Last week, Mike LaRocco, CEO & president of State Auto Financial Corp., commented, “Distracted driving, notably due to smartphone usage, is a ‘societal problem’”—and that insurance carriers “need to step up to help identify the severity of the problem” because they “can quantify it.”

Not long after LaRocco’s statement, a disturbing example was back in the spotlight: Last fall, 18-year-old Christal McGee crashed a Mercedes at 107 mph while taking photos for the Snapchat app, which features a filter that records speed of travel. McGee reached 113 mph on a suburban road outside Atlanta where the speed limit is 55 mph—and didn’t see Maynard Wentworth, an Uber driver just starting his shift that night, until it was too late.

After suffering a traumatic brain injury and months of hospitalization, Wentworth and his wife recently announced they plan to sue not only McGee, but also Snapchat for negligence. The lawsuit alleges that the mph filter was cited in similar accidents prior to this crash, making Snapchat equally responsible for failing to remove the filter from the app.

As long as there have been automobiles, there have been distracted drivers. But thanks to cellphones and other devices, the potential threat to the public continues to escalate. And while this example involved a teenager and willful intent, distracted drivers run the gamut.

Of interest for independent insurance agents, the insurance implications extend beyond the usual liability to the driver and her family. A recent trend has evolved from traditional insurance and actuarial science called enterprise risk management (ERM). ERM’s risk management framework involves identifying risks and opportunities relevant to an organization’s objectives; assessing them in terms of likelihood and potential impact; determining a response strategy; and monitoring progress.

ERM can take a variety of forms, from traditional risks and vicarious liability arising from "black swan" events to not responding to the real possibility that an organization can create a hazard by ignoring their responsibility—such as failing to lock the gate to an outdoor pool after a neighbor has complained.

When considering ERM for their business, independent insurance agents must ask two questions:

1) Who at your agency is performing ERM? While many agencies are diligent about reducing errors & omissions exposures, ERM is broader than those typical exposures. For example, what happens if your agency's physical location receives seven inches of rain in an hour, resulting in flooding and severe internal and external damage? How will your agency respond to your clients in their time of need?

2) How does your agency educate your personal and commercial lines clients about how they can establish a meaningful ERM protocol? What type and level of employee should perform this function—a new college graduate or the CEO?

A conversation with personal lines clients about distracted driving will certainly result in higher auto limits for uninsured/underinsured and personal umbrella coverage. For commercial lines clients, the possibility of a cyber breach has attracted considerable attention from an ERM standpoint, both in terms of finances and reputation.

Be sure that your agency invests adequate time and attention both internally and with clients to ensure they take reasonable risk mitigation and transfer precautions.

Dave Evans is a certified financial planner and an IA contributor.