When the economy is down, business owners aim to cut costs by moving their current insurance coverage from one carrier to another, or by settling for reductions in their existing coverage.
As an insurance professional, you provide valuable guidance to your clients, but you cannot force them to purchase enhancements to their policy.
To protect yourself and your firm from the risks that come along with these changes, you must keep proper documentation.
More often, claims are brought against insurance agents for failing to disclose a reduction in coverage in the documentation - everything from a new mold exclusion to a prior work exclusion. Proper documentation can save you and your insurance brokerage from risk, in the event of a claim.
Clients tend to make purchase decisions based on the thought that they would never have a claim brought against them. Reality is, that it's more likely for them to face a claim than it is for them not to.
The best way for an insurance agent or broker to avoid a claim is to provide proper documentation of the client's coverage and to obtain a signature from the client, that they fully understand the coverage and its limitations.
Another way to protect your brokerage is to purchase professional liability insurance coverage. This coverage offers protection from bearing the full cost of defending certain lawsuits against you or your business.
More specifically, Errors and Omissions Liability insurance can protect against claims or allegations of “negligence” or “failure to perform” a professional service.
It’s common for any business or employee to make mistakes. Anyone could overlook or misplace critical information, forget a crucial step in a process, or be misunderstood or misinterpreted. Because of these “errors and omissions” the risk of being sued by clients or even other third parties exists.
Be sure your brokerage is not at risk - contact one of our representatives today for a free policy review.