Best Practices for the E&O Insurance Claims Process

Best Practices for the E&O Insurance Claims Process

Mistakes happen during the course of any business’s operations, and often these mistakes are easily remedied without escalation. However, in the event a mistake leads to an errors and omissions (E&O) claim, it’s crucial for insured party to handle it properly to avoid making a less-than-ideal situation even worse. In fact, not properly responding to an E&O claim can lead to denial of coverage for a claim that would have otherwise been covered. Below are the best practices for the E&O insurance claims process.

Respond Calmly and Professionally

It’s easy to take an E&O claim personally, as it’s often related to the insured’s performance as an agent or professional service provider. However, it’s best not let emotions take over. E&O claims can be brought against even the best agents and agencies, so it’s not necessarily an attack against an agent’s abilities, but rather just an unhappy customer wanting to remedy an unsatisfactory experience. Remaining calm and professional puts the agent or agency in a better position to cooperate with their E&O insurer and legal counsel to resolve the situation.

Notify the E&O Insurer Promptly

Most E&O policies require the insured to notify the insurance carrier of their receipt of a claim as soon as possible. In this case, a claim is defined as any notice of allegations of wrongdoing submitted by a customer or client, including a formal complaint, threat of lawsuit, a letter from an attorney or the actual suit papers. When in doubt, it’s best to report any allegations to the insurer to avoid delaying the claim too long and having coverage denied.

Submit Necessary and Accurate Information

The insurer will ask for specific information in order to conduct their investigation, as well as to prepare a possible defense strategy. It is important to collect any and all relevant documents, correspondence and anything else that might be helpful and present it to the claims representative in chronological order. Never edit or alter the information in any way, even just to add notes, as it could make the accused party look like they are trying to hide something and could void coverage.

Let the Claims Representative Handle It

It may feel like a good idea to reach out to the accusing party and offer to remedy the situation through a refund or payment to cover damages, but once a claim has been filed it is best to not discuss it with anyone other than the claims representative and attorney involved with the claim. Outside comments or gestures of goodwill can be easily misconstrued and even potentially damaging to the case.

E&O claims can be scary and confusing, but obtaining E&O coverage and following these best practices during the claims process can help ensure the case is handled smoothly and efficiently.

About PL Risk

In addition to bringing you the latest news from the insurance industry, PL Risk provides Resources for Agents and Brokers nationwide. We’ve recently implemented Hiscox Now, which allows agents their own access to Hiscox and instant quoting. To learn more about our operations, contact us today at (855) 403-5982.

Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.