Assurex E&O Plus | BORs
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BORs

25 Oct BORs

Posted at 08:49h in Pearsall’s Perspective – E&O Plus Tip of the Week by

For most agencies, a Broker of Record (BOR) is a common way of attracting new business. This can come from your expertise in identifying some uninsured exposures or because the client outgrew the expertise and capabilities of their current broker. When you successfully secure an account via BOR, it is important to understand that there is still work to be done.

The procedure manual for every agency should include a section detailing the expectations of how BORs are to be handled and who is to perform those key tasks. This practice will play a key role in helping to avoid E&O issues moving forward. Quite honestly, I have encountered many agencies (non-E&O Plus) that, upon securing an account via BOR, essentially just renewed the account “as is.” The trouble with this approach is that you could simply be duplicating the mistakes of the prior agent. Some of the key issues to build into your procedures include:

  • To perform a comprehensive review of the “new” client. Ideally, you should complete an exposure analysis review to determine the current exposures, which are insured and which are not. New applications should be completed, as this is typically a requirement of the carrier.

 

  • Suppose time does not allow the proper exposure analysis before the effective date of coverage. In that case, your agency should send a letter to the client stating that the agency is not responsible for any deficiencies on the present program and will not assume any responsibilities until the agency has had the necessary time to review the program and provide suggestions to be considered. The client should sign this letter as acknowledgment.

 

  • If the signed BOR letter was secured before the effective date of the renewal coverage, this does not necessarily mean the agency is recognized as the agent of record. It is best to check with the carrier to determine when you are officially recognized as the broker of record. As you are aware, the current agency is allowed a certain number of days to secure a rescission of the broker of record. An agency should check with its insurers for rules regarding BOR / Agency of Record.

 

BORs are a common way to secure business. For this reason, be sure to have procedures and a solid understanding of the key issues that need to be taken.