Experts announce 4 important actions for agents to prevent E&O claims

E&O InsuranceExperts in the insurance industry have released a list of 4 important actions for agents to take in order to help them avoid errors and omissions (E&O) claims.

E&O claims are one of the banes of the existence of insurers. They are time consuming and costly. Most commonly, they result from times when an insurance agent becomes drawn into a dispute going on between the insured and the policy holder. Should a lawsuit ensue, the agents are often named among those who are at fault.

For this reason, experts in the industry have developed recommendations for agents in order to help to prevent costly and frustrating problems with E&O claims.

The first step is to take out E&O coverage. As an insurer, agents should know the difference that an applicable policy can make. Considering the fact that the average E&O lawsuit settlement is about $16,000, and one in every seven agents will be named in an E&O lawsuit at some point in their careers, a policy to protect them has become the top recommendation.

The second step is to ensure regular communication with clients in order to minimize the possibility of being sued. Building a relationship with the customer and treating him or her respectfully will create a feeling that the agent cares. It is important to answer calls very promptly – especially in times of emergency. This decreases the chances of being sued and gives the customer’s attorney less fodder for the case should a lawsuit occur.

The third step is for an insurance office to establish strict procedures and policies which must be followed by everyone within that office. Among the procedures and policies should be those regarding communication and its documentation as well as how money is handled.

Lastly, should you find that a lawsuit is unavoidable, make sure that your lawyer is one who is experienced with this type of representation.

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