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E&O Prevention Tip: Take Care to Document

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Our April E&O prevention tip for insurance agents focuses on the importance of documentation.


Claim Example:

A customer requested an automobile policy from his agent that excluded collision coverage. The agent advised the customer to consider including collision coverage because he had recently experienced a couple of car accidents. The customer declined and selected a policy with a lower premium. Later that month, the customer was involved in a car accident that severely damaged his vehicle and subsequently reported a claim. When he learned his auto policy did not provide coverage for the damages to his vehicle, the customer brought a claim against his agent alleging he was not made aware that his auto policy did not provide collision coverage. The agent was unable to provide evidence to the contrary as he did not document the conversation advising the customer to consider collision coverage.


E&O Prevention Tip:

While respecting a customer’s request is important; take extra care to document instances in which a customer declines coverage you have advised. Consider including notes referring to the coverage options discussed or offered to the customer.

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