7 Tips to Remember When Moving
a Client's Coverage to a New Carrier
Failure to mirror coverage when moving a client, whether new business or a renewal, to a new carrier is one of the most significant reasons for an E&O claim. A common scenario is when the insured suffers a loss that would have been covered by the prior carrier, but is not by the new carrier. This turns into an E&O claim against the insurance agent.
WHAT CAN YOU DO?
The actions you take during the quoting process can help or hurt you. The following tips can help:
- Do not assume the current coverage is still sufficient to meet the client’s needs. Conduct an exposure analysis to capture any new coverage needs.
- Review the current coverage carefully for sub-limits and any coverages granted by endorsement. Request coverage that matches or expands these coverages.
- Note differences in coverage, limits/sub-limits, and endorsements to the client in writing when you receive the quote. If this is discussed verbally, memorialize it back to the client in writing to protect your agency from accusations that this wasn’t discussed.
- Provide clear proposals and specimen policy forms/endorsements. Indicate to the client that they should review them and contact you if they have questions or concerns about coverage levels.
- Highlight any changes to how payments are handled that could impact the client receiving a payment in a timely manner.
- Thoroughly review what you receive from the carrier. There may be changes to coverage from one year to the next even if you are renewing coverage with the same carrier. E&S placements can make changes to coverage without communicating this to the insured or the agent.
- Get the client’s written approval of the terms to be bound. This is particularly important when a client chooses to reduce coverage in the interest of premium savings.