case. The challenge arises whenever there is a settlement demand that exceeds the primary limits, but which is within the excess limits.

policy limit demand is rejected; the case goes to trial and there is a judgment in excess of the policy limits. The following is a suggestion as to an analysis of reasonably evaluating a demand within policy limits: 1. The likelihood of a liability finding; 2. An evaluation of damages claimed, including economic damages and intangible damages; 3. The possibility/likelihood of contributions by co-defendants or responsible third parties; 4. Other verdicts involving similar cases in the same jurisdiction; and 5. Whether the insured believes that he/she was responsible for the claimed damages. After this evaluation is conducted, we suggest that the evaluation be provided to the insured in order to receive his/her comments. The best result is if the insured directs the insurance company not to accept the settlement demand. Second best would be if the insured concurred in the decision not to accept the settlement demand. After trial, the company would have a defense predicated upon the reasonableness of its decision to decline the demand as well as the agreement/concurrence of the insured in that decision. Of course, the situation becomes more difficult if the insured does not agree/concur with the decision to deny the demand. However, if the insured does not provide any basis for a reasonable expectation that exposure would exceed the policy limits,

the insurance company still has a viable argument that its refusal to accept the settlement demand was reasonable. Sometimes there can be disagreements among insurance companies as to whether to accept a settlement. These disagreements can arise whenever there are multiple liability insurance policies that cover the same occurrence. Also, disputes can arise among primary and excess liability carriers. The most difficult scenario is when there are multiple liability carriers involved in the same suit. This is complicated even further when there are different liability limits and different policy periods. The most rational solution is for all of the carriers to enter into a Joint Defense Agreement that, to the extent possible, sets forth how the claim will be defended and how decisions as to settlement will be handled. Joint Defense Agreements should also specify the attorney to defend the case and how defense costs will be allocated. In circumstances involving primary and excess carriers, typically the primary carrier provides the defense and the excess carrier monitors the case. The challenge arises whenever there is a settlement demand that exceeds the primary limits, but which is within the excess limits. The primary carrier and the insured may wish to accept the demand and the excess carrier may wish to decline it. It is also conceivable that the excess carrier would like to accept the demand and the primary carrier and insured do not. Is it possible for the excess carrier to take over the case, accept the settlement and then sue the primary carrier and the insured? By the same token, when the primary carrier and the insured wish to accept a settlement, can the primary carrier and the insured agree to the settlement without the consent of the excess carrier? Scenarios similar to the one presented by this paper occur many times in the litigation world. In the vast majority of those cases, all of the parties involved are in agreement as to the course of action to be taken in response to a last minute settlement offer. However, the conflict looms in the background and, presents a recipe for disaster for those cases where it boils to the surface. Hopefully this paper and presentation can help focus tension and begin the discussions on solutions.[IA]

NYPIUAPOINT

ADVERTORIAL

First Year in Review Following is an interview with Dane R. Austin who was appointed President of NYPIUA in August of 2011. Q: Is the rumor true that your first day at NYPIUA coincided with Tropical Storm Irene? A: Yes. In fact, as it became evident that Irene was going to impact New York State, we moved my official start date up a week so I could be in the office on the Monday following the storm. The storm presented a perfect opportunity to gain some perspective on how NYPIUA would respond to a significant weather event. Q: What were your observations following the storm? A: Firstly, how grateful I was that Irene wasn’t a major hurricane when it hit New York! Secondly, that many of our employees were personally impacted by the storm ranging from transportation disruptions, to power outages, to damaged homes. Thirdly, that the top risk identified in NYPIUA’s ERM analysis, “Ability to Respond to a Major Catastrophe” was indeed the Number One issue.

DANE R. AUSTIN, CPUC, ARE, JOINED NEW YORK PROPERTY INSURANCE UNDERWRITING ASSOCIATION (NYPIUA) IN AUGUST 2011, AS PRESIDENT. PRIOR TO HEADING NYPIUA, DANE WAS WITH UTICA NATIONAL INSURANCE GROUP. HE SERVED AS VICE PRESIDENT, DIRECTOR OF MERGERS/ACQUISITIONS, RISK AND REINSURANCE AS WELL AS HAVING SERVED ON BOTH ITS MANAGEMENT AND OPERATING COMMITTEES. AMONG HIS POSITIONS AT UTICA NATIONAL INSURANCE GROUP WERE: RESIDUAL MARKETS MANAGER; PERSONAL LINES OPERATIONS MANAGER; AND DIRECTOR OF REINSURANCE AND POOLS. HE ALSO HELD SEVERAL SUPERVISORY/ UNDERWRITING POSITIONS, AND WAS EMPLOYED IN VARIED CORPORATE ACCOUNTING CAPACITIES. MR. AUSTIN’S PROFESSIONAL ACTIVITIES AT UTICA NATIONAL INCLUDED BEING A PANEL SPEAKER ON REINSURANCE ISSUES BEFORE THE ILLINOIS CPA SOCIETY; PARTICIPATION IN THE UTICA NATIONAL GROUP FOUNDATION; AND PARTICIPATION IN THE TRADE ASSOCIATIONS, NYIA (NEW YORK INSURANCE ASSOCIATION) AND PCI (PROPERTY AND CASUALTY INSURERS OF AMERICA). IN ADDITION, DANE SERVED AS CHAIR OF THE NEW YORK AUTOMOBILE INSURANCE PLAN, AND WAS VICE CHAIR OF NYPIUA PRIOR TO BECOMING ITS PRESIDENT.

Q: What are the major challenges facing the Association? A: The two most significant challenges are: Number 1, by a wide margin, becoming fully prepared to handle losses emanating from a major hurricane given our coastal exposure. Also, as mentioned a minute ago, we have a very experienced staff. We’ve begun to lose some of that experience to retirement, which creates the second greatest challenge– succession planning. Succession planning has been addressed by a combination of internal development and new hires of some wonderfully talented people. Q: Given NYPIUA’s role as a market of last resort, what steps have been taken to raise its visibility in working with your public? A: Thanks to some excellent leadership at the Board level and a dedicated management team, NYPIUA has established a good working relationship with the Department of Financial Services, key legislators, and producer groups. We’ve met with those various groups to continue and expand the dialogue, to ensure that NYPIUA fulfills its mission with excellence.

Q: What are some of the other observations of NYPIUA over the course of your first year? A: The professionalism, dedication and AUSTIN HAS A B.A. FROM SUNY COLLEGE OF TECHNOLexperience level of NYPIUA’s employ- MR. OGY, AND AN ASSOCIATES IN APPLIED SCIENCE FROM MOees are impressive. Some of our HAWK VALLEY COMMUNITY COLLEGE. HE HAS SERVED IN employees have been here for over LEADERSHIP ROLES FOR SEVERAL NON-PROFIT, COMMUNITY ORGANIZATIONS. forty years. There is a “can do” atti- MR. AUSTIN AND HIS WIFE, KATHLEEN, HAVE BEEN MARRIED Q: It sounds like, overall, your first year has been interesting. tude at NYPIUA that would be the 34 YEARS AND HAVE THREE DAUGHTERS, NICOLE, ERIN AND MEGAN. envy of any manager! I have also A: Yes, to say the least! I am fortunate been impressed with the commitment to work with such a great group of people level of our Board of Directors. They are engaged in the and am confident we’ll meet the challenges set before us. operation and supportive of our efforts to address various challenges. INSURANCE ADVOCATE / October 29, 2012 15

[ NEWS NOTES ]

Combined Insurance Uses Brainshark Video to Train Mobile Sales Force

ALTHAM, Mass.—Brainshark, Inc., the leader in online and mobile video presentations, has announced that Combined Insurance, a leading provider of individual supple-

mental insurance products, has improved the effectiveness and timeliness of its mobile sales force training through Brainshark. Combined Insurance uses Brainshark to create mobile-ready video

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training courses quickly and deliver them to agents throughout the United States. A leading provider of supplemental insurance, including accident, disability, health and life insurance products, Combined Insurance delivers services and solutions that help protect families across the globe. With operations throughout North America, Europe and the Pacific, the company is structured so its sales agents spend most of their time in the field – making mobile communications a critical way to dispense training information. Prior to using Brainshark, Combined Insurance was limited to physical classroom training sessions and mailing CDs and thumb drives to deliver training course materials to its mobile sales force. Because these were arduous processes, the company needed to find a way to improve both training accessibility and impact. By recording videos in-house and choosing Brainshark, Combined Insurance is now able to effectively create and distribute its video training courses – enabling its sales force to view the content either at a computer or on-the-go from nearly any mobile device. Since choosing Brainshark, Combined Insurance reports seeing a number of benefits, including: • Increase in engagement – With up to a 100 percent completion rate of its video training courses. • Increase in feedback – Learners are providing 10 times more feedback than before, helping the training and marketing departments improve and tailor the training courses to better serve the sales force. • Ease-of-use and self-paced learning – Salespeople have access to training courses presented in a visual manner that appeals to them, with the ability to rewind and re-watch courses at their convenience. • Tracking capabilities – Brainshark’s tracking analytics provide Combined Insurance with valuable insight into who has completed the courses, how they scored on quizzes and if any follow-up is needed. • Ease of content production – Combined Insurance has also created continued on page 18

16 October 29, 2012 / INSURANCE ADVOCATE

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INSURANCE ADVOCATE / October 29, 2012 17

[ NEWS NOTES ] continued from page 16

more than 500 pieces of training content for its sales force to date, with dozens more in development. “Brainshark has significantly increased the completion rate of our video training courses because it has provided us with an effective distribution method to reach our remote and mobile sales force like never before,” said Michael Helton, special projects coordinator of technology and training at Combined Insurance. “Delivering timely content to our salespeople is essential, and by using Brainshark, we’re able to deliver our content quickly, track completion of our courses and provide the necessary follow-up, which has impacted our training success immensely.” Joe Gustafson, Brainshark’s CEO, added: “Informal, mobile learning is of growing importance to many businesses, and the need for sales teams to access content anytime, anywhere and on any device provides a competitive advantage. We applaud Combined Insurance for being a model company that is effectively using mobile technology to bring productivity and efficiency benefits to its geographically dispersed sales force.” [IA]

First Niagara Makes Top 50 U.S. Broker List

UFFALO, N.Y.—First Niagara Risk Management, Inc., (FNRM) the wholly-owned insurance subsidiary of First Niagara Bank and its parent company, First Niagara Financial Group, Inc. (NASDAQ:FNFG) moved into the 43rd spot among the 100 largest agencies and brokerages in the U.S. according to the most recent rankings from Business Insurance Magazine. First Niagara Risk Management, moved up from 47th place, based on increased revenue of $64 million, which was up by 40% from 2010 to 2011. “We’ve consistently moved up in the industry rankings since we broke into the top 100 brokerages six years ago, and we continue to enhance the range and sophistication of First Niagara Risk Management’s products and services to match the increasingly complex needs of our growing client base,” explained First Niagara Risk Management Managing Director Kirk Jensen. First Niagara Risk Management is part of First Niagara Bank, N.A., a multi-state community-oriented bank with 430 branches, approximately $36 billion in assets, $28 billion in deposits, and

[FNRM] moved into the 43rd spot among the 100 largest agencies and brokerages in the U.S. according to the most recent rankings from Business Insurance Magazine. approximately 6,000 employees. The company provides financial services to individuals, families and businesses throughout the United States. First Niagara Risk Management has an employee base of more than 400 professionals, with 10 offices across the Northeast. FNRM, distinguished as a “Best Practices Agency” is one of the top 50 largest business insurance brokers, and a nationally recognized leader in business solutions that include personal and commercial insurance, surety bonds, risk management, employee benefits and administration and life, disability and longterm care coverage. [IA]

PIANY Awards Ryan for Distinguished Insurance Service

LENMONT, N.Y.—The Professional Insurance Agents of New York State Inc. will present Kevin Ryan, CIC, CPIA, with its Distinguished Insurance Service award when its annual Hudson Valley Regional Awareness Program is rescheduled, following postponement due to Hurricane Sandy. The award is presented to individuals in the insurance industry who have a history of significant contributions and support to the regional insurance community. “With this award, PIANY honors Kevin for his long-standing commitment to the insurance industry,” said Michael Skeele, CIC, CPIA, president of PIANY. “The award also commemorates his dedication and hard work, as well as his loyalty to our industry. Kevin’s professionalism is to be admired and respected.” Ryan is president and chief executive of18 October 29, 2012 / INSURANCE ADVOCATE

ficer of The Valley Group Inc., Kingston, N.Y. A PIANY member since 1976, Ryan served as president of the association in 2009-10; president-elect in 2008-09 and first vice president in 2007-08. Currently, he is a member of the Company/Industry Relations, Nominations and Government Affairs Committees. Ryan also is a member of the PIANY Political Action Committee and is an ex-officio member of PIANY’s Kingston Advisory Council. Throughout his presidency and beyond, Ryan worked tirelessly to represent New York’s producer community in meetings and discussions with the NY Insurance Department stating PIANY’s opposition to and seeking clarification of the state’s compensation disclosure regulation, according to the Association. In 2011, Ryan was named PIANY’s Professional Agent of the Year. This award is

given to an agent who has demonstrated excellence and achievement in insurance marketing and service; has shown a personal commitment to professionalism; and has contributed to PIA and the community. In 2005, Ryan was named Committee Chair of the Year by PIANY for his time and effort guiding the association and implementing programs to benefit its members, while chair of the Government Affairs Committee. In his community, Ryan is vice chairman of the Board of Health Alliance of the Hudson Valley, an organization that resulted from the new alliance of Kingston and Benedictine Hospitals. He is a former chairman of the Benedictine Hospital and past president of the Benedictine Health Foundation board of directors. He also is a past president of the YMCA of Ulster County and a past board member of the Ulster County Chamber of Commerce. [IA]

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[ COVER ]

hysicians’ Reciprocal Insurers (PRI) marked its 30th Anniversary on Thursday, September 27, 2012, during a gala event held at the de Seversky Mansion on Long Island’s north shore. More than 100 guests were in attendance to celebrate the benchmark anniversary of the physician centered insurer, founded by medical doctors for the insuring of their colleagues and their own practices using a unique reciprocal format. Mr. Anthony J. Bonomo, Esq., CEO of Administrators for the Professions, Inc. (AFP) and Board Member of PRI, welcomed distinguished guests who included representatives of government, and the medical professions in the greater New York area. Mr. Bonomo noted that the company has stayed true to its goal of representing physicians even in the most difficult of professional liability marketplaces, with the utmost integrity and care for their protection and defense. “Physicians today are subject to unreasonable lawsuits and subject to great demands upon their professional skills. They deserve what our physician-centered company provides, that is, a bedrock resource to which they can turn for the protection of their practice and their professional conduct. We are proud to represent more than twelve thousand physicians and their

“[Physicians] deserve what our physiciancentered company provides.…” – Anthony J. Bonomo, Esq., CEO, Administrators for the Professions, Inc. (AFP), Board Member of PRI

medical practices and many hospitals and medical facilities in the Greater New York area,” he stated. Physicians’ Reciprocal Insurers founded in 1982 is unique in the world of insuring inasmuch as it is a reciprocal format, that is, a format that serves its customers first and has a Board of Directors consisting of medical doctors who operate the reciprocal for mutual benefit. The Company is based in its new national headquarters in Roslyn, Long Island at 1800 Northern Boulevard. It employs 350 and has underwriting professionals and facilities all over New York State.

Photos continued on next page

INSURANCE ADVOCATE / October 29, 2012 21

[ COVER ]

ANTHONY J. BONOMO, ESQ., CEO, ADMINISTRATORS FOR THE PROFESSIONS, INC. (AFP) AND BOARD MEMBER OF PHYSICIANS’ RECIPROCAL INSURERS (PRI) WITH GERALD DOLMAN, ESQ., PRESIDENT, AFP AND BOARD MEMBER, PRI

TUCKER GREEN WITH THE HONORABLE KATHLEEN RICE, DA OF NASSAU COUNTY

(L-R) JEANNE H. BRAUN. EXECUTIVE VICE PRESIDENT, HOSPITALS & SPECIAL PROGRAMS, PRI WITH AL FARINA, FORMER CFO OF SOUND SHORE MEDICAL CENTER, AND JOAN CAMERA, NJS CONSULTANTS

DR. BARRY SCHWARTZ, BOARD MEMBER, PRI, WITH HIS WIFE, JANICE SCHWARTZ

22 October 29, 2012 / INSURANCE ADVOCATE

ALAN KOPMAN, CEO OF NY WESTCHESTER SQUARE MEDICAL CENTER

CARL BONOMO, E.V.P., AFP AND BOARD MEMBER, PRI (L) WITH ANTHONY J. BONOMO, ESQ. AND THE HONORABLE ALFONSE D’AMATO

STEVE ACUNTO, PRESIDENT & CEO, CINN WORLDWIDE GROUP (L) WITH GREG SERIO OF PARK STRATEGIES AND FORMER NEW YORK STATE SUPERINTENDENT OF INSURANCE

[ COVER ]

ATTORNEY MARC TRACT

L-R: MICHAEL SCHOPPMAN, ESQ., KERN AUGUSTINE CONROY & SCHOPPMAN, PC; LYNN JENNINGS TAYLOR, CATHOLIC HEALTH SERVICES OF LONG ISLAND; WES MERRITT, PRESIDENT OF PA/PRI

MERRITT FABEL, TRUSTEE OF CATHOLIC HEALTH SERVICES

EDWARD DIGIOA, GENATT ASSOCIATES, INC.

L-R: CAROLE HAARMANN ACUNTO, ANTHONY J. BONOMO, ESQ., CARL BONOMO, AND THE HONORABLE KATHLEEN RICE

CARL BONOMO (L), NYS SENATOR ERIC ADAMS AND ANTHONY J. BONOMO, ESQ.

ANTHONY J. BONOMO, ESQ. (L); MICHAEL MERLO, EXEC. VP OF SIGNATURE BANK AND SENATOR AL D’AMATO (SECOND FROM RIGHT) INSURANCE ADVOCATE / October 29, 2012 23

[ COVER ]

BERNARD MCARTHUR, CTO OF AFP AND GERALDINE DONOHUE, DIRECTOR, RISK EDUCATION DEPARTMENT OF AFP

ANTHONY J. BONOMO, ESQ. ADDRESSES THE GUEST

CARL BONOMO WITH SENATOR KEMP HANNON

24 October 29, 2012 / INSURANCE ADVOCATE

DR. LARRY EISENSTEIN, COUNTY EXECUTIVE OFFICE WITH ANTHONY J. BONOMO, ESQ.

MICHAEL SCHOPPMAN, ESQ., KERN AUGUSTINE CONROY & SCHOPPMAN, PC, WITH CHRISTOPHER CURCIO, VP MARKETING, AFP AND ROBERT PARRINELLI, PRESIDENT OF GROUP DATA

ANTHONY J. BONOMO, ESQ. WITH THE HONORABLE THOMAS GULOTTA

MICHAEL AMANTE, PERFORMER

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[ FACE TO FAC E ]

By Michael Loguercio

“5 Days From Hell”

nce again I am sitting on a US Airways flight, travelling to Dallas, TX for our annual EZLynx sales meetings. It’s always an enjoyable time, getting to visit with “our gang”, learning about new products, and sharing ways to improve the technological experience for all those involved in this

you see it all: death, destruction, fires, floods, thefts, assaults, accidents…you name it and an insurance agent has seen it, and has also most likely handed someone a check to help ease some of the emotional pain that they have endured. But this one seemed to be among a few of the most difficult natural events in our lifetime to

There were also many other subtle signs that a disaster had occurred, such as when you look towards the sky not a plane was to be seen… except for an occasional military or police helicopter, C 130, or News media chopper, … eerily reminiscent of the days following September 11th. Michael Loguercio

thing of ours that enjoy the technology that we provide to the insurance industry. However, leaving home early this morning (quite frankly feeling a little guilty for leaving our town, knowing that so many people are still in need), was surreally different than how I usually leave the friendly confines of my home for a business trip, because today is Saturday, November 3rd, 2012 and after kissing Ann Marie good bye I also said good bye to our dear relatives (and their little dog, too) who have been staying with us this past week due to Hurricane Sandy and the wrath of death and destruction that followed in her path throughout the Northeast. Our guests, who are a few among the millions of people who have been devastated by this Hurricane/Cyclone /Nor’easter/tropical storm/low pressure/ left-turning major “PIA” of a storm (and I am NOT referring to “PIA” as in the “Professional Insurance Agents”) were fortunate, thank God, to escape with their lives, but lost so many of their possessions that they treasured, including their home and a new car, as so many others did as well…including many of our readers of this column. You know that being in this industry, 26 October 29, 2012 / INSURANCE ADVOCATE

deal with. I feel that way because although my immediate family and I were unbelievably fortunate enough to not be within the 90% of Long Islanders who lost power for any extended amount of time (all we lost was internet access and landline telephones for a week, intermittent electrical power loss, and to make or receive a cellular call we had to walk down the block, stand in the middle of the street, lift our left leg, and touch our nose to get a signal).

However, when we were able to receive or send a cell phone call or text, it was always the same reply: some dear friend or relative was on the other end of the message or call, literally crying because they lost everything…some even including a loved one or two. The stories were horrific: families running full speed up a flight of stairs to escape rapidly rising flood waters, while their entire first floor floats up behind them, as though the contents were chasing them up the stairs. Families having to be rescued by emergency service responders in boats and choppers. I was told multiple times by many victims of their incredible stories of how their family had to race down the street because a wall of water 25 feet high was on its way towards the beach. A very dear friend of ours (and also to many of us in this industry) not only lost his current home and all of its contents, but also lost the home that he and his family were closing on next week! He was just thankful that he, his wife, and their baby were able to escape alive. To add further insult to injury, those fortunate enough to have not lost their home and to have generators to run their household, or whose vehicles were not swept away by the floods, then lost the ability to obtain fuel for their engines as gas stations who had fuel were unable to open, stations who could open rapidly ran

[ FAC E TO FACE ] out of fuel within hours of opening, and all because the ports were closed, refineries had no power to accept or distribute the fuel (or were destroyed), bridges, tunnels and roads were closed, blocked by debris such as fallen trees, live wires, and contents of homes, so basically fuel deliveries were not being made so the end consumer simply ran out of gas and could not replenish it. Cash machines were inoperable, as is the ability for many stores to accept credit or debit, as those methods of payment were also impossible to facilitate. Oh, and if you were one of the unfortunate who lost a vehicle? Good luck trying to find a rental car. There were also many other subtle signs that a disaster had occurred, such as when you look towards the sky not a plane was to be seen…except for an occasional military or police helicopter, C 130, or News media chopper, …eerily reminiscent of the days following September 11th. With all of the devastation around us, the heartwarming stories continue as well, also bringing tears to one’s eye, but tears of joy as opposed to tears of sadness, as you hear of people opening their homes to strangers for a place to take a hot shower, or have a home cooked meal. One house that I walked by had extension cords laid down the length of their driveway, with a huge sign that read, “Please feel free to charge any device you like.” Another friend of mine set up their RV on their driveway, with a sign that read, “We have power, please use this RV for anything you wish.” During the storm a very large tree fell across one of my neighbor’s front yard and across the street stretching from one side to the other. When I walked over to help him clear it the next morning, it was gone…just about a half hour after I saw it from our bedroom window. Amazed, I asked him how he removed it so quickly, and he replied that a pickup truck with a couple of young guys drove by, jumped out, and using chain saws cut it up and cleared the road, saying they were concerned that emergency vehicles would be unable to get by in the event they were needed to save one of our neighbors. Others in my neighborhood got together and collected food, blankets, water, candy, anything that they could from anyone who was kind enough to give, and distributed it to families without the

From an economic stand point, Insured losses (and I emphasize the word “insured”) were already estimated two days ago at over $11 billion, with estimates of total losses somewhere in the $50 billion range, once it’s all said and done. Future economic losses will certainly exceed the current number, and will last far into the future as we attempt to measure the true loss that we will endure.

ability to cook themselves or keep warm as the chilly night air set in and their heat and electric were both out. Our local supermarket made up food boxes and sold them at cost to those who would buy one. Once you paid for it, the supermarket workers would then take the boxes to areas affected and distribute them to those in need. The Red Cross activated many schools as shelters, and placed on standby many other facilities in the event the toll of those displaced grew more than the capacity of the current shelters. Donations poured in to the shelters, and even EZLynx, the wonderful company that I am proud to be a part of, donated a very large sum of money to the Red Cross in our area to help defer some of the operating costs of these shelters. These stories of love for one another go on and on as well, and I am so proud to live in a place where people care about those whom they don’t even know. However, with this said, there are still a few lowlife deadbeat A-hole losers who need to find a way to scam people in times like this…such as the gas stations charging in upwards of $6.00 a gallon for fuel that they had in the ground from last week before the storm even hit; or the convenience store in a Nassau County town that

was charging $9.00 for a bag of ice; or the dirt-bag skells that posed as utility workers to gain entry to homes without power, only to rob them of what wasn’t already destroyed. These horror stories continue, and will continue to do so for many months to come. As of this writing our schools are still closed, along with so many stores and gas stations. Almost a million homes on Long Island, and another million in New Jersey are without power, as are thousands upon thousands of homes and apartments still dark in the City of New York, which by the way still has some tunnels that serve vehicles and trains closed because engineers are still pondering ways to pump water from them. Bridges are intermittently being opened and closed for pedestrian and vehicular traffic, and non-commercial cars who wish to enter Manhattan better have 3 people in them or you are going to be turned away by New York City’s finest. On my way to the airport this morning, at 0500 hrs., there were already lines of cars a mile long at some gas stations, waiting patiently for the station to open…in hopes that these stations even have gas available to sell. Schools are appealing to the State Education Department to waive the mandatory 180 days of instruction rule, as they have already lost all of our their snow days (it hasn’t even snowed), and are now cutting into vacation days. Not to mention the days that will still be lost as many schools are still without power, or essential services, or have been damaged by the storm, or have impassable roads. Some school buses cannot traverse their normally traveled paths to carry the kids safely to school, and who even knows if these same buses will be able to obtain fuel to even get them running…that is of course if they have not been destroyed in the storm themselves. From an economic stand point, Insured losses (and I emphasize the word “insured”) were already estimated two days ago at over $11 billion, with estimates of total losses somewhere in the $50 billion range, once it’s all said and done. Future economic losses will certainly exceed the current number, and will last far into the future as we attempt to measure the true loss that we will endure. For example, casinos on the devastated continued on page 30

INSURANCE ADVOCATE / October 29, 2012 27

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[ FAC E TO FAC E ] continued from page 27

Atlantic City Boardwalk are losing $5 million a day in revenue, as so many other businesses are affected with precisely the same types of lost revenues. God knows what the actual loss figure will be, and much of it won’t even be known for many months, or even years, to come. I would be remiss if I didn’t take a moment here to thank all of the rescue

workers, police departments, military personnel, and civilians, who are still out there risking their own lives to save and help others. To the store owners who are distributing free baby food and milk to families who have children, to the Lion’s Clubs, Rotary Clubs, VFW’s, Knights of Columbus’, Churches, Synagogues, Mosques, and all those who are collecting and distributing food, life essentials, shelter, and hugs to those who need it. To the insurance agents

and carriers who have remained open all hours of the night, and some even by candlelight, to process claims in order to help strangers rebuild their lives as quickly as possible. To the local and federal elected officials who reached across the aisle in a true spirit of caring in order to get the funding to clean up the mess and to reopen the ports by relieving some of the bureaucratic paperwork requirements in order to get the fuel carrying barges to port. Last but not least, I thank everyone across the globe for the prayers and thoughts that were sent to us all, to get each and every one of us through this disaster and emerge from it mentally stronger than last Monday night. I think my son Devin put this in perspective when he said, “Dad, we’re New Yorkers. We’re resilient, and we will persevere.” Thank you, son, very well said. Stay strong, everyone, be safe and God bless. Ciao for now. [IA] Michael Loguercio is the Regional Sales Manager for EZLynx; and active Past President of the Young Insurance Professionals of New York State. He is a current ACT/AUGIE, Professional Insurance Agents of New York State, Independent Insurance Agents and Brokers of New York State, and Council of Insurance Brokers of Greater New York committee member. In 2010 Michael was honored with the NY-YIP/PIA Insurance Professional of the Year award; and in 2012 with a NYYIP/PIA Lifetime Achievement award. Michael is also Chair of the 2013 Professional Insurance Agents Regional Awareness Program on Long Island. In his community, Michael is President of the Longwood Central School District Board of Education on Long Island, NY; is a Director on the board of REFIT NY (Reform Educational Financing Inequities) and is a member of The Middle Island, NY, Rotary Club and Central Brookhaven Lion’s Club. Michael is a regular Contributor to the Insurance Advocate since 2008, and may be contacted at 631-345-9359 or michael.loguercio@ezlynx.com.You may also follow him on Twitter @MLoguercioJr; and on Facebook @ Michael Anthony Loguercio Jr.

30 October 29, 2012 / INSURANCE ADVOCATE

By Lawrence N. Rogak

[ COURTSID E ]

Landlord's Hallway Camera Catches Hubby with Female Visitor; Lawsuit for Prima Facie Tort Survives Dismissal Otero V Houston St. Owners Corp. I. BACKGROUND Plaintiffs sue to recover damages for invasion of privacy from defendants' installation of cameras on premises where plaintiffs were tenants. Defendants Chaim Babad and Houston Street Owners Corp. owned and defendants Babad Management Co. and Houston Street Management Co. managed the premises. Defendants move to dismiss the complaint on the grounds of a documentary defense and failure to state a claim. C.P.L.R. ยง 3211(a)(1) and (7). The court grants defendants' motion to the extent set forth and for the reasons explained below.

The court may dismiss a complaint where documentary evidence utterly refutes plaintiffs' allegations and conclusively establishes a defense as a matter of law.

II. PLAINTIFFS' CLAIMS Plaintiffs allege that defendants' installation of a camera near plaintiffs' apartment entrance invaded their privacy and caused damages based on several theories. Defendants claim that plaintiffs lacked a reasonable expectation of privacy in the hallway accessible to the public and that the camera recorded only the hallway outside the apartment, as a device to determine who in fact resided in the apartment. A. Applicable Standards The court may dismiss a complaint where documentary evidence utterly refutes plaintiffs' allegations and conclusively establishes a defense as a matter of law. Goldman v. Metropolitan Life Ins. Co., 5 NY3d 561, 571 (2005); Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 (2002); 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 152 (2002); McCully v. Jersey Partners, Inc., 60 AD3d 562 (1st Dep't 2009). Upon defendants' motion to dismiss claims pursuant to C.P.L.R. ยง 3211(a)(1) or (7), the court may not rely on facts alleged by defendant to defeat the claims unless the evidence demonstrates the absence of any significant

dispute regarding those facts and completely negates the allegations against defendants. Lawrence v. Graubard Miller, 11 NY3d 588, 595 (2008); Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d at 326; Leon v. Martinez, 84 NY2d 83, 87-88 (1994); Yoshiharu Igarashi v. Shohaku Higashi, 289 AD2d 128 (1st Dep't 2001). The court must accept the complaint's allegations as true, liberally construe them, and draw all reasonable inferences in plaintiffs' favor. Nonnon v. City of New York, 9 NY3d 825, 827 (2007); Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d at 326; Harris v. IG Greenpoint Corp., 72 AD3d 608, 609 (1st Dep't 2010); Vig v. New York Hairspray Co., L.P., 67 AD3d 140, 144-45 (1st Dep't 2009). In short, the court may dismiss a claim based on C.P.L.R. ยง 3211(a)(7) only if the allegations completely fail to state a claim. Leon v. Martinez, 84 NY2d at 88; Harris v. IG Greenpoint Corp., 72 AD3d at 609; Frank v. Daimler Chrysler Corp., 292 AD2d 118, 121 (1st Dep't 2002); Scott v. Bell Atl. Corp., 282 AD2d 180, 183 (1st Dep't 2001).

B. Intentional Infliction of Emotional Distress To establish plaintiffs' claim of intentional infliction of emotional distress, plaintiffs must show (1) defendants engaged in extreme and outrageous conduct, (2) with intent to cause or in disregard of a substantial probability that the conduct would cause severe emotional distress, (3) a causal connection between defendants' acts and plaintiffs' injury, and (4) severe emotional distress. Howell v. New York Post Co., 81 NY2d 115, 121 (1993); Suarez v. Bakalchuk, 66 AD3d 419 (1st Dep't 2009). To support the first element alone, plaintiffs must show that defendants' conduct was "beyond all possible bounds of decency" and "utterly intolerable in a civilized community." Marmelstein v. Kehillat New Hempstead: The Rav Aron Jofen Community Synagogue, 11 NY3d 15, 22-23 (2008); Howell v. New York Post Co., 81 NY2d at 122; Murphy v. American Home Prods. Corp., 58 NY2d 293, 303 (1983); Suarez v. Bakalchuk, 66 AD3d 419. Defendants' commission of a criminal offense may support a finding of outrageous conduct. See Roe v. Barad, 230 AD2d 839, 840 (2d Dep't 1996); Laurie Marie M. v. Jeffrey T.M., 159 AD2d 52, 55 (2d Dep't 1990). The New York Penal Law violation plaintiffs rely on, however, proscribes surveillance only of a "person at a place and time when such person has a reasonable expectation of privacy, without such person's knowledge or consent." N.Y Penal Law ยง 250.45(1) and (2). A legitimate expectation of privacy is a demonstrated "expectation of privacy that society recognizes as reasonable." People v. RamirezPortoreal, 88 NY2d 99, 108 (1996). The validity of an expectation of privacy continued on page 32

INSURANCE ADVOCATE / October 29, 2012 31

[ COURTSIDE ] continued from page 31

depends on the circumstances. Id. at 109. While plaintiffs' expectation of privacy in their apartment behind the closed door is reasonable, see People v. Mercado, 68 NY2d 874, 876 (1986), an expectation of privacy in the hallway is not reasonable because it is accessible to other persons. People v. Funches, 89 NY2d 1005, 1007 (1997); People v. Fabelo, 277 AD2d 130, 130-31 (1st Dep't 2000). Plaintiffs admit that the camera recorded what occurred inside their apartment only when its entrance door was open, yet contend that the camera somehow intruded on their intimate activities. Plaintiffs do not deny that it would have done so only when their entrance door was open. Plaintiffs further claim that defendants installed the camera to humiliate them to the point of vacating their rent stabilized apartment. Penal Law § 250.45(3) also prohibits surveillance without consent in specified rooms for no legitimate purpose. People v. Evans, 27 AD3d 905, 906 (3d Dep't 2006). Plaintiffs fail to allege, how-

ever, that the camera recorded any room to which the statutory prohibition applies. Therefore plaintiffs fail to show that defendants violated any of Penal Law § 250.45's provisions. Plaintiffs' allegations that defendants' camera allowed views into their apartment falls short of extreme and outrageous behavior. Even if the camera's location were considered a trespass into plaintiffs' apartment, it would not constitute atrocious, indecent, or utterly despicable conduct meeting the requirements for an intentional emotional distress claim. Howell v. New York Post Co., 81 NY2d at 126. While installation of a camera to view plaintiffs surreptitiously where they legitimately expected privacy may constitute extreme and outrageous conduct, Sawicka v. Catena, 79 AD3d 848, 849-50 (2d Dep't 2010), plaintiffs maintain no reasonable expectation of privacy in the hallway where defendants installed the camera, nor where it viewed into plaintiffs' apartment only when plaintiffs themselves opened the door. See Howell v. New York Post Co., 81 NY2d at 126. Insofar as defendants' instal-

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David Hofmann Northeast Regional Sales Executive (516) 668-1234 | dhofmann@go-premco.com | www.go-premco.com 32 October 29, 2012 / INSURANCE ADVOCATE

lation may be considered harassment under the New York Rent Stabilization Code, 9 N.Y.C.R.R. § 2525.5, the determination of whether defendants committed harassment is for the New York State Division of Housing and Community Renewal. 9 N.Y.C.R.R. § 2526.2(c)(2); Sohn v. Calderon, 78 NY2d 755, 765 (1991); Edelstein v. Farber, 27 AD3d 202 (1st Dep't 2006); Mago, LLC v. Singh, 47 AD3d 772, 773 (2d Dep't 2008). Therefore, regardless of the outcome of a hearing on service, the court grants defendants' motion to dismiss plaintiffs' claim of intentional infliction of emotional distress. C.P.L.R. § 3211(a)(7). C. Prima Facie Tort The elements of a prima facie tort are: (1) intentional infliction of harm, (2) causing special damages, (3) without justification or excuse, (4) by otherwise lawful acts. Freihofer v. Hearst Corp., 65 NY2d 135, 142-43 (1985); Curiano v. Suozzi, 63 NY2d 113, 117 (1984); Burns Jackson Miller Summit & Spitzer v. Lindner, 59 NY2d 314, 332 (1983); Posner v. Lewis, 80 AD3d 308, 312 (1st Dep't 2010). Plaintiffs must plead a "specific and measurable loss" from the tortious conduct to establish special damages. Freihofer v. Hearst Corp., 65 NY2d at 143. See Curiano v. Suozzi, 63 NY2d at 117; DeMicco Bros., Inc. v. Consolidated Edison Co. of NY, Inc., 8 AD3d 99, 100 (1st Dep't 2004); Vigoda v. DCA Prods. Plus, 293 AD2d 265, 266 (1st Dep't 2002); Havell v. Islam, 292 AD2d 210 (1st Dep't 2002). Malevolence must be the sole motivation for defendants' injurious actions. Curiano v. Suozzi, 63 NY2d at 117; Burns Jackson Miller & Spitzer v. Lindner, 59 NY2d at 333; Posner v. Lewis, 80 AD3d at 312. Plaintiffs' allegation in their complaint that defendants placed the camera to force plaintiffs and the other rent regulated tenants to leave in itself demonstrates a purpose beyond the disinterested malevolence required to sustain plaintiffs' prima facie tort claim. Havell v. Islam, 292 AD2d 210; Smukler v. 12 Lofts Realty, 156 AD2d 161, 163 (1st Dep't 1989); Rad Adv. v. United Footwear Org., 154 AD2d 309, 310 (1st Dep't 1989). Plaintiffs' affidavit opposing defendants' motion nevertheless clarifies that defendants initially installed a camera motivated by an interest in driving out tenants through surveillance of their infrequent residence, but, when the camera

[ COURTS I DE ] failed to accomplish that purpose, defendants intended their continued use solely to injure plaintiffs. Plaintiffs' affidavit alleges the requisite harm and damages in that the surveillance eventually forced them to leave the apartment and caused them marital difficulties and expenses for mental health services. The camera also compelled Jorge Otero to disclose to his wife Georgia Otero that when she was not in the apartment another woman visited, causing additional expenses for counseling and medication, and compelling Georgia Otero to resign from her job and hire an employee to replace her so she could remain at home. Plaintiffs claim $2,500.00 per month for an alternative residence, $10,000.00 per year in psychiatric expenses, and $42,000.00 per year for the employee. Thus, even though the complaint failed to plead disinterested malevolence or special damages, plaintiffs' affidavit supplements their complaint and cures those deficiencies. Sargiss v. Magarelli, 12 NY3d 527, 531 (2009); Nonnon v. City of New York, 9 NY3d at 827; Amaro v. Gani Realty Corp., 60 AD3d 491, 492 (1st Dep't 2009). D. Civil Rights Law §§ 50 and 51 Under New York law, any right to privacy derives only from New York Civil Rights Law §§ 50 and 51. Messenger v. Gruner + Jahr Print. & Publ., 94 NY2d 436, 441 (2000); Howell v. New York Post Co., 81 NY2d at 123; Freihofer v. Hearst Corp., 65 NY2d at 140. Use of a person's name, portrait, or other picture in advertising or a trade without prior written consent is a misdemeanor. NY Civ. Rights Law § 50; Messenger v. Gruner + Jahr Print. & Publ., 94 NY2d at 441; Stephano v. News Group Publs., 64 NY2d 174, 182 (1984). Persons whose name, portrait, or picture is knowingly used under circumstances that violate Civil Rights Law § 50 may recover damages for injuries sustained from that use. NY Civ. Rights Law § 51; Messenger v. Gruner + Jahr Print. & Publ., 94 NY2d at 441; Bement v. N.Y.P. Holdings, 307 AD2d 86, 89 (1st Dep't 2003); Molina v. Phoenix Sound, 297 AD2d 595, 596 (1st Dep't 2002); Hernandez v. Wyeth-Ayerst Labs., 291 AD2d 66, 69 (1st Dep't 2002). The statutes must be construed narrowly, however, limiting them to non-consensual commercial appropriations of a living per-

son's name, portrait, or picture. Messenger v. Gruner + Jahr Print. & Publ., 94 NY2d at 441; Finger v. Omni Publs. Intl., 77 NY2d 138, 141 (1990); Stephano v. News Group Publs., 64 NY2d at 183; Guerrero v. Carva, 10 AD3d at 105, 115-16 (1st Dep't 2004). To establish that defendants violated these statutes, plaintiffs thus must plead and prove defendants' (1) use of plaintiffs' picture (2) within the state of New York, (3) for purposes of advertising or trade, (4) without plaintiffs' written consent. Molina v. Phoenix Sound, 297 AD2d at 597. Plaintiffs claim defendants' use of the images captured by the camera, either to determine who resided in their apartment or to force out rent regulated tenants, was a trade purpose.While pleading a trade purpose to support plaintiffs' Civil Rights Law claim is inconsistent with pleading disinterested malevolence to support their prima facie tort claim, plaintiffs may plead alternatively. C.P.L.R. § 3014; Finkelstein v. Warner Music Group Inc., 14 AD3d 415, 416 (1st Dep't 2005). See Citi Mgt. Group, Ltd. v. Highbridge House Ogden, LLC, 45 AD3d 487 (1st Dep't 2007). Civil Rights Law §§ 50 and 51 do not define advertising or trade purposes, but advertising purposes include use of a name, portrait, or picture in a publication which, as a whole, is distributed to advertise or solicit use of a product or service. Beverley v. Choices Women's Med. Ctr., 78 NY2d 745, 751 (1991); Guerrero v. Carva, 10 AD3d at 116; Morse v. Studin, 283 AD2d 622 (2d Dep't 2001). A name, portrait, or picture is used for trade purposes if its use is to attract trade to a business entity. See Ippolito v. Lennon, 150 AD2d 300, 302-303 (1st Dep't 1989). The content of any text associated with the name, portrait, or picture, rather than a motive for pecuniary gain, determines whether the use is for trade or for excluded newsworthy purposes. Stephano v. News Group Publs., 64 NY2d at 185. See Finger v. Omni Publs. Intl., 77 NY2d at 141-42; Bement v. N.Y.P. Holdings, 307 AD2d at 90. Whether defendants actually attracted customers or profited through the publication, however, are factors showing advertising or trade purposes. Rall v. Hellman, 284 AD2d 113, 114 (1st Dep't 2001). In any event, plaintiffs allege nothing that would support an advertising or a trade purpose. Without this essential ele-

ment, they fail to sustain a claim under the Civil Rights Law.

III. CONCLUSION For the above reasons, the court grants defendants' motion to dismiss plaintiffs' claims for intentional infliction of emotional distress and for violation of New York Civil Rights Law §§ 50 and 51. C.P.L.R. § 3211(a)(7). The court denies defendants' motion to dismiss plaintiffs' remaining prima facie tort claim based on documentary evidence or a failure to state a claim for relief. C.P.L.R. § 3211(a)(1) and (7). Comment: Interesting story. It would appear that the landlord set up a surveillance camera in the hallway outside a rent stabilized apartment, perhaps to gather evidence that the apartment was not the primary residence of the tenant or that it was being put to some use that the landlord could use to legally evict the tenant. Instead, apparently, the cameras recorded the tenant-husband receiving a female guest other than his wife, which caused some domestic unrest, and -- very likely - precipitated this lawsuit. In today's world, there are surveillance cameras everywhere, mostly for security reasons, and they are allowed everywhere except in places where you have a right to privacy, like bathrooms, and inside your own apartment or home (unless you place them there yourself). All of these plaintiffs' theories of liability failed except for "prima facie tort," which is a catch-all cause of action for lawful actions that are done with bad intent and which cause actual monetary damage. If this case goes to trial, the plaintiffs are going to have to argue to a jury that the landlord put up the camera with the intent of causing some kind of harm to the plaintiffs, and that recording the female visitor's comings and goings sent the plaintiffs' marriage into an expensive tailspin. The depositions should be interesting. Beyond that, however, this decision carries some worrisome implications for all landlords with security cameras. [IA]

2012 NY Slip Op 52015(U) Decided on February 21, 2012 Supreme Court, New York County Billings, J. INSURANCE ADVOCATE / October 29, 2012 33

[ COURTSID E ]

"Earth Movement" Exclusion Which Specifically Mentions "Man Made" Events Upheld By Court of Appeals Bentoria Holdings, Inc. v Travelers Indem. Co.

n Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co. (12 NY3d 302 [2009]), we held that an "earth movement" exclusion in an insurance policy did not unambiguously apply to excavation. We now confront a policy in which a similar exclusion is expressly made applicable to "man made" movement of earth. We hold that this added language eliminates the ambiguity, and that loss caused by excavation is excluded from the policy. Travelers Indemnity Company issued to plaintiff an insurance policy covering "direct physical loss of or damage to" a building in Brooklyn. Under the heading "EXCLUSIONS," the policy said: "1.We will not pay for loss or damage

34 October 29, 2012 / INSURANCE ADVOCATE

we held that an "earth movement" exclusion in an insurance policy did not unambiguously apply to excavation.

caused directly or indirectly by any of the following. . . . **** "b.Earth Movement **** "(4) Earth sinking (other than sinkhole collapse), rising or shifting including soil

conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface; "All whether naturally occurring or due to man made or other artificial causes." The building suffered cracks as a result of an excavation being conducted on the lot next door to it. Plaintiff submitted a claim, which Travelers rejected, relying on the earth movement exclusion. Plaintiff sued for breach of the policy. Supreme Court denied Travelers' motion for summary judgment; the Appellate Division affirmed

[ COURTSID E ] (Bentoria Holdings, Inc. v Travelers Indem. Co., 84 AD3d 1135 [2d Dept 2011]), but granted leave to appeal to this Court. We now reverse. Pioneer was in most respects virtually identical to this case. The defendant there insured a building against "accidental direct physical loss"; the building suffered cracks and other damage as a result of an excavation on an adjoining lot. The defendant refused to pay, relying on an earth movement exclusion very similar to the one quoted above, with the distinction that the last words of the earth movement exclusion here — "All whether naturally occurring or due to man made or other artificial causes" — were absent in Pioneer. The plaintiff in Pioneer argued that the policy did not clearly exclude "an excavation — the intentional removal of earth by humans." We found that argument to be "reasonable," and therefore, held that the earth movement exclusion "did not unambiguously remove" excavation damage from the coverage of the policy. But the same argument is not available to plaintiff here. By expressly excluding earth movement "due to man made or artificial causes," the policy contradicts the idea that "the intentional removal of earth by humans" is not an excluded event. This policy cannot reasonably be read to cover the damage on which plaintiff 's claim is based. Accordingly, the order of the Appellate Division should be reversed, with costs, the motion of Travelers Indemnity Company for summary judgment dismissing the complaint as against it granted, and the certified question answered in the negative. Comment: Thus, for any insurer which has adopted the revised version of the earth movement exclusion, excavation or any other "artificial" cause of soil movement that causes property damage will not be covered. [IA] 2012 NY Slip Op 07141 Decided on October 25, 2012 Court of Appeals Smith, J.

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36 October 29, 2012 / INSURANCE ADVOCATE

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[ LAST WORD ]

Deer in The Headlights Deer-Vehicle Collisions Rise as Claims Near 8 Percent in Four Years

he expanding urban sprawl finds more roads being built through wildlife habitats displacing deer from their natural habitat, leading to a rise in deer-vehicle collisions, according to the Insurance Information Institute (I.I.I.). Deer migration and mating season generally runs from October through December, and causes a dramatic increase in the movement of the deer population. As a result, more deer-vehicle collisions occur in this period than at any other time of year, so drivers need to be especially vigilant, I.I.I .warns. An estimated 1.23 million deer-vehicle collisions occurred in the U.S. between July 1, 2011 and June 30, 2012, costing more than $4 billion in vehicle damage, according to State Farm statistics. Damage caused by an accident with deer or other animals is covered under the optional comprehensive portion (not the collision portion) of an automobile insurance policy. Comprehensive auto insurance includes coverage for: fire, theft, vandalism or malicious damage, riot, flood, earthquake or explosion, hail, windstorm, falling or flying objects, damage due to contact with a bird or animal, and sometimes, depending on the policy, windshield damage. The average claim for deer-vehicle collisions between July 1, 2011 and June 30, 2012 was $3,305, up 4.4 percent from the previous year with costs varying depending on the type of vehicle and severity of the damage. Over the last four years, the number of deer-related claims paid out by State Farm increased 7.9 percent, while other claims involving moving vehicles (i.e. first-party, physical damage claims not caused by weather, criminal activity or fire) declined 8.6 percent. The Insurance Institute for Highway Safety (IIHS) noted that deer-vehicle collisions in the U.S. cause about 200 fatalities annually. “Drivers should stay alert and pay particular attention to the sides of the road, especially during the hours just before dusk and just before daylight,” said Loretta Worters, vice president of the I.I.I. 38 October 29, 2012 / INSURANCE ADVOCATE

“Fortunately, there are steps your clients can take to decrease the likelihood of being involved in a deer-vehicle collision.” Agents would do well to remind clients to be aware of the following: • Deer are not just found on rural roads near wooded areas; many deer crashes occur on busy highways near cities. • Deer are unpredictable, especially when faced with glaring headlights, blowing horns and fast-moving vehicles. They often dart into traffic. • Deer often move in groups. If you see one, there are likely to be more in the vicinity. Driver precautions – communicate these to insureds: • Drive with caution when moving through deer-crossing zones, in areas known to have a large deer population and in areas where roads divide agricultural fields from forestland. • Always wear your seatbelt. The IIHS reports that in a study of fatal animal crashes, 60 percent of people killed were not wearing a seatbelt. Sixty-five percent of people killed in animal related crashes while riding motorcycles were not wearing a helmet. • When driving at night, use high beam headlights when there is no oncoming traffic. The high beams

will better illuminate the eyes of any deer on or near the roadway. • Be especially attentive from sunset to midnight and during the hours shortly before or after sunrise. These are the highest risk times for deer-vehicle collisions. • Brake firmly when you notice a deer in or near your path, but stay in your lane. Many serious crashes occur when drivers swerve to avoid a deer and hit another vehicle or lose control of their cars. • Do not rely on devices such as deer whistles, deer fences and reflectors to deter deer. These devices have not proven effective. Importantly, tell insureds that, In the event your vehicle strikes a deer, try to avoid going near or touching the animal. A frightened and wounded deer can hurt you and further injure itself. If the deer is blocking the roadway and poses a danger to other motorists, call the police immediately. And contact the agency a s a p to report the incident. [IA]

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