errors and omissions insurance E&O Claim Trends for Insurance Agents & Brokers | Axis Error & Omission
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E&O Claim Trends for Insurance Agents & Brokers


E&O Claim Trends for Insurance Agents & BrokersPinpointing Potential Errors & Omissions Exposures

Errors and Omissions (E&O) coverage for insurance agents and brokers is part of the cost of operating a business.  Equally essential are sound risk management practices that serve to mitigate an agency’s or brokerage’s exposures and minimize the potential for a lawsuit because of alleged negligence or wrongful act in the course of providing professional services. But even with the implementation of Best Practices, including ongoing education and training, unfortunately you or your producers can end up facing an E&O claim.

To assist in mitigating your E&O risks, we’re taking a look at several claim trends as we head into 2014. By reviewing potential pitfalls with your staff, you can help put in place additional measures that help stem potential claims and losses. Recent claims over the past few years have been due to the following:

  • The failure to offer Flood insurance coverage, failing to properly explain how flood coverage works, and offering excess flood insurance. Recent devastating storms over the last several years that have affected areas not typically hit by flood, the expense of flood coverage and other factors have been made this a front-and-center issue.
  • Failure of producers to explain how the audit provision works in a Workers’ Compensation policy.
  • Failure of producers to identify other states’ exposures, to recommend and/or explain other states’ coverage, and to secure other states’ coverage in Workers’ Compensation policies.
  • The misuse of Certificates of Insurance, with producers completing forms improperly. For example, claims have result due to the use of improper language, not listing accurate policy limits, not listing required exclusions/conditions, not listing additional insureds properly, and/or not mailing the certificates to insurance companies.
  • Additional insured endorsements are also at the heart of an increasing number of E&O claims. For example, using the wrong endorsement type, neglecting to inform the insurance carrier of the addition of the endorsement to the policy, or improperly noting the endorsement on certificate of insurances.
  • Data breach security claims and identify theft from hackers or the use of improper security measures concerning non-public private information or personal health information.
  • Failure to secure a signed application with submissions of on-line insurance applications.
  • The placement of business through surplus lines brokers and other wholesalers by retail property and casualty producers, as some producers are unfamiliar with the rules governing surplus lines operations and terms and conditions of non-admitted carriers’ policies.

Axis Insurance Services, LLC specializes in E&O insurance, including for the insurance industry. We provide tailored policies for insurance agencies, MGAs, MGUs, surplus lines organizations and others. We would be happy to review your policy and talk to you about our solutions. Please give us a call at (877) 787-5258.

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Blogged on: January 22, 2014 by Mike Smith
Error Omissions
Error Omissions
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