Many insurance agents end up paying for simple mistakes during the administrative process when it comes to selling insurance and making the sale. For the most part, making the sale is easy as is completing the paperwork.
But, the paperwork can be a rather tedious process where if not done properly, can result in a major E&O claim. Mistakes like this can be rather costly—one misplaced document or unfinished piece of paper can make or break you in the event of a lawsuit. One of the best ways to avoid this type of situation is to have a process in your office that ensures you carefully review and process your paperwork.
According to a study by Sally Combs, Claims Director at Fireman’s Fund Insurance Corporation , fifty percent of E&O claims could be simply be avoided if insurance agents would pay better attention. The study found that E&O claims were not the result of dishonesty or complex issues, but instead a result of simple oversight by the agent or staff member. By implementing a standard procedure in your office that has clear and concise instructions for handling paperwork most of these oversights can be avoided. This process would ensure that you and your entire staff are always compliant in handling information. With the collective effort of everyone involved, you are less likely to have anything important fall through the cracks.
Be sure and pay attention to details—this is one your best defenses against a lawsuit. The bottom line—when offering any type of coverage put it in writing. If the client declines, document that or have them sign a letter specifically declining the coverage. Additionally, a few other things that can help to avoid E&O claims are:
Advise Wisely —Even though you may not consider yourself a “consultant,” you may be placing yourself in this category when offering up certain advice to insurance agents so be mindful of what you say.
Mind Your P’s and C’s —knowing both your Client and your Product are key elements to avoiding E&O claims.
Go the Extra Mile —maintain a long-term perspective of your business by building trust and strong relationships so you sustain your profitability and client retention.
Remember, none of these tips are a guarantee against any claims, but they can minimize the risks you expose yourself to with each new client you gain.
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