1. Commit to quality
An organization wide commitment to quality service is an essential
ingredient for reducing the risk of E&O liability. Implement the intent through repeated reminders combined with periodic Kaizen events (regularly held meetings attended by the persons involved
in a process intended to review and effect improvements in that process).
2. Provide professional training
A training program not only exhibits a commitment to
quality but also helps keep an organization sharp – both as to internal and external client needs and
3. Understand coverages and policies
Insurance agents and brokers provide a professional
service and are not just order takers. Clients expect knowledge and good advice.
4. Document standard operating procedures and audit compliance with those
Repetitious activities need to follow set work flow and quality procedures to
reduce the risk of errors and omissions. Procedures should cover processes for taking in new
clients, appropriate content and submission of applications, following up on applications, verifying
that coverage was written as ordered, issuance of certificates, cancellations and non-renewals,
and any other regularly performed processes in an insurance agent’s or broker’s office.
5. Monitor for effective communication
Monitor the communication content, style, and
quality of your workers. Poor communication may cause misunderstandings, disputes, and E&O
6. Create accurate records
Devise a good record keeping system and adhere to it. This
helps avoid the “he said, she said” scenario that may contribute to an E&O claim. Inadequate
documentation often increases defense costs and uncertainty in the outcome of E&O claims.
7. Maintain professional relationships
Maintain a professional, cordial relationship with
your clients. Be responsive to inquiries and client attempts to communicate. Treating clients well
can translate into less friction, disputes, and E&O claims.
8. Act as a professional
Being too agreeable and just ordering what the client asks for, can
lead to trouble. As a professional, the Insurance Agent’s or Broker’s best practice would be to
document the offering of a broad range of coverages and efforts to protect the client from
decisions based on price alone. An underinsured client who saved some premium by making a
decision based just on cost can later become an E&O claimant.
9. Respond promptly
When a dispute arises, put the fire out quickly – before it gets worse.
Items not promptly responded to may often become problems and problems that are not
promptly addressed tend to get worse.
10. Work toward resolution and closure
If an E&O claim cannot be avoided, it is not too
late to limit the consequences. Understand the problem from the client’s point of view. Work with
defense counsel and the insurer toward resolution of the issues.