Burand’s Agency E&O Blog: Tip #32

AOR/BOR Procedures. If the current agent is so good, why is the insured moving their policy?

AOR/BOR selling strategies have increased in popularity exponentially over the last decade. Some sales consultants and producers also like the strategy because they think it is faster. Rather than completing new applications, they just ask the insurance company to change the code. This is a huge E&O exposure. When taking over an account on an AOR or BOR letter, a producer must completely reunderwrite the risk including obtaining all the data they would obtain writing a new risk in the traditional manner. Otherwise, the agency may be acquiring all the old agency’s E&O errors. If the old agency was so good and did not make any errors, why would the insured be moving the business? Do you really want to assume the old agency’s mistakes?