E&O prevention tip for the month of May!
A customer who carried homeowners insurance built a work shed on his property and contacted his agent to find out if he would need to update his policy or purchase a new one to provide coverage for his shed. Although the agent was new and had little experience placing homeowners insurance, he told the customer the shed could be covered by simply adding it to his current policy. The customer agreed to add the additional structure to his homeowners policy. A few months later, the shed collapsed and all its contents were destroyed. The customer was surprised to learn that some of the equipment in the shed was not covered as it was classified as a type of machinery that was excluded from the policy. The agent did not ask many questions about the contents of the shed and did not realize some of it would fall under the exclusions portion of the policy. The customer brought a claim against the agent for failing to provide adequate coverage.
E&O Prevention Tip:
When in doubt about coverage questions, always take the time to find the correct answer before replying to the customer. Although you may feel compelled to respond to a customer inquiry instantly, it’s more important to ensure you are delivering accurate information.
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