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Don't screw up and put E&O coverage on the back burner
In today's market-any market, for that matter-busy principals often relegate agency E&O coverage and risk management to the back burner. That's not a good idea, especially now, as exposures are growing and market conditions offer broad protection at a reasonable price.
"The insurance agents E&O market continues to be soft, with renewal business being quoted at or below the risk's expiring rate," explains Frank Huver, senior vice president and chief financial officer at Rockwood Programs. "Increased competition has caused some markets to differentiate themselves by including certain product enhancements, such as cyber liability and data breach, first-dollar defense, and supplemental defense."
Amid the soft market, agents are facing similar emerging exposures as their clients. "Dealing with issues like cyber liability, social media, drones, and ride-sharing programs, for example, requires agencies to stay up to date with new coverage offerings and restrictions," says Todd Stevenson, underwriting manager for the Liberty Mutual Insurance Agents E&O Program. "And they need to communicate these to their clients." He recommends the use of coverage checklists, renewal reviews, newsletters, and other types of client interactions to address the exposures.
Agencies need to deal with privacy issues and improper disclosure of personal and confidential information, which are making the news these days. "This relates to the agency's computer network, so the agency needs to be sure it has proper firewalls and protocols in place," explains Wendy Johnston, senior vice president and professional lines broker at AmWINS Brokerage of Texas. "But it also has to do with leaving paper files out in the open, where private or confidential information can be seen by clients or vendors."
Stevenson also stresses the importance of dealing with cyber liability. "Agents and brokers need to make sure their IT vendor or department keeps all software programs updated and that firewalls and virus and malware protection are current," he declares. "They also need to educate employees about what should and should not be downloaded and posted on social media, and make sure appropriate security measures are in place when working outside the office."
Agency hiring of experienced part-time employees is another trend that carries possible exposure. "As the Baby Boomer generation begins to enter retirement...