How Insurance Agents Can Protect Themselves from Errors and Omissions Claims

Posted on: April 6, 2023 by Huntersure

Errors & omissions insurance can cover essential costs that your clients will need to reduce the risk of claims. Ultimately, it can serve as the difference between covering a mistake or creating a headache. Insurance agents help their clients choose the right coverage for their needs. Sometimes, mistakes or oversights can lead to coverage gaps and a resulting legal claim from the client.

Errors & Omissions Claims

Check out what errors & omissions insurance can do and see how you can better serve your client.

Comprehensive Assessments Reduce the Risk of Errors & Omissions

Create a comprehensive coverage assessment procedure to follow with every new client and during every subsequent policy review. This assessment should include questions about the client’s personal and professional risks. During the process, review each type of coverage your agency offers and have your clients sign an acknowledgment of risk for any coverage they decline.

Your Clients Should Understand Their Coverage

Review the details of the coverage for each policy, including not only what the policy covers but also exclusions. Explain the factors contributing to the premiums, the client’s obligations, and any applicable deductibles. Ensure your clients fully understand their coverage to reduce the risk of E&O claims for failure to educate.

Communication Documentation Protects Against Oversights

Administrative oversights, including policy changes requested by phone, lead to costly claims for insurance agencies. Establish a procedure for documentation of every phone call and communication received by clients. Checks and balances ensure you maintain client accounts correctly to avoid missed details.

Risk Analysis Can Identify Exposure Issues

Risk analysis should take priority when evaluating the agency’s practices and your client portfolios. Anyone in your agency who writes policies or deals with clients needs risk analysis education. The better educated your staff is on risk exposure, the easier it is for them to identify gaps in client coverage and protect your agency. You might even save on your errors & omissions coverage premiums for proactive education and risk reduction.

Material Changes Require Communication

When a client’s policy renews, policy terms change, or a carrier’s financial position changes, you must notify your client and discuss any modifications that might benefit them. Your primary professional obligation is to your clients. Ensure you choose policies to meet their coverage needs and review them regularly for changes.

Data Transmission Should Happen Daily

New policy information and client changes go through transmission channels to the underwriting team and the insurer to ensure proper coverage. Transmission delays can disrupt coverage or lead to missed policies. Daily or real-time data transmission is how insurance agents can prevent E&O claims for dropped policies or lost information. Real-time transmission, in particular, ensures that the insurer and underwriters receive information on time.

Accountability and Errors & Omissions Coverage Help

Reducing your risks is the first place to start. Insurance protection is also beneficial for any potential exposure. Your standard liability coverage might cover some issues, but E&O policies exist for this purpose.

Use these tips as best practices for your agency. Set expectations with your staff and maintain your involvement for peace of mind. These measures, with the correct errors & omissions coverage, will help protect your agency.

About Huntersure

Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.

Posted in: E & O E & O Insurance Errors & Omissions Errors & Omissions Insurance