5 Simple Ways to Avoid E&O Claims

5 Simple Ways to Avoid E&O Claims

Follow these simple tips and tricks to avoid E&O insurance claims being filed against you. 

1. DO YOUR OWN DUE DILIGENCE

  • Investigate the financial standing of any company whose products you are selling, if you are not selling through your primary company.
  • Check on the company’s reputation for denying claims or underwriting “after the fact”.
  • Check reputations of General Agents, brokerage agencies, other brokers, etc. with which you place business.

2. STANDARDIZE POLICIES & PROCEDURES.

  • Set up a manual of all routinely-followed procedures. Keep a manual on every employee’s desk.
  • Document, in writing, each employee’s scope of authority.
  • Develop checklists to insure the timely completion of tasks.
  • Set up and maintain a diary system.
  • Set up a forms manual with instructions outlining when to use standard letters, memos, meeting reports, etc.
  • Set up a procedure for handling checks.
  • Devise a system to learn about complaints/comments, so you are aware of problems immediately.
  • Use 2-part telephone memos and note forms. Mail one part to the client with notes confirming your discussions

3. TRAIN YOUR STAFF

  • Devise a training checklist for new employees.
  • Document employee’s file regarding completed training.
  • Include dates of training, subject matter, grades, etc.
  • Hold staff meetings every one to two weeks. Have a written meeting agenda, keep minutes and record attendees’ names. Keep this information, and handouts, in your meeting file.
  • Train employees on policies and procedures listed in manual, and on company products and underwriting guidelines.
  • Emphasize loss prevention.

4. STAY CURRENT

  • Designate one person to maintain files on changes in Federal and State laws that affect your business.
  • Keep track of all staff license renewal dates.
  • Subscribe to trade journals and maintain a library.
  • Attend professional meetings regularly.
  • Participate at professional conventions.

5. THINK DEFENSIVELY

  • Maintain a defensive, professional attitude.
  • Leann from professionals such as doctors. Get a second opinion, have a witness present, etc.
  • Prepare for possible court cases five years into future.
  • Carefully store files, notes and emails, maintain ex-employees’ addresses and phone numbers for possible reference, etc.

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