What Can You Do to Help with E&o Exposure?

[iiinycboi]

What do you guys do or learned from experience to prevent e&o exposures?

Time-stamp all incoming mail?
document all phone calls? do you write down notes, or summarized time and date?
file everything
back up everything

etc...

i'm looking forward to your list!

 

[Mark]

Just think about Glenn case. If he had a clear tape of what happen with that old lady, none of that would have happen.

 

[GreenSky]

Senior Advisor Indiana reduces his exposure by being too incompetent to write any business.

Rick

 

[Norwayguy]

Just think about Glenn case. If he had a clear tape of what happen with that old lady, none of that would have happen.

Or it could have sunk him. Also if you start taping appointments you almost need to tape them all from that point forward. Or the prosecution will ask why you taped some appointments and not others.

 

[Underwriter2Agent]

My agency makes specified exclusion waivers for all lines of business in addition to the signed documented application. Also all the above mentions are great put it this way with e&o document document document.

I would be happy to show a couple they are simple basic just to make sure i cover my self. PM me.

 

[Norwayguy]

My agency makes specified exclusion waivers for all lines of business in addition to the signed documented application. Also all the above mentions are great put it this way with e&o document document document.

I would be happy to show a couple they are simple basic just to make sure i cover my self. PM me.

How do your carriers feel about your self created waiver forms?

 

[NCAgent]

As long as you don't name a carrier specifically it really shouldn't matter. No one covers flood except I think some odd carriers. Same with earthquake and sink holes. I have exclusion paperwork as well since most policies have similar coverage. I will just strike out the ones that are unnecessary, like if a chubb policy covers flood.

 

[Underwriter2Agent]

We follow the same procedure as Charles, if a carrier provides a specific coverage than I mark N/A.

It does two things for us one protects against E&O and also helps us push additional endorsments, i.e. (jewelry,mold increase, personal property replacement cost etc.)

Its one thing to advise a client they do not carry a specific coverage however by them having to inital or sign it usually will generate curiosity on what the premium difference is.
- - - - - - - - - - - - - - - - - -

How do your carriers feel about your self created waiver forms?

These do not get submitted to the carrier as they usually will have their own waivers when applicable, I keep them on file. I have submitted them with applications in the past as part of the package and have never had a carrier question them.

 

[djs]

So, what do you do when something isn't covered and your waiver doesn't specify it? Do YOU pay the claim?

Here is the scenerio I see happening with self-generated waiver forms:

Judge, my agent had me sign off on the fact floods are not covered. He explained that water pipes breaking are not considered floods, but a river coming through my house (exterior water) would be a flood. I understood that.

I had a water leak that damaged my ceiling and my walls. I called the insurance company and they denied the claim, stating it wasn't sudden and unexpected, that the leak had occured over a period of time.

Judge, I didn't sign a waiver on this type of thing. According to the waiver and exclusions the agent had me sign, this should be covered.

Agent: But Judge, I didn't extend coverages that were not part of the policy....

Judge: Mr. Agent, by trying to only include some exclusions, you generated confusion for the client, therefore, you are liable for this loss. Pay up at Window 3.

E&O Carrier: Huh? No, this is a self-generated form that wasn't approved. We are not paying this claim.

Yes, signing off on lack of coverage is a great idea, but I see it as more of a problem than a benefit. Or at least make sure your exclusion form states that they are examples of coverages not provided and it is the responsibility of the client to read the policy in full, with the policy language overriding the exclusion document.

Dan

 

[NCAgent]

So, what do you do when something isn't covered and your waiver doesn't specify it? Do YOU pay the claim?

Here is the scenerio I see happening with self-generated waiver forms:

Judge, my agent had me sign off on the fact floods are not covered. He explained that water pipes breaking are not considered floods, but a river coming through my house (exterior water) would be a flood. I understood that.

I had a water leak that damaged my ceiling and my walls. I called the insurance company and they denied the claim, stating it wasn't sudden and unexpected, that the leak had occured over a period of time.

Judge, I didn't sign a waiver on this type of thing. According to the waiver and exclusions the agent had me sign, this should be covered.

Agent: But Judge, I didn't extend coverages that were not part of the policy....

Judge: Mr. Agent, by trying to only include some exclusions, you generated confusion for the client, therefore, you are liable for this loss. Pay up at Window 3.

E&O Carrier: Huh? No, this is a self-generated form that wasn't approved. We are not paying this claim.

Yes, signing off on lack of coverage is a great idea, but I see it as more of a problem than a benefit. Or at least make sure your exclusion form states that they are examples of coverages not provided and it is the responsibility of the client to read the policy in full, with the policy language overriding the exclusion document.

Dan

that's what I usually do as well. I don't have a laundry list but I do have some disclaimers such as "read your policy for all exclusions. While this isn't a comprehensive list, here are some of the exclusions found in your policy" and then keep going with them.

I also have a form that they sign saying something to the extent of "I have talked with my insurance agent regarding the policy, have been furnished all documents I have requested including a policy contract, asked all questions that I have relating to the insurance, and feel I can make an informed decision on coverage." I also have things elsewhere that talk about some of the major natural disaster exclusions like flood, earthquake, sinkholes, and internal limits of coverage for things like theft. I say this isn't comprehensive and only the policy contract is able to fully outline it, but these are some examples of common claims that don't get resolved the way a client expected.

It's all about what is reasonable. An agent can get busted for NOT offering flood insurance, earthquake, long-term care if they offer it, and etc., so why should they be busted for making people sign waivers saying it WAS offered? It's hard to juggle too much and not enough info.

I also like the "accept, reject, modify" approach.

You offer them what YOU think is suitable as a minimum amount of coverage. This is typically a 250/500/100 policy with umbrella insurance (2M at least), flood to full limits, homeowners compliant with the umbrella, and etc. If the client wants it, you're set. If they don't, they select "modify" and if they were offered something and flat-out don't want to do business with you, then select "reject."

Truthfully, there is no way to really be adequately covered unless you talk to a lawyer, have them draft the forms, get them approved by your E&O carrier, and then have a client sign every one of them every time and have them saved in 2-3 locations in case something happens to one (a fire takes down your computer and hard copy, you're in trouble with the courts for not having the documentation safely secured elsewhere according to some things I read). Most people aren't willing to do that.

I think the other good approach is just having the client sign something only if things are UNUSUAL for a policy. One client wanted a 50k deductible and wouldn't take the insurance without it because he never used it in 25 years. My producer said no, but it was a larger account. I said "sure, but sign this letter stating you know it is a 50k deductible and that you understand you can pay 50k for a total loss and that you were offered deductibles as low as 500 or 1k." THAT can get you in trouble, not a client getting mad that they didn't have higher limits of stolen silverware.