Errors & omissions (E&O) claims handlers know they aren’t the people policyholders are eager to chat with. While we appreciate the rare policyholder who enjoys calling us, we understand most of you are more focused on avoiding such conversations altogether.
So, how can you minimize the risk of an E&O claim? The answer is straightforward: document everything.
Proper documentation won’t prevent every claim or eliminate customer allegations, but it can be the deciding factor between a quick resolution and a costly legal battle.
The Power of Customer Sign-Offs
Consider this example: An agency managing a farm policy asked a customer to review the policy, confirm coverage limits, and sign a document indicating approval. When the customer later claimed inadequate coverage for an outbuilding lost in a fire, the signed renewal document — listing all limits, including the outbuilding — swiftly resolved the issue.
Requiring customers to sign off on their coverage selections or confirm declined recommendations is a proactive way to avoid disputes. For instance, an agent who repeatedly advised a customer to purchase cyber insurance was left vulnerable when the customer declined coverage but didn’t document the refusal. After a cyber incident caused significant losses, the absence of documentation turned the claim into a “he-said, she-said” scenario.
Keeping Notes and Email Trails
Beyond customer sign-offs, agency notes and emails are invaluable tools. Detailed notes in a management system can chronicle what the customer said, what actions the agency took, and when they occurred.
Emails are equally critical, serving as evidence of exchanges between the agency and the customer. A simple follow-up email confirming a phone or in-person discussion can provide clarity if a customer later claims, “I told the agency to make a change.”
Flood Insurance: A Case Study
Flood insurance often exemplifies the importance of documentation. Customers frequently decline it — until they need it. Others opt for lower premiums without fully understanding the trade-offs in coverage. Documenting every offer, refusal, review, and renewal related to flood coverage can save agencies from significant headaches and potential claims.
In short, clear and thorough documentation is your strongest ally in reducing E&O risks. And while your E&O claims handler is always happy to take your call, we’re confident you’d prefer to avoid making it.
Leveraging a tech-driven AMS tailored for P&C insurance centralizes all document storage, including agents' notes, text messages, emails, and recorded phone calls, within each agent's profile for easy access by the entire team. AAI partner agencies utilize EZLynx to streamline this process, along with a variety of features that enhance efficiency and save time and effort.
Join AAI to get the support you need to market yourself and your independent insurance agency to your target audience, including access to top insurance providers with insurance options for every homeowner. Contact us today for more information.