Why Claims Adjustors Need Errors and Omissions Insurance

Why Claims Adjustors Need Errors and Omissions Insurance

Overview: Claims adjustors need errors and omissions insurance. The most common reasons for E&O claims against adjusters are failure to deliver, charges of overpayment, unfair settlement accusations, and breach of contract.

An errors and omissions claim is something that can feel like it comes out of nowhere, and it’s easy to take it personally. But the truth is, if you’re a claims adjuster, there’s a good chance that you’ll experience one eventually. Take a look at some of the reasons why a claims adjustor might receive an errors and omissions claim and what they need to know about managing them.

Sources of Claims Against Claims Adjusters 

A claims adjustor could see a claim come from several directions, depending on who they’re working for and whose claims they’re adjusting.

For example, a claim might be filed by a client. On the other hand, if you’re a public adjuster, or if you’re an independent adjuster working for yourself on a contract basis, then you’re also open to claims from the insurer that you’re providing claims services for.

The Kinds of Claims Insurance Adjusters See

Claims adjusters tend to see specific errors and omissions claims. These are some of the more common ones:

  • Failure to deliver. When a client pays for a service or product that they never receive, it’s no surprise that they’re going to try to recoup their losses in any way available to them.
  • Overpayment. This can happen if the insurer they’re working for thinks that they’ve been too generous with their money.
  • Breach of contract. This type of professional liability can apply to nearly any professional who signs a contract, including claims adjustors. It’s critically important that claims adjusters read contracts carefully before signing.
  • Unfair settlement practices.

What to Do When You Receive an Errors and Omissions Claim

insurance agent e and o
Hopefully, you already have an errors and omissions policy. The time to get one of these policies is before someone files a claim.

Remember the dos and don’ts of E&O claims. For example, tell your carrier about the claim right away, give them all of the pertinent information, and cooperate fully. You definitely want to avoid making any statements without your carrier’s approval – especially any statements of negligence or wrongdoing – or making any changes to the file in question.

Keep in mind that in order for an errors and omissions policy to be in effect, it needs to have been active not only at the time of the incident but also when the claim was filed. That means if you retire or make a professional transfer that necessitates a change in insurance, you’ll need to ensure that your previous policies remain current.

To find out more about managing errors and omissions claims or how to know if you have enough coverage, contact us about our E&O insurance.

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