Smart Choice and CalSurance Associates welcome you to the Smart Choice E&O Prevention Newsletter, your resource for loss prevention education.
Each quarter, you will receive timely and relevant E&O loss prevention tips you can start using immediately to keep yourself protected while conducting business.
The Devil is in the Details
An insurance agent received a notice of claim and copies of a lawsuit ﬁled against one of his clients. The agent promptly prepared a fax to be sent to the carrier along with the suit papers, gave it to his secretary to send, and left the office for a meeting with a prospect. The secretary placed the documents in the fax machine, hit the "send" button, and later ﬁled the fax conﬁrmation and other documents in the claim ﬁle. When the client called to ascertain the status of the claim 30 days later the agent discovered that the original fax had not gone through to the insurer and resent the documents.
The carrier immediately retained defense counsel who learned that the plaintiff had been granted a six ﬁgure default judgment due to the defendant's failure to timely answer the complaint. Defendant's motion to vacate the default was denied, and a decision was made to settle the claim rather than appeal. A claim was subsequently made against the agent for failure to timely notify the client's carrier of the claim.
E&O Prevention Tip:
Errors of omission — including simple lack of attention to seemingly insigniﬁcant details — can have signiﬁcant consequences. In this scenario, although the agent had initially delegated responsibility for forwarding the claim to the carrier he bore ultimate responsibility to follow up to make sure that his instructions were properly carried out.
Standard agency procedures for handling claims, cancellations. endorsements, renewals, etc. must be established and all agency personnel (including agents) must be made aware of them. Compliance with those procedures should be mandatory for all personnel and should be checked, re-checked and continually monitored. In this case a simple diary system could have disclosed that no carrier acknowledgement of the claim had been received, the error discovered, and notice could have been forwarded in time to prevent the default.
Visit www.calsurance.com/smchoice for more tips and E&O program information.
CalSurance Associates, A Division of Brown & Brown Program Insurance Services, Inc. Domiciled in California, CA License #0B02587
Millennials entering the workforce has been a hot topic of discussion in business for a while now — in fact it’s been over a decade since their generation began infiltrating the workplace! We are currently at a point, where we should be discussing how Millennials have shaped the workforce, rather than what will happen as they enter the industry, because Millennials have been shaping the industry for a number of years now. Check out the 2018 Issue 3 of Smart Choice Magazine for more.