10 ways to prevent an E&O claim from happening

Guest contributor Chris Hidalgo from Gallagher MGA writes about how important documenting every interaction with your client is for managing error and omission risk. Find a link at the end of the post for a special discount offer available only through RB Insurance.

As a life and health agent, it’s important to know your customer and know the process behind how you plan to enroll your customer. Is it a worksite enrollment, a visit to a home? Is your customer a direct mail or a call center lead? Each potential enrollment situation has its own set of criteria and potential E & O exposures.

Here are 10 tips for keeping you — and your business — safe from a claim.

1.  Always document the outcomes of key client conversations, decisions made and coverages declined. No client interaction is irrelevant. Document every call or conversation, no matter how inconsequential the subject matter.
2. Understand your customer, anticipate questions, have literature available and be patient.
3.  Stay current on regulatory requirements by continuing to earn appropriate designations and attending professional development courses.
4. Practice full disclosure and be totally up front about your track record, business practices, and affiliated advisors and companies.
5. Assess your client’s risk tolerance. Take the time to fully understand his or her situation. Uncover and document all relevant acts.
6. Send a written confirmation with a copy of the insured’s application. Be sure your customer knows what they purchased.
7. Make sure clients understand what their product covers and doesn’t cover as well as all moving parts, fees and expenses and any underlying risk and guarantees. Include product brochures if possible.
8. Don’t generalize what the product offers. Avoid using common statements like “This policy is just as good as the old one.
9. Discuss payment terms: monthly, quarterly, annual, etc. Make sure your customer knows when to expect the payment to be processed.
10. If a client is unhappy with you, do your best to promptly resolve their complaint before it turns into a regulator sanction or lawsuit.

Chris Hidalgo is currently the Mass Communication Specialist for Gallagher MGA, an international insurance brokerage company with an office in Lakewood Ranch, Fla. Chris has been writing articles for Gallagher MGA informing agents about the latest news in the insurance industry since 2012.  He has a bachelor’s degree in mass communications from the University of South Florida, where he interned at Bluewater Media, LLC, and served as writer, producer, videographer and teleprompter operator for Florida Focus, a newscast that aired daily throughout the Tampa Bay area on WUSF-TV. 

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