Agency E&O Tip #1: Document, Document, Document
One of the first rules of being an insurance agent is to put everything in writing. This is the kind of agency E&O tip you wouldn’t think we’d need to bring up, but we do.
If you’re a customer service representative — a CSR in the business — don’t you hate it when you go into a file and you can’t find the information you need? Maybe it’s an old application you wanted to reference. Perhaps you wanted to review a dec page from last year to compare coverages with now.
The above examples are nuisance sort of things in most cases. What happens, though, when there’s a claim? You’re missing correspondence indicating the insured didn’t want the monies and securities coverage. When they come looking for $10,000, they blame your agency and say they had no idea the policy didn’t have it.
If you’re an insurance agent, you know things like this can happen. You also know you don’t want to be stuck in the middle of a potential Errors & Omissions issue.
Agency E&O Tip: Just Document, Baby
If a client is disinterested in an optional coverage, have them sign off that they want it removed. Perhaps have them write an e-mail or a signed note indicating they don’t wish to have it. Make sure you get this documentation and save it.
Remember also that you as agent have to offer all coverages that may be of interest to a client. The assumption will always be that the client has less of a burden to understand their coverage than you. Even if you don’t quote them that $5 million umbrella or Employment Practices Liability, you can at least advise them that it’s available and help them understand what it does. (You should, though.) Again, put it all in writing, and save it in your file.
Part of the reason you as an agent get an Errors & Omissions policy is to protect your agency from suffering financial harm for coverage mistakes. Still, no agent wants to get dinged on such a claim. If you’re not making every effort to note clearly the things you’ve advised your client and the things they’ve advised you, you’re leaving yourselves open to an E&O.