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.

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

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.

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.

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.