The holidays bring good times with family and friends and time off from work to make happy memories. But there are also some heightened risks around this time of year to watch out for both in our personal and professional lives. At home, we should watch out for excessive holiday spending, overconsumption of alcohol, and winter driving hazards. And at work, independent agents and brokers can face a heightened risk of E&O insurance claims.
Rushing to meet end-of-year goals and deadlines can cause agents to lose focus or work less carefully than usual. Trying to juggle 1/1 renewals and new business sales can create challenges when remembering to explain policy changes or coverage gaps. These careless mistakes can lead to errors and omissions claims, so it’s important to watch out for these holiday risks at work.
In this article, read on to learn more about holiday risks independent agents and brokers should watch out for and how to avoid them.
Holiday E&O Insurance Risks to Watch For
The last few weeks of the year are busy in every industry, but it feels magnified when you work in insurance. Not only are you working hard to meet your goals, you also have to balance writing new business with your January 1 renewals. All of these pressures at once can create the perfect storm for possible E&O insurance claims. When you rush, you can easily make mistakes leading to E&O losses.
Watch out for these holiday risks that can up your E&O losses:
Making administrative errors due to rushing through applications and paperwork.
It is very easy to make a mistake with the administrative part of insurance sales. Forgetting to date paperwork or missing a signature are simple mistakes that can lead to expensive claims. To reduce the possibility of administrative errors, try slowing down and reviewing your work. Follow the same process with every form to take advantage of the muscle memory that develops from routine. And reduce the number of people working on your applications to lessen the possibility of transmittal errors as work moves between employees.
Failing to advise clients on policy changes thoroughly.
Another holiday risk agents face is failing to advise clients thoroughly. Whether it is a policy change, renewal issue, or premium increase, sometimes agents fail to communicate changes thoroughly with policyholders. This lack of communication sometimes causes significant issues down the road when a loss happens, and a customer thinks they have coverage. With so many other things fighting for your attention during the holidays, it can be easy to forget to explain an important policy nuance to a client. Try slowing down and being mindful of every interaction during this busy time of year.
Missing important updates to carriers at the end of the year.
As the agent, you are the connection between your client and the insurer. This means you are responsible for providing important updates to the carrier when things change. As the messenger, you must have systems in place to ensure nothing gets missed. Updating the insurer with timely, accurate details is critical. If the insured suffers a loss that isn’t covered because of your failure to update the carrier, you could face an E&O insurance claim. Set up a workflow to communicate with your insurers to avoid missing critical updates. Take advantage of digital communications whenever possible to send automated, instantaneous updates.
Rushing through risk analysis to save time.
While it can be tempting to rush through the risk analysis of a new client, failing to identify all the significant exposures could lead to a gap in coverage. Agents sometimes rush this part of the process because of a lack of experience, which is often amplified by the stress of the holiday season. When producers rush to finish writing new business before the new year, they may skimp on activities that take up time, like a thorough risk analysis. Combat this by training new agents and employees on the importance of a complete risk profile. Point out how missing exposures can lead to denied claims — which can turn into E&O losses. Finally, slow down and follow your usual process for investigating risk exposures with new clients to capture all the significant exposures.
Request Your Free E&O Insurance Quote Today
Visit the American Agents Alliance site for more information about our E&O insurance coverage for independent agents and brokers. While you’re there, get a free quote and learn more about your risks and coverage needs.
