The job of a good insurance agent is to provide useful information or provide the proper coverage for their customers pertaining to the business they are in and the exposures that exist within a given industry. The priority should always be to get the client exactly what he or she is looking for. If the agent is perceived as an expert or a specialist, it then potentially takes their level of legal liability up to the standard of an advisor, and this can come with some consequences when there is a problem or a mix-up.
The words that an agent uses in promoting their agency, whether it’s on the website, or in their proposals, by identifying yourself as an ‘expert’ or ‘specialist,’ you could end up paying a price for any mistake, error or omission that adversely affects your client. Hence, the need for Insurance Agents E&O to deal with claims related to any errors committed.
What makes an agency an E&O risk?
Giving each agent the flexibility to do things in their own way is usually not suggested and can certainly help to cause problems. Most businesses operate using a procedure manual, which is generally reserved for new employees to get a grasp of how the operation works but every member of the team is supposed to have a working knowledge of how things are supposed to be done.
Unfortunately, in the event of litigation, any lack of consistency or evidence that individuals in the agency didn’t follow their own procedures can spell trouble from a legal standpoint. From time to time, it’s a good idea to review agency procedures and to compare them to what the staff may actually currently be doing in business dealings. It may become apparent that certain members of the staff are not performing things the way that it is stated to do so in the manual and this can create some major issues.
While this doesn’t mean that an employee was consciously looking to vary from procedures as laid out in the manual, but the issue may be that the procedure in the agency manual may have changed, and while most were consistently performing in the correct manner, the manual may have not been updated to reflect any changes in procedure causing a gap between how some agents may be instructing their clients.
Speak to an agent about any questions or concerns regarding Insurance Agents E&O coverage, and make sure that adequate coverage is always in place.