Thursday, May 31, 2012

Agency E&O–Steps Toward Prevention

Ram and Steps Palm Springs CA

This is an artist’s creative rendering of a ram, with a landscape mural painted on its body, located outside at the Palm Springs (CA) International Airport. I can’t recall when this was taken – several years ago – so it’s possible “Mr. Ram” is gone now. I was actually looking for a photo with “steps” in it, and while the plants are in a “stepped” wall in the background, I just had to use the photo. I like it, and at the same time I can’t help but think “E&O”. You?


I just read an Insurance Journal blog post by a consultant (Chris Burand, Burand & Associates) and thought his comments/ideas are worth repeating. The basis of his post is that agents may be opening themselves up to E&O by not getting current underwriting information on renewals. The reasons for that are many, but could include:

  • No one asks the insured for updated info! This is perhaps even more likely when the policy is an “automatic” renewal, i.e. the carrier is really not asking for much in the way of info to be able to issue a renewal policy. That’s convenient but may not be the best way to protect your agency or your client.
  • The Insured isn’t all that interested in responding to another insurance information request (“…again? we just talked about this a few months ago…”), and the agency personnel that have the relationship to get the info aren’t involved, don’t want to take the time and effort, no one lets them know, etc.
  • The renewal info comes back and while it contains information that is in fact new or different, the renewal info is not compared to what’s in file from prior years.

The point is also made that if the agency is asking for updated information and discovers new or uncovered exposures, it may mean additional opportunities to provide coverage. That’s good for possible additional revenue production, as well as E&O prevention.

It would be nice if there was one simple form to use for every renewal, and of course there isn’t, but that isn’t a good reason not to make an attempt to develop renewal checklists that are meaningful. Your agency may already have done this, which is great, but it may have been several years ago. It could be time to take a hard look at those older forms.