02 Nov How to Win an E&O Claim
Most E&O carriers will probably advise you that with the right set of facts, you (the agent) have an excellent chance of winning an E&O claim. In fact, due to the heightened focus in E&O loss prevention, agents are winning over 60% of E&O claims brought against them.
In case how you are wondering how to win an E&O case, the following is a great true story:
An agent procured property coverage for a client who operated his business out of a warehouse. The limits for the building, business personal property, and stock were based on numbers that the client provided. The agent documented in the file that this was the source of the limits. He also suggested in writing to the client that he have the replacement cost appraised by a qualified contractor to assure limits sufficiency. He also reviewed stock and other property values to make sure the limits were adequate. The agent pointed out the policy had an 80% co-insurance clause.
Shortly after, the agent was in the neighborhood and saw the warehouse. He could tell by looking at it that the premises were significantly underinsured. He immediately wrote again to the client and advised him to review his property limits. He also called the client, left a voicemail, and documented in the file that the call had been placed. He received no response. A short time later, the property was destroyed by a fire. When the resulting claim was adjusted, limits were short by over $500,000 and the client sued the agent. The attorney defending the claim took the client’s deposition and the client admitted that he had received the agent’s letter and did not act, although he claimed the agent should have been more persistent.
With the letters and documentation, the agent’s attorney filed a motion for summary judgment and the court dismissed the claim. Not only was there was no settlement, but the case did not have to go to trial and legal fees were minimal. Documentation saved the day.
Yes, documentation saved the day. This was a tremendous job done by the agent documenting virtually every step in the process. So, when the claim was brought against him, he was able to turn over a file that told a great story.
What type of story are your files telling?