Countryside Cooperative's anhydrous ammonia tank leaked. William was exposed to the ammonia and sued Countryside for his injuries. Countryside had a Commercial General Liability policy with Michigan Millers Mutual Insurance Company and a pollution legal liability policy with American International Specialty Lines Insurance Company (AISLIC).

Harry A. Koch was the AISLIC broker. When they received the timely notice from Countryside in November 2004, they did not send it to the carrier. Koch actually held the suit information until February 14, which was after the policy's extended reporting period had expired. AISLIC denied coverage, following the policy's terms.

Michigan Millers defended the case and paid William $900,000. Countryside and Michigan Millers then sued Koch for $478,327 to cover the amount of the loss that AISLIC would have paid if coverage had applied.

Koch took a "no harm, no foul approach." The Michigan Millers policy paid William's injury in full. As a result, Countryside did not sustain any real injury and Michigan Millers paid exactly what its policy should pay.

Why should Koch have to pay anything if there was no real financial loss?

Click here to see how the court responded.

Mail is the insurance agency's lifeblood. Information may arrive through the postal service or via email but it must be handled correctly, regardless of how it arrives. When it is not, there can be serious consequences for both the agency and the client.

Click here to review a letter you might consider as a standard part of your agency procedure. It acknowledges receipt of the suit papers and notifies your client that they were forwarded to the insurance carrier. This type of documentation is a great trail if there is any dispute.

There is an old saying that the "shoemaker's children have no shoes." Is that true about your agency? Have you worked with your clients to implement risk management and loss prevention plans but neglected to evaluate your own agency? Now may be a good time to stop and review your internal procedures.

Click here for some helpful loss prevention tips to consider during the review.

Our best clients provide complete applications that are both accurate and easy to understand. Those applications make underwriters smile and help get the best quotes. Even better, premium audit or misrepresentation problems usually do not occur after the policies are issued.

Do you present yourself as a best client to your E&O carrier?

Click here to review an IMP Cybercast on Insurance Agents Errors and Omissions coverage for some insights from three underwriters on the subject.