01 Feb Wouldn’t It Be Nice to Have “Mulligans” in E&O?
With golf season on the horizon, the subject of mulligans is sure to come up. In golf, a mulligan is a do-over. If a casual golfer (not a pro) hits a bad shot, they can call a mulligan and hit the shot over. The premise is that the second shot will be better than the first, and the first shot won’t count. In some charity golf tournaments, you can buy mulligans. There is a limit to the number of mulligans you get, if any.
Wouldn’t it be nice to have mulligans in errors and omissions? After an E&O claim is made, the producer or account exec could get a mulligan – a do-over – to fix things. For example, if there was no documentation in the file or the documentation is not at the level it should be. Possibly, the issue involves a producer that misspoke as to how coverage would apply; they could go back, correct themselves, and all would be forgiven.
In an E&O claim a couple of years ago, a customer service representative indicated that she had spoken with a restaurant owner about the need for liquor liability during the trial. Still, when asked where the documentation of the conversation was, she admitted, “I can’t document everything. If I did, I would never get any work done.” As a result, there were no notes in the system reflecting any discussion on the offer and declination of the liquor liability coverage. In all probability, the bar owner knew he did not have coverage for liquor claims. Still, with nothing documented, the legal system found the agent liable, and a settlement was reached. Yes, the agent lost.
Do you think the producer and CSR wish they had a couple of mulligans to fix some areas after the claim was made against them? Without a doubt – but that’s not the way it works. When an E&O claim is made against an agency, the file “is what it is.” No do-overs!
So what does this essentially mean? It means when agency staff – producers, customer service representatives, accounting folks, receptionists, etc. – performs a particular task, it gets documented if the task should be documented.
Clearly, the odds of an agency prevailing in an E&O matter are strengthened when documentation in the file is handled promptly, professionally, and accurately. The odds are also enhanced significantly when the file reflects documentation to the customer, memorializing the various conversations and decisions.
Agencies and their staff must be extremely serious about this and make every effort to have a culture and commitment that tolerates nothing but the best. In the world of agents E&O, unfortunately, there are no mulligans.