Assurex E&O Plus | What Do You Want Your Reputation to Be?
20799
post-template-default,single,single-post,postid-20799,single-format-standard,qode-quick-links-1.0,ajax_fade,page_not_loaded,,qode-theme-ver-11.1,qode-theme-bridge,wpb-js-composer js-comp-ver-5.1.1,vc_responsive

What Do You Want Your Reputation to Be?

10 May What Do You Want Your Reputation to Be?

Posted at 09:00h in Pearsall’s Perspective – E&O Plus Tip of the Week by

“If you tell the truth, it becomes a part of your past. If you lie, it becomes a part of your future” — Unidentified author.

Talk to most Agent’s E&O carriers about the type of E&O claims they experience, and sadly, claims involving agents that were not honest with their carriers or their customers will be fairly high on the list. 

For those who believe it is ok to lie to carriers or customers, please do our great industry a favor and find another job. You are hurting the industry, but as the quote above stated, you are also hurting your reputation. As big as the insurance industry is, it is still small, and getting caught lying will affect you for the rest of your career.

Let’s face it – to a large degree, the relationship between your agency and your carriers is heavily built on honesty. The carriers expect that the description of the risk is accurate when you present a risk to them. So as you look to complete the initial application for the marketing of the account, how confident are you that the answers to the questions are 100% accurate? Reviewing the information with the customer is suggested.

There have been several recent E&O claims that involved failure to disclose risk characteristics associated with placements accurately. Issues such as 1) negligent misrepresentation and 2) failure to disclose critical information are unfortunately common.

When the carrier comes back with some additional questions on the risk, as the producer, are you guessing at the correct answer, or are you getting the correct information from the risk you are looking to place?

What are the repercussions when the carrier alleges that your agency has lied about the nature of the risk? There are three common outcomes, all of which are not good.

  • The carrier may rescind the policy, essentially returning any premium dollars. If there has been a loss and the carrier rescinds the policy, your agency could be held responsible.
  • The carrier may pay the claim (if they don’t feel that the customer has been part of the lack of honesty) and then turn around and sue the agency. This scenario has been happening for many years, and it certainly seems to happens more often today.
  • The carrier issues an immediate notice of termination of the agency contract. The carrier feels that they can never trust your agency again. Yes, this happens!

And by the way, you could also get fired and lose your license.

The best practices that every agency salesperson should adhere to include scrupulous attention to:

  • Carrier appetite (especially as defined in their underwriting guidelines)
  • Proper handling of applications
  • Clear communication of risk characteristics
  • All details
  • Clear documentation of ALL conversations with customers/carriers/wholesalers

So what do you want your reputation to be? That’s your decision.