If I were asked to describe the perfect client, my answer wouldbe the client who views me as an insurance professional, not as acomparison price shopper. My perfect client would have completereliance on my team and our insurance skills. Because of thisreliance, Mr. or Mrs. Client would expect that we insurance expertswould negotiate insurance coverage on his or her insuranceportfolio. Maybe today that sounds too good to be true, but it wasnot always this way. Unfortunately, as insurance becomes more of acommodity and less of an intangible product, the perfect client isharder to find. To put it another way, the perfect client is onewith whom you have a “special relationship.” At the center of asubstantial portion of insurance litigation is the duty to adviseinsurance clients. Issues like inadequate or no insurance coverage,or the client misunderstanding that the missing peril was coveredby the insurance contracts, are common issues. Despite the tendencyto commoditize insurance, clients do not want to regard theproducer as an order-taker when trouble arises. I believe mostpeople seek out insurance producers on whom they can rely becauseof knowledge and skills when selecting insurance protection.Litigation in many jurisdictions rejects the concept that insuranceproducers have a duty to be expert advisors to their clients. Thisconcept goes right along with the trend to make insurance acommodity. If we extend the commodity concept to its furthestextreme, it will be reasonable in the future to ask yourprospective clients how many pounds of insurance they would like.Wait: don't relax just yet. Everything I have said up to this pointis true unless there is something more. This something more is the“special relationship” that exists between the client and theagent. When a special relationship exists, it creates a heightenedduty on the insurance producer to advise and counsel their clients.There is no exact answer to the question of how the insuranceprofessional knows if a special relationship exists. There are,however, several important factors that go a long way indetermining the actual duty of the insurance producer to advise andcounsel their clients. According to Karen K. Porter, J.D., in “TheLegal Environment of Insurance,” the factors are: 1 The greater theinvolvement in the cost of his insurance and other matters bearingon insurance such as the customer's business, the greater thechance that courts will find a special or expanded producer andcustomer relationship. 2 The more the producer leaves the arena ofinsurance order-taker or application conduit and begins to act asan insurance advisor or counselor, the greater the chance that acourt will find a special or expanded relationship. 3 The more thecustomer actually relies on the producer's expertise and knowledge,the more likely that a special or expanded relationship will befound. 4 The greater the complexity of the insurance account orcoverage sought and the greater level of specialized producerknowledge required, the greater the chance that a court would findthe duty to advise on the part of the producer. In addition to theabove, other significant factors are the length of the relationshipand whether the insurance professional portrays him or herself asan expert or an insurance consultant with specific knowledgerelating to the coverage being proposed. Just in case you thoughtit's easy to determine whether a special relationship exists,consider this matter that recently occurred in Pennsylvania. Theinsured contacts an agent and informs the agent that he wantscomplete coverage for his property and premises. The agent agreesto provide the coverage but never inspects the property orpremises. It turns out that there is a pond on the properly thatoverflows. The premises and property are damaged and, of course,there is no flood coverage. The client sues and the lower courtdetermines that there was no special relationship; therefore, theagent had no duty to inspect the insured location, case dismissed.The case is appealed by the insured to a superior court, whichfinds that insurance agents always have a duty to inspect thepremises to be insured. The defendant in the case then appeals tothe Supreme Court of Pennsylvania, which remands the case back tothe superior court, which then reverses its finding. Confusing, tosay the least. If you're fortunate enough to have those perfectclients, it is probable that they also are some of your largerclients. Because of the development of recent court decisions,another legal minefield has been created for members of theinsurance industry. This is truly a good news/bad news situation.The good news: If you have clients who rely on your skills and notthe lowest premium, it will do wonders for your persistencystatistics and your bottom line. The bad news: When something goeswrong, you can count on your professional services being calledinto question. Nothing in this article should be construed as asuggestion that certain clients deserve less than your bestprofessional services. The purpose of this commentary is to makeyou fully aware that you have greater responsibility to certainclients, which in turn creates a greater exposure to legalliability. Most agencies are aware of the 80/20 rule. Thus, 20percent of the clients receive 80 percent of the service. It isprobable that the 20 percent group includes the clients with whomyou may have a special relationship. Therefore, the executives ofan insurance organization must ascertain that the entire teamrealizes and acts upon their heightened responsibility to adviseand counsel when working with this special group of clients. I am acharter member of what I call the “no surprises” school ofunderwriting. What this means in actual practice is that I useapplications and complete every question and ask many morequestions that were not included in the applications. In addition,I document everything that was discussed at the sales meeting. I dothis for two reasons. The first is obvious: I want to develop asmuch information and understand my prospective client's insurancerequirements. The second is less obvious: My underwriting andinterviewing methods usually develop additional insuranceexposures. In my opinion, if you adopt the no surprisesunderwriting process, you will not have it to wonder about yourrelationship–and you'll probably be doing a lot more business.