Burand Agency E&O Blog: Tip #4

Do you ever advise your clients the company issued their policy with errors so you’ll send it to them once the company reissues the policy with corrections? The exposure this seemingly good customer service creates is significant. First, if the agency typically relies, even partially, on some belief that it is the customer’s duty to read their policy to protect the agency against E&O claims, exactly what does the client have to read in the event of a claim before the corrected policy is mailed to them?

Second, what happens if the insurance company receives a claim before the policy is corrected that is relative to the error and decides not to correct the policy? It happens!

When policies arrive with errors, do not hold onto the policy. Send it to the customer as soon as your internal checking procedure is complete. Let the customer know an error exists and you will work to correct the error, but for the time being, the coverage is what the policy states it is. When you discuss the error with the carrier, make sure to get the underwriter’s agreement, in writing, they agree with the error and will endeavor to correct it as soon as possible. In some instances, an underwriter may even agree to extend coverage immediately, before the error has been corrected. This is a great solution but never take their verbal word. Get it in writing!