Stay Cool, Calm & Collected: E&O Claim Info

E&O claim infoWhat to do if you have a claim

    • Promptly report any claim or error of concern and provide the necessary details, including name of the claimant and description of the claim or incident. Your E&O carrier can decide if the matter qualifies as a claim or only as an incident.
    • Do not alter records involving the claim or incident
    • Do not allow the inspection, copying or removal of your records without consulting your E&O carrier
    • Do not provide recorded or written statements concerning an error or claim involving your agency unless the E&O carrier has granted permission to do so

    • Do not discuss the matter with anyone other than a representative from your E&O carrier
    • Do not make advance payments without consulting your E&O carrier. Many “goodwill” gestures have backfired on agencies
    • Do not make any admissions of liability. Refer any inquiries to your E&O carrier.
    • Stay Calm! E&O claims happen and a good E&O carrier will provide the peace of mind that you are paying for

Reasons E&O Claims Happen

Failure to Document

As a life and health agent, documentation is extremely important. Communication between your clients and yourself may be the focal point of litigation. If you have failed to document your communications properly, in most cases you will be held liable.


Failure to properly explain policy provisions or unintentionally making mistakes in completing an application for insurance can result in an agent being sued for misrepresentation.

Inadequate Coverage

Allegations can stem from either a total lack of coverage, to inadequate limits of coverage to failure of the agent to properly place adequate insurance.

Breach of Duty

Once an agent agrees to assist in placing coverage, the agent owes a client a duty to place that coverage, if possible. If the agent is unable to or has failed to place the coverage properly or to notify the client within a reasonable amount of time that they are unable to assist, the agent can be found liable for breach of their duty to the client.

Breach of Contract

If an agent fails to place coverage through negligence or oversight or fails to perform, an agent can be held liable for breach of duty as well as breach of contract.

Ways to Reduce E&O exposures

  • Have adequate E&O coverage and an understanding of the E&O policy
  • Act professionally, think defensively
  • Use standardized policies and procedures
  • Put communications in writing
  • Be specific, don’t generalize
  • Stay within your area of expertise
  • Remain current and be sure all employees are trained
  • Be proactive and investigate the companies you represent as part of your due diligence
  • When completing an insurance application with a client, make sure that the client answers the questions and is providing their signature on the application

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