As we approach summer, natural disasters will impact what is already considered a challenging insurance marketplace for policyholders and industry professionals. The industry has seen an increase in rates and coverage restrictions as carriers look for ways to improve profitability. The key factors that are contributing to these changes are the economy, inflation, supply chain issues, natural disasters and large verdicts.
These exposures make it difficult for insurance agents navigating the industry and emphasize the need to have proper risk management and insurance in place. So, what can an insurance agent do to protect their agency and customers?
Documentation
Documentation might be considered one of the most essential forms of risk management outside of purchasing an errors and omissions (E&O) policy. It is crucial, especially in tougher markets, that agents document conversations and collect coverage rejections in writing.
The changing landscape exposes agencies to E&O claims. As premiums rise, policyholders could be looking to save money by declining coverage or reducing limits. Additionally, various insurance coverages (cyber liability and employment practices liability) are often being rejected by small businesses as they don’t see a need for them. The importance of documentation can’t be understated.
Education and Communication
Beyond professional designations and licensing, learning and understanding what changes insurance companies are making will not only help you mitigate E&O claims, but also demonstrate your proficiency to your customers. With multiple carriers non-renewing books of business in certain states, more business is moving to non-standard or to the excess and surplus lines marketplace. Coverage and form comparison is important, but so is sharing those differences with your customer.
Errors and Omissions Insurance
Insurance is necessary for many insurance agencies to operate, but it also protects agencies from liability. Purchasing an insurance policy and filing it away aren’t all an agency should do to protect itself. Insurance professionals should make sure they are with a financially stable and reputable insurance company. They should be reviewing the coverage enhancements, exclusions and limits of liability to verify the terms and conditions are more than adequate for the book of business the agency handles.
USLI’s Insurance Agents E&O product* is designed for small to midsize insurance agencies in the personal, commercial, and life, accident and health spaces. To learn more about our product, please reach out to a member of our Professional Liability team.
*USLI does not offer/write Insurance Agents E&O for our directly appointed customers.
