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Once upon a time, if you were a knowledgeable, ethical insurance professional, you didn't have to worry overmuch about being sued by your clients. Or by the insurance companies you represented. In light of ongoing changes in the insurance industry and the volatility of the economy, insurance producers and CSRs these days are finding themselves increasingly vulnerable to errors and omissions claims.
Not only are the policy provisions and exclusions of our insurance agents' E&O policies changing (and not to our collective advantage), but the standard of care to which we're being held is changing drastically. I remember a time when policyholders were expected to read, or at least skim through, their policies. That time is long gone.
Since 2007, several national E&O carriers have shared details of their losses with me so I could provide up-to-date facts and statistics in the insurance continuing education seminars I conduct and the courses I write. Some of these stories are nothing short of outrageous. One client won a case against an agency because he alleged that the workers compensation audit provision wasn't explained sufficiently at the time coverage was written. The agency hadn't asked the client to sign a document stating that he understood the audit provision.
Another claim was settled against an agent because, although the policyholder signed a waiver indicating she understood that the uninsured motorist limits in her personal auto policy were less than her BI limits, the agency couldn't show that the agent had offered higher UM limits, along with pricing.
Other claims are equally outrageous. In one case, a client called the agency and asked to remove two buildings from a commercial property policy because he couldn't afford the premium. The CSR deleted the locations without securing a signed request from the...