Insurance agents and brokers have seen some softening in the market for insurance agents professional liability (E&O) despite increasing exposures and claims. A recent article in American Agent & Broker provides an excellent summary of the segment (see here), so a short sabbatical from our sabbatical is warranted.
The article starts with a key point:
There are two types of insurance agencies: those that have had E&O claims and those that are going to
Another key point is made in a more roundabout way: virtually all agents E&O claims are avoidable or defensible if proper procedures and documentation are in place. Since the average agents E&O claim is over $25,000, and since claims significantly impact premium, putting effort into loss prevention is imperative. Important loss prevention techniques include:
Documentation is your best defense
Have a well documented procedures manual
Monitor to ensure compliance with procedures
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