Client Expectations & E&O Claims

For many professions, not meeting client expectations is not just bad service, it can translate to a lawsuit and trigger professional liability insurance. Insurance agents are no different. An article in American Agent & Broker talks about client dissatisfaction and insurance agents E&O claims (see here).

The author suggests instituting a process with agents and CSRs for surfacing client issues to management. In addition to making sure the client service issues are adequately addressed, this proactive approach provides a forum for considering whether a service issue might become a claim and therefore should be reported to the insurance agent’s E&O insurer.

Often it is not clear when a difficult situation should be reported to your professional liability (E&O) insurer. Each professional liability policy has a definition of what constitutes a claim, usually a written demand, and if this trigger has been reached the situation should be reported. In addition, if the trigger in the policy has not been reached, but you know that there is a chance that a situation may result in a claim, the situation should typically be reported to preserve coverage. With respect to a subpoena, the reporting of a potential E&O claim was addressed in a prior post.

The most important advice:

If there is any question if a potential claim should be reported, the best practice is to report the matter to the carrier

source : http://specialtyinsurance.typepad.com/