Our March E&O prevention tip reminds agents to always review policy exclusions.
A customer contacted his agent and requested comprehensive insurance coverage for his home and his business office building. Although the agent only had experience providing insurance for personal lines, he advised the client to purchase a policy covering both of the customer’s properties. The agent was not aware that the policy excluded coverage for certain types of office equipment and machines, some of which were housed in the customer’s office. Later that year, a fire occurred in the customer’s office building, destroying most of the building’s contents. The customer’s policy did not provide coverage for many large pieces of equipment that were destroyed by the fire. The customer brought a claim against the agent alleging that he was led to believe his policy provided coverage for all equipment contained in his office.
E&O Prevention Tip: Review all policy exclusions with the client, especially when issuing policies you have less experience with. When in doubt, consider reaching out to a specialist for coverages you find unfamiliar.
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