Burand’s Agency E&O Blog: Tip #57

Review Renewals. While my recommendation to review renewals might seem so simple that even mentioning it might seem like I’m scratching the bottom of the barrel, I am writing this recommendation because I am seeing too many agencies that are not reviewing their renewals. They are not checking them for coverages or even rates. The reasons for this failure range from specific E&O strategy to lack of resources to greed to pure incompetence.

The E&O strategy involves the idea that insureds have a duty to read their policy and if it is wrong, the agency bears no responsibility. If the agency is a peddler, an order taker, this might actually fly in some states and circumstances. Beyond the fact that agencies employing this strategy are putting their reputation at risk inside and outside the industry, the idea that the duty to read case law is always bullet proof is an example of wishful thinking.

Other agencies are skipping proper renewal reviews because they do not have enough people. Others are cutting people so they make magazine covers and are awarded prizes by consulting firms for high revenues per person. This is pure greed. Last, some agencies do not review renewals due to varying degrees of pure incompetence.

Checking renewals is a key value agencies bring to their clients. Checking renewals is key to protecting agencies against E&O suits. Furthermore, clients do not need agents at renewal if no checking is done. A computer will do the job just fine.

Topics Agencies Professional Liability