Category: News

Recent News and Events from N.P. James Insurance Agency, Inc.

Contract Terms are Challenging

The sign of a robust economy is the number of contracts we are asked to review for our clients. Boston is genuinely a hub of global technology services, contracting with some of the world’s largest enterprises.

Our review of clients’ contracts involve both advising on adequacy of limits, as well as specific comments on policy terms and clauses. Privacy & Security coverage is commonplace now, provided by specialty cyber-liability policy forms.

Some specifically troubling areas are clauses that stipulate that the entire client/vendor contract be an insured contract on the vendor’s policy, and clauses requiring the continuation of insurance for a number of years, usually three, following completion of the work.

The “insured contract” issue could easily run six figures in cost since intellectual property indemnification is standard in every contract and IP insurance is expensive. Contractual requirements for “continuation of insurance” are risky since there are no guarantees of insurability beyond the expiration of this year’s policy.

Being in non-compliance with your insurance requirements could be thorny should disputes arise over other aspects of your service.

Avoiding that requires advice, negotiation, and securing adequate coverage for compliance.

“Social Engineering” Crimes & Insurance

Most crime insurance policies exclude coverage when an employee is tricked into transferring money or property to an unauthorized party.  This is considered to be willingly transferred, and is commonly known now as a “Social Engineering” crime.  Social Engineering is not within the scope of most existing crime policies, which are intended for crimes such as holdups, robbery, or computer hacking by an outsider.  Willingly parting with money or property is also a standard exclusion on crime policies.

Social Engineering occurs when a party disguises themselves as an “authorized” party and instructs an employee to transfer money to them.  We are generally familiar with emails which appear to be from a known entity, but when we hit “reply” the responding email address is different.  The same type of disguise is used by social engineers, who pretend to be a known party to the victim.

What is difficult in these cases from an insurance standpoint is that an employee is actually responsible for the theft, but has not knowingly committed a criminal act.  Thus, the terms of an “employee theft” claim will not be met; such terms require a criminal complaint naming the employee.

Social Engineering is becoming commonplace.  Company management should wisely conduct training as well as impose strict controls on wire transfer authorization.

Crime insurers have introduced additional coverage forms to include social engineering losses on their policies.  It is prudent to review both procedures and risks to this type of crime.

N.P. James Insurance Agency sponsors Concord Carlisle High School Students In Control “Skid School”

Students Learn Driving Skills for Hazardous Conditions

Nancy James, owner of the N.P. James Insurance Agency in Concord, announced that she is sponsoring Concord Carlisle High School driver education students for In Control’s “skid school” advanced driver training program. The N.P. James Agency’s scholarships offer reduced fees for important additional hazardous condition driving techniques. With this advanced steering and speed control experience, youthful operators better understand roadway risks and defensive techniques, as well as experiencing the consequences of speed.

In addition to hazardous condition driving, the course covers a topic near and dear to youth – cell phone use and texting while driving. Drivers learn the real-life consequences of texting and
driving which are devastating. While the Junior Operator Law prohibits JOL operators from cell phone use when driving, the ongoing dangers of any distracted driving are reinforced in the class.
James, who has been addressing parents of new drivers “Teen Driver Safety” programs at CCHS for over two decades, spreading the message that there seems to be no room for error on our roadways. Even to the most seasoned driver can often be caught unaware. “Both the basic driver education, offered through Concord Carlisle High School, and advanced driver training programs are crucial during the first very vulnerable driving years,” James remarked.

CCHS Driver Educations students seeking sponsorship scholarships should inquire of Courtland Booth, program director or

N.P. James Insurance Celebrates 25th Anniversary

Nancy James, principal, celebrates by underwriting the publication and distribution of the Concord Carlisle Regional School District Adult & Community Education catalog.

Concord, MA, April 2, 2007 – The N.P. James Insurance Agency is celebrating its 25th year in business in 2007. Nancy James, principal, specializes in technology risks and has positioned the agency to serve the global market so important to Massachusetts technology manufacturers and software developers. A professional team of trained staff assists clients in identifying risk, planning solutions, and handling claims.

In recognition of her 25 years in business in Concord and to thank the town for all it has done to make the agency a success, Nancy James has underwritten the publication and distribution of the Concord Carlisle Regional School District Adult & Community Education catalog. Every household in Concord, Carlisle, Sudbury, Bedford, and Lincoln received the 32-page booklet, containing information on more than 150 courses and programs for the winter semester.

“It’s a major gift for us, and we couldn’t be happier,” says Jim Saltonstall, chairperson of the Adult & Community Education Advisory Board. “It gives us renewed confidence that we can keep the schoolhouse doors open in the evening so that everyone can benefit.”

Nancy James, who wrote the first cyberspace liability policy in the U.S., applies her depth of technology product knowledge and her earlier professional background of more than a dozen years as a computer systems designer to help technology clients manage risk. A frequent author and speaker in the US and Europe, James covers issues related to technology exposures for identification of the complex, global risks in technology.

The agency also has a personal lines department experienced in handling complex personal assets for individuals’ home and auto insurance needs necessary to suburban clientele.

The N. P. James Insurance Agency of Concord, MA, founded in 1982, specializes in high technology risks, exposure analysis, and insurance. James, a licensed insurance advisor, is currently serving as co-president of the Massachusetts Society of Licensed Insurance Advisors.

She is a member of The Boston Club, Association for Corporate Growth, Concord Business Partnership, and the Concord Chamber of Commerce. James also serves on a number of non-profit boards. For more information, please visit or call 978-369-2771.

The First Internet Liability Insurance Policy

The First Internet Liability Insurance Policy

(designed and placed by Nancy P. James)

In 1997 there was no insurance to protect against internet related business errors. All kinds of new legal issues were arising as people hopped on the web to promote business and products. Name confusion (whoever confused Delta Airlines with Delta Faucets until “”) and rights to URL identity became the first cases to be brought to court. Attorneys at TestaHurwitz asked me to craft an internet liability policy for a client providing broad internet content as well as commentary.

When technology insurers turned me down, I looked to media insurers, crafting a peril by peril policy. A “war game” was played to try to break the site, identified perils rated, and the first internet liability policy in the country (likely the world) was placed.

Newsletter March 2011

Massachusetts Society of Licensed Insurance Advisers Elects Nancy James as Co-President

Concord, MA, September 14, 2006 – At its annual meeting in Boston, the Massachusetts Society of Licensed Insurance Advisers elected Nancy James, principal of N.P. James Insurance Agency, as co-president for the 2006-2007 term. James also served as president for the M.S.L.I.A. in 1996-1997. The purpose of M.S.L.I.A is to uphold the ethical and professional standards of all insurance advisers licensed by the Commonwealth of Massachusetts.

The N.P. James Insurance Agency is in its 24th year in business. Nancy James, principal, specializes in technology risks and has uniquely positioned the agency to serve the global market so important to Massachusetts technology and manufacturing businesses. A professional team of trained staff assists clients in identifying risk, planning solutions, and claims handling.

“The coming year is important to the M.S.L.I.A. with sponsorship of legislation that will set and uphold the professional standards of all licensed insurance advisers in Massachusetts,” James said. “We look forward to continuing the long history of the organization in assuring clients that licensed advisers meet the defined principles and services.”

Nancy James, who wrote the first cyberspace liability policy in the U.S., applies her depth of technology product knowledge and her earlier professional background of more than a dozen years as a computer systems designer to help technology clients manage risk. A frequent author and speaker, James covers issues related to technology exposures for cutting edge identification of emerging risks in technology.

The N. P. James Insurance Agency of Concord, MA, founded in 1982, specializes in high technology risks, exposure analysis, and insurance. James is a licensed insurance adviser, a member of The Boston Club, Association for Corporate Growth, American Bar Association, and the Concord Chamber of Commerce. James also serves on a number of non-profit boards. For more information, please visit or call 978-369-2771.

How insurers handle electronics in 2002

  • Your computers are customarily categorized in a lump under “Computers” with a single total value of coverage. You will be expected to send your insurer a complete inventory of all computer hardware and software at least annually in order to support value as well as to facilitate later claims adjustment.
  • Laptops at this time cannot be specifically scheduled. But you should list them on your inventory.
  • Most insurers are now insisting on a $2,500 laptop deductible; they simply do not want to be insuring these high loss items. Laptops are disappearing with some rapidity.
  • Computers in transit are getting harder to insure as theft claims are dramatically on the increase.

A Critical Look at Agency/Company Interface: An Interview with Nancy James


Best’s Review-Property/Casualty Insurance Edition
An Interview with Nancy James

This month’s technology section revolves around agents’ investigation of the automated agency. In our lead article, Nancy James, an insurance broker and data processing consultant on insurance matters, raises some provocative issues in “A Critical Look at Agency/Company Interface. ” Automation of insurance companies, she points out, has supported the way the industry does business with benefits of speed and economy, but has not done much to change the basic way in which the business functions.

But automation of the agency, she proposes, will disrupt significantly the traditional ways of doing business as multiple aspects of the agent/company relationship are brought within the scope of the computer, streamlining operations but also placing additional responsibilities upon the agent. In this climate of change, Ms. James urges, agents must assess carefully the impact of such developments on their own operations and on their relationships with insurers.

An accompanying article, “A Discussion of Agent Concerns, ” reports on some of the issues discussed when Ms. James and John W. Folk, president of the Insurance Institute for Research (sponsor of a well publicized agency automation pilot project), both appeared as speakers before an audience of independent agents at on automation seminar sponsored by the Professional Insurance Agents of New England. Agents do have valid concerns about certain cost and responsibility factors, Mr. Folk agreed, but the competitive needs of the American Agency System for an industry wide network make it imperative that these issues be resolved without impeding the evolution of the automated agency and an interface system. Automation concerns per se, he cautioned, must not become intertwined
with those of extraneous issues.

Our final article reports the substance of a panel discussion, also part of PIA-NE’s Agency Automation Fair. Eight agents, all owners of in-house computers, reported on their experiences as users,
The agencies represented cover a broad spectrum of lines of business, premium volume, and computer sophistication. One agency, for instance, commissioned custom software in the mid-1970s, before today’s turnkey systems were available; another took the first step with the purchase of an Apple II just a year ago. Some agencies are fully automated; others have not gotten much beyond an accounting system to replace an outside service, Each agency purchased its system for somewhat different reasons and uses it in somewhat different ways. Their combined reports provide an intriguing
series of “snapshots” of the present state of agency automation and may encourage some agents who have not yet taken the plunge to explore the wide range of possibilities open to them.

A Critical Look at Agency/Company Interface

ONE does not need a long memory or deep understanding of data processing to realize that many early expectations for the computer have been proven unrealistic. With greater numbers of agents expressing an interest in automation, as indicated by a number of recent surveys, a critical look is needed at what part each of the industry players will provide in the decision-making process. This article will examine how data processing supports the insurance industry agency system, where computer systems have fallen short of stated objectives, and what business concessions have and will be made to accommodate computing needs.

One must be cautious not to attribute independent capability to the “computer’s contribution,” for the computer is, after all, an inanimate object. First, let us summarize the position of the companies, which have longer experience with data processing support. Without oversimplification of the extent of development effort involved, it is evident that most insurance companies have
been utilizing data processing support for a significant number of years. Routine functions were automated first, then repetitious tasks. The efficiency of data entry input defined the progression of systems development which, in part, alleviated rapidly expanding paper flows and the resultant staffing burdens. Large centralized systems were developed which at least approximated the existent central files.

What is significant here is the mode and purpose of systems development; departures from business functioning which might have necessitated change in the basic product-underwriting-adjusting methods were not required. When such demands have been made upon the industry, they generally have not been attributed to data processing requirements. Business has gone on as usual according to the conditions of the time, but supported to an increasingly greater extent by computerized systems.

A Different Tack

This seems not to be so when automation addresses the agent. An entire harmonious order of business support is upended with the introduction of a turnkey minicomputer. No area is left untouched as gravitational forces swiftly pull all facets of agency operations into the computer’s sphere. More important than the influence upon mere operational changes within the agency are the business decisions forced by the need to communicate electronic data from the agent to the company.

It is this aspect which is subtly changing the traditional and fundamental business relationship between the company and the agent, and ultimately the consumer. There has always existed that
delicate balance between the interests and perspectives of the company and of the agent. An amiable adversary relationship has evolved wherein the company profits and the agent profits under differing conditions, each jurisdictionally both dependent and autonomous by supporting the consumer’s needs and the company’s interests in low-risk business. While agents seek reliable markets for the client’s needs, company underwriters set a satisfactory price offer for acceptable risks. Losses are adjusted bY the best objective sources both have available.

what appears ominously on the horizon of the agent’s future are increasing demands upon him not only to find and sell the account, but to underwrite the risk, fairly and competitively, and then to adjust losses. Although this may appear, and has been advertised as, a greater faith in “select” agents, I maintain that the companies have been forced to grant excessive underwriting latitude to agents to circumvent their own data processing shortcomings.

The Weak Link

These shortcomings appear primarily in the area of agency/company communications, necessitating underwriting at the source of business. The network required to transmit an underwriting request for response within an acceptable time period is just not available, and attempts to construct workable networks during the last decade have not yet succeeded. The implications of these failures
(beyond the obvious lack of technical capabilities) have not been addressed and, indeed, may have deliberately been disguised.

Apologists for greater underwriting authority point to the example of large agency operations and posit the mistaken assumption that the small agent by virtue of success and profitability can assume the disproportionate autonomy required of large houses accustomed to underwriting and settling account claims. It poses, nonetheless, a conflict of interest when one agent (or office) Attempts to underwrite fairly in competitive conditions any particular key account, and can later be placed in the position of assessing a coinsurance requirement for loss adjustment.

Companies Relieved of Risk

Proponents argue that the system is self-policing, but implications of the consequences of such policing evoke pictures of expensively automated agencies with fully functional company interface programs being suddenly truncated for Poor underwriting averages and/ or higher than average loss payments. It is folly to wish additional risks of judgment on the “average” size agent while relieving the companies more and more of any risk. And that is precisely what will happen as more agents automate.

The continued development of data processing equipment, particularly in the minicomputer line, and expectations of substantial price reductions in the near future are opening the computer market door to virtually any size agency. It appears probable that within this decade most insurance agencies will own their own systems, or will be fully process-supported by an extensive policy writing/accounting service. Critical business decisions which will be made in these intervening years will decide the ultimate success of agency-company relations under these new conditions. Assessing the merits of these decisions is up to us.