A Look Through the E&O Lens | Part 1

Magnifying Glass Over Contract PapersIt’s easy to look upon E & O insurance as simply a requirement for doing business in your agency, however, the reality behind E & O claims is complex and eye-opening. In a 3-part blog series, we’ll take a look at various scenarios which prove the criticality of E & O coverage. As an agent, your responsibilities are innumerable. This important protection eliminates some of the headaches that could pop up, no matter how diligent you are in your day-to-day dealings.


E & O Claim 1:  An agent was accused of recommending an improper life policy for her clients. The clients claimed that the agent convinced them to surrender their 10 year, $250,000 life policy, which they purchased in 2008. According to the clients, the agent replaced that policy with a Joint Last-to-Die contract that would not serve the needs of the family. The clients discovered that they would not have enough money to fund the premiums and purported that the agent convinced them to refinance their home and subsequently use $10,000 to fund the policy.


According to the agent, the Joint Last-to-Die Policy (JLTD) was part of a larger financial plan for the clients that included a permanent life policy. The agent initially recommended a Joint First-to-Die policy, however the insurer denied the application for reasons related to the wife. The insurer offered two alternatives: a single permanent life policy, or a JLTD with one life excluded. The clients accepted the JLTD and opted to review the account in one year. Ultimately, the clients were unhappy with the product and level of service. The matter was submitted to insurance and the E&O carrier worked with the life insurer to show that the client didn’t lose any money or value by choosing a JLTD policy. The investigation by the E & O carrier showed that the client was able to pay the premium and received the benefit of the insurance for one year. The clients’ claim was rejected and no payment was made to them.


Have you ever considered “buyer’s remorse” on the part of a client, or even a lack of full understanding regarding a policy as a matter that could trigger an E & O claim?  It is one of many reasons this coverage protects you and your business.

Gratitude is just smart business practice

Thank you held in handWhile this is the month for giving thanks, a strong case can be made for the act of gratitude being something we employ every day of the year. In your insurance business, what are you grateful for? Is it the opportunity to work in a field where you excel? Is it recent victories in your marketing and branding efforts? Perhaps it’s the support staff that keeps things running seamlessly for you.

In addition to these important components of your business, never forget to thank your clients. In fact, making a regular practice to reach out to one client each day with a message of appreciation can go a very long way in securing additional good will, references, and increased business for you. People like people who like them. It’s a basic tenet of human nature. Think about the ease of application you experienced when applying for the A+ E&O Insurance Program and your ability to obtain your E&O Certificate of Insurance almost instantly when paying by credit card. If you have experienced clients that worked with you during their application process and made it flow smoothly, be sure to let them know that it was a pleasure and a privilege to handle their insurance needs. Customers and clients want to feel valued and understood.

How much of a difference could it make to your business if you took ten minutes each day to send a thank you email or hand written note to a client? Choose those beyond your big accounts….pick an individual who may not even provide very much to your revenue stream, and chances are strong that you’ll be pleasantly surprised when he or she contacts you to buy additional coverage because you are now top-of-mind.

It’s a simple action that can pay huge dividends. In our fast-paced, get-it-done-yesterday world, clients are used to a simple – perhaps even write – “thank you” at the end of their first transaction. Surprise and impress them by thanking them on any random day for their business. Acknowledge that you would not be where you are without them and they will surely go out of their way to refer you to their network and bring you more business. Pay it forward with a heart-felt thank you!

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