Are You Providing Loss Control Services for Your Clients?

12 Apr Are You Providing Loss Control Services for Your Clients?

Today, certainly more so than in the past, as agencies look to expand their value-added services, they are providing some degree of loss control/risk management services. As one can imagine, this brings with it heightened E&O claim potential. While the number of E&O claims arising from loss control is few, they happen.

Here are some suggestions for those agencies involved in or considering providing loss control services.

• Confirm you have coverage for this activity. This will typically be addressed in the definition of covered “professional services.” While there is probably coverage for this activity, check to verify if there are any restrictions, like whether coverage only applies for policies written or placed by the agency. Essentially, this means that if you are providing this service for non-clients, the agency would have no coverage. Also, if you are providing (as an example) some property loss control services for a client but you don’t write the property coverage, the agency could have no E&O protection.

• If the agency is providing loss control services, whether on a fee basis or not, this can raise the legal standard that the agency could be held to. When providing loss control services, the agency should have a document provided to the client (and signed by them) that clearly defines what services are being provided and at what fee, if applicable. This document aims to address any potential misunderstanding between the client and the agency as to what services are to be performed. The description of services performed should be detailed and include any service cost.

• The document mentioned above should contain a disclaimer that would protect the agency in the event of an E&O claim. Issues that should be included:

1. That the loss control services of the agency are not to be construed as a total review of any and all possible hazards of the client.
2. The agency assumes no responsibility for the control or correction of conditions or practices existing at the premises, whether reviewed or not.
3. The agency does not warrant that the completion of the loss control services will ensure that the operations are safe and healthful or are in compliance with any laws, regulations, codes, or standards.

Taking some of these extra precautions could be beneficial if a problem develops.