5 Ways Independent Agents Can Reduce The Risk of E&O Claims


All businesses that provide a service to clients for a fee may be susceptible to E&O (errors and omissions) exposure. 

Preparing for what may happen if the project is completed incorrectly, impacts your clients monetarily, or significantly harms your client’s reputation can mean the difference between your company’s livelihood or downfall. 

Here are 5 ways independent agents can avoid E&O claims

1 / Train your team

Of utmost importance, insurance agents must take the time to train their team on the correct method for insuring customers.

Ensure all staff members have the tools and resources they need to successfully support their clients. 

In addition, offering continuing education opportunities allows your team to stay up-to-date on the latest trends and efficiencies in the industry.

2 / Identify customers’ risk exposure

Do not fail to identify and protect a customer’s risk exposure, which includes any potential loss from business activities. 

Learn the types of risk exposure to which your clients are most susceptible and the formula for calculating potential losses.

3 / Standardize procedures to keep your office running smoothly

Consider automating specific processes that will keep data organized, clear and concise, and readily available. 

“The more policies and procedures your agency has in place, the more things will happen for the better,” said Zach Hirsch, Founder of Hirsch Professional Liability Brokerage.

4 / Perform due diligence

Research the carrier and their products. Take time to figure out who and what you’re dealing with. Know their rating. Speak to a claims representative to understand how their claims are handled.

5 / Document, document, document! 

Things can easily slip through the cracks when details are not properly documented. Cover your tracks to ensure there is no question about what the client has requested.

Additional tips for reducing E&O exposure

According to Hirsch, 25% of insurance claims are caused by a simple failure to procure the requested coverage.

But minimizing E&O exposure can be easier than it seems with intentional planning and conscious effort.

Here are some guidelines to consider implementing:

  • Use a comprehensive questionnaire for new clients and renewals. Ask specific questions that help you uncover every detail that you will need to develop an accurate quote.
  • Ask clients to sign a form when declining coverage. Doing so provides extra protection and ensures you have written documentation that defines their choices.
  • Document all activities in an application management system (AMS). Detailed records are a means for keeping information at your fingertips and allow you to refer to the information as often as necessary. A robust system offers extensive fields that can be customized to your needs.
  • Create a set of standard operating procedures (SOPs) that include forms and checklists. SOPs serve as a guidebook and training material for team members and are especially helpful during the onboarding process. SOPs should be reviewed and updated regularly.
  • Write lines of coverage that are within your expertise. Plain and simple, stay in your wheelhouse. Do not offer products or services that are outside of your scope and for which you cannot provide clear and accurate guidance.
  • Offer continuing education for producers, CSRs, and other staff members. Knowledge is power. The more you have, the better you can serve your clients.
  • Purchase E&O liability insurance for your agency. Practice what you preach and protect yourself in the same way you insure your clients.

Assistance for reducing E&O exposure

RiskAdvisor helps independent insurance agencies collect comprehensive customer data while simplifying the quoting and renewal process.

Through an intuitive digital form, clients are prompted with the right questions that allow you to collect data to prepare the proper insurance quote for your clients’ needs. 

Using smart form technology, RiskAdvisor also initiates sub-questions based on responses to the initial questions to gain even more accurate insight. Simply put, with RiskAdvisor you’ll spend less time gathering information and more time serving your clients.

When it comes to E&O, the best way to avoid risk is to ensure that you have the proper precautions in place, including accurate documentation. 

Capture Better Prospect & Client Data While Reducing Your E&O Exposure

RiskAdvisor makes the current landscape of insurance raters and form solutions look exactly like they are — extremely fragmented and complicated. With RiskAdvisor, you’ll have a dead simple solution that allows you to capture client data accurately, the first time, and every time.

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