Some agents and brokers have been viewed as order takers rather than insurance professionals. When does an order taker morph into a trusted advisor? As so often happens in the evolution of legal precedents, a phrase such as “special relationship” starts as a narrow exception to the general rule, and over time begins to swallow the rule.

This year, the Indiana Supreme Court took its turn at crafting a litmus test for a special relationship. In Indiana Restorative Dentistry v. Laven Insurance, the court dealt with a truly extended period of time. IRD, a dental practice, had opened in 1978, and worked with the same agent for the following 29 years. In 2009, a fire completely destroyed the dental office. The coverage for office contents had a limit of $200,000, but the loss of contents was valued at $700,000, thus a $500,000 underinsured loss.

I'll summarize the facts so you can decide whether you would find a special relationship:

• The dentist and the agent spoke by phone a few times each year, mainly near renewal time, but they had never met in person until after the fire.

• The agent sent an annual letter to IRD before each policy renewal, summarizing the existing coverage and asking for any changes in the dental practice or specific changes that IRD wanted to make.

• In the final renewal before the fire, the dentist sent back the letter, suggesting for the first time that the policy limits be increased, though no specific amount was requested.

• The agent renewed the policy with the same limit, sending the renewal policy with a cover letter asking the dentist to “take a moment to look these policies over and be sure that they have been issued to your liking.” But the dentist did not read the letter or respond; the renewal policy went straight to the filing cabinet.

• The agency sent a “generic valuation guideline” for dental office contents with one if its letters.

• Every calendar quarter, the agent sent a third-party's “risk review” newsletter to the dentist. One such newsletter stated: “A professional insurance agency is trained in risk analysis, which involves evaluating risk exposure to measure the potential loss to your business. With your specific business and property in mind, your agency can recommend appropriate insurance coverage.”