Written By: Keegan LaMar, Product Marketing Analyst
When someone asks if you’d rather be reactive or proactive in a risky situation, almost anyone would choose to be proactive, right? Isn’t that the whole reason for insurance? Even in a proactive industry, there’s risk around every corner. And error and omission (E&O) lawsuits are one of these risks.
Expensive, frustrating, and inevitable are often used to describe E&O lawsuits. The risk comes from writing coverage based on what is asked vs. coverage you’re supposed to write. Most agents and brokers are taught how to win lawsuits, but what if you could avoid them all together? So what’s the answer? It starts with becoming a trusted advisor to your customers.
Most customers receive policies for what they ask for, but sometimes agents and brokers need to advocate for what the right coverage is. Now, does this mean you should tell a customer they are wrong, misguided, or don’t know what they need? Absolutely not. This means you open the opportunity to truly understand a customer’s business and you offer what will not only make them feel fully covered, but also protects all parties involved.
The days of only needing a standard package of Commercial Property, Commercial Liability, Umbrella, and Workers’ Compensation are long gone. In addition to these policies, businesses may need Environmental Liability, Employment Practices Liability, Directors and Officers Liability Coverage, Tech & Media Liability, Errors & Omissions Liability, Cyber Liability, and other specialty coverages.
To add a layer of complexity, these types of policies are written on a “claims made” basis, as opposed to an occurrence basis. Such coverage triggers include claims made forms, or claims made and reported forms, some with prior act limitations, prior pending and continuity limitations and reporting requirements. Many of those policies or trigger issues didn’t exist in 1975, but they certainly do now! (1)
Agents and brokers are experts, and always need to arm themselves with the best information to truly offer comprehensive coverage for their customers. Luckily, doing this is easier than you might think. The right reference tool can offer extensive features that can supplement the expertise of a seasoned veteran, or guide an up-and-coming Producer through the arduous process of classifying complex risks.
With this information readily accessible, it’s much safer to become an advisor to your customers, offering security rather than just placing a policy. Perhaps a better quote: “When we don’t give advice, we don’t avoid losing a lawsuit. What’s better, fighting it out or not having a lawsuit at all?”
(1)https://www.insurancejournal.com/news/national/2018/03/21/484013.htm