Assurex E&O Plus | Ethics: Is It the Same as E&O Loss Prevention?
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Ethics: Is It the Same as E&O Loss Prevention?

24 May Ethics: Is It the Same as E&O Loss Prevention?

Posted at 08:54h in Pearsall’s Perspective – E&O Plus Tip of the Week by

At one time, I wondered why many state insurance departments didn’t allow an E&O class to count towards the state-specific ethics requirement. After all, doing the right thing in many cases is both ethical and a solid best practice from an E&O loss prevention standpoint. However, it would appear that ethics (defined by some as the moral principles that govern a person’s or group’s behavior) is much more than E&O loss prevention and E&O loss prevention encompasses much more than ethics.

There are some similarities, however. For example, is it ethical to sign a client’s name to a document? I would personally not think so, but maybe this issue is not as black and white as one might think. Signing a client’s name to a document is never suggested from an E&O perspective.

How about the situation where you, as the agent, stretch the truth in an attempt to get an account written with one of your carriers? I would be the first to state that this does not sound ethical and is certainly not suggested from an E&O standpoint. Dealing with your carriers in a totally honest fashion sounds like it is a solid best practice and meets an Ethics “rule.”

However, not everything related to E&O loss prevention deals with ethics. As the agency CSR, if you don’t document the file noting the rejection of coverage from the client, have you breached some element of ethics? While this is a key E&O loss prevention issue, it does not deal with an issue of morality. Is it wrong not to enter the information in the system? Yes, but that does necessarily make it unethical.

Most, if not all, state insurance departments have rules/standards that they expect you to comply with that deal with ethical behavior. It is fair to say that just because you measure up successfully with the various E&O loss prevention best practices, this does not mean that you are complying and meeting your state’s ethical standards and rules.

So how well are the staff in your agency measuring up from an ethics standpoint? It is probably best for all to attend an Ethics class to find out.