19 Jul Listing Exclusions on Your Proposal
It is not uncommon for agencies to list exclusions on the proposals they provide to customers. Essentially, this is designed to impress upon the customer/prospect that various exposures are not covered. In addition, it also serves to prompt some discussion with that customer to indicate that some of these exclusions/exposures can be addressed through purchasing a separate policy or endorsement. A great example is EPLI – Employment Practices Liability Insurance, an exposure typically excluded by a GL policy but which coverage is available in the marketplace.
While listing exclusions does have some merit and serves a purpose, listing all exclusions might “scare” the customer or get them wondering what is covered. For this reason, many agents list those exclusions that they seem to feel are of particular interest or concern for that customer. This can be tricky since a producer may not know which exclusions/exposures are most important to the customer.
There are a couple of approaches to consider. If an agent is going to list exclusions on the insurance proposal, it should be noted that “exclusions include but are not limited to the following.” This approach lets the customer know this is a partial list and to consult the policy for the full list of exclusions. Not including this verbiage might suggest to the customer that the list of exclusions is the “full list.”
Another approach is to include a specimen copy of the policy (it needs to be an exact replica) with the proposal. This approach allows the producer to advise the customer accordingly and possibly review some of the exclusions.
Either approach should demonstrate that there are exclusions that the customer should be aware of, and they (the customer) should advise the producer if any of those exclusions are of concern.