When I entered the insurance industry 47 years ago, my mentorsimpressed on me the importance of documenting my actions as arepresentative of my employer. I learned that every task I performmust be recorded or it may as well have not been done.

Document every action, whether for a client or your company.Similarly, it is imperative to log all communication between theagent and the insured in the insured's file. Even if only one inevery thousand policy sales results in a dispute, the effort isworth the exercise.

The importance of accurate and detailed record keeping by aninsurance agent and broker was made clear by the opinion of a NewYork state appellate court presented in HansRichard Lehneis, Jr., v. Kathleen Neill, etc., et al.

On July 7, 2004, the wife of plaintiff Lehneis was in a motorvehicle accident that gave rise to a personal injury action againstthe plaintiff, which resulted in an $800,000 settlement thatLehneis paid. At the time of the accident, Lehneis only hadautomobile liability insurance coverage of $100,000 perclaimant.

Lehneis sued certified financial planner Kathleen Neill and BayHarbour Insurance Agency, who served as the plaintiff's insurancebrokers since 1985. Lehneis alleged that the defendantsnegligently, and in breach of contract, failed to secure umbrellainsurance on his behalf, which he had requested, or to inform himthat he could have acquired umbrella insurance from a differentbroker. Neill and Bay Harbour separately moved for summary judgmentdismissing the complaint insofar as asserted against them. TheSupreme Court granted their motions.

New York appellate courts are noted for the brevity of theiropinions, and the Lehneis case is no exception.

The appellate court was faced with Lehneis' claim that hisinsurance brokers failed to advise him to obtain an umbrellaliability policy or tell him where he could buy one. The appellatecourt resolved the dispute because the agent and broker defendantsmaintained good, clear and definitive records by the communicationsbetween the broker defendant and the plaintiff insured.

Faced with an appeal by the plaintiff, the appellate court wascalled upon to determine whether there was any issue of fact thatwould require a decision by the jury. If not, the summary judgmententered by the trial court, which granted the separate motions ofthe defendant Kathleen Neill and the defendant Bay HarbourInsurance Agency, should be affirmed. If the appellate courtdisagreed with Lehneis, his suit against the agent and broker wouldbe dismissed and he would recover nothing.

In this case, the appellate court concluded that the defendantsdemonstrated their prima facie entitlement to judgment as amatter of law. They did so by submitting evidence that theyinformed the plaintiff that they could not provide him with theumbrella insurance policy that he requested. The defendants alsodemonstrated that there was no special relationship between theparties.

Insurance brokers are often targets for litigation when aninsured must use his own funds to pay a judgment or settlement.

Bay Harbour obtained a summary judgment in its favor because itdocumented files and proved to the court that it was unable toobtain an umbrella policy for the plaintiff and demonstrated thatthere was no special relationship between the parties.