Having professional liability insurance to cover E&O claims provides an extra layer of protection for you and your organization. In addition to having this additional coverage, there are a number of practices you should employ to help minimize the risk of incurring such claims in the first place:
Follow
Correct Procedures
First of all,
make sure that you fully understand the intricate details of all of the
insurance options your company offers and the extents and limitations of each
policy. You need to know exactly what you are providing to your clients so that
you can make the best possible recommendations for their individual needs. Be sure to follow all applicable regulations, and always employ ethical business practices. If you are unsure whether a particular action is ethical, it is usually best to err on the side of caution until you can be completely sure. When completing application forms for your clients, always make sure that each question is answered fully and accurately to prevent future complications due to misrepresented information.
Communicate
with Your Clients
Throughout the
entire process of developing an insurance coverage plan for a client, take the
time to explain everything to the client in detail. You want to ensure that
your client fully understands the products that they are getting and the scope
of coverage. If a client chooses to decline a particular aspect of coverage,
impress upon them the potential risks of not obtaining that coverage and what
it could mean for them in the future. The last thing you want is for a client
to file an E&O claim against you simply because you did not make them aware
of potential complications with their policies. In the event that you must
switch your client over to a different insurance carrier for a particular
policy, be sure to alert him or her to any changes in levels of coverage,
deductibles, or other pertinent information.
Document
Everything
As you work
with your clients, both during the application process and in subsequent
conversations regarding policy changes or claims, keep a record of everything
that was discussed and the results of those conversations. Any time a client
elects to make a change to a policy or remove certain coverage options, get it
in writing with the client's signature. Having this paper trail can greatly
reduce your liability in E&O claims because you will be able to prove that
you provided the client with all of the information needed for them to make an
educated decision and that the changes you made to the policy were at the
client's direction. While it is unlikely that you will ever need most of this
documentation in the future, it is best to keep track of everything just in
case there is ever an issue.By following these tips, you can greatly reduce your risk of E&O claims in your insurance practice. However, it is important to remember that we are all human, and even with the most careful application of these practices, mistakes can still happen. Any time there is a discrepancy, report it to your E&O insurance provider immediately. The faster you take action, the better your insurance company will be able to help you weather the storm.
All information provided in this blog is for informational purposes only. The sources used are presumed accurate. CalSurance Associates, Brown & Brown Program Insurance Services, Inc. and Brown & Brown, Inc. will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use and will not assume responsibility for any misguided information. No guarantees are implied.
