BIG ‘ I ’ RESOURCES
• Underwriters will pay closer attention to requests to remove exclusionary endorsements .
• Carriers will likely go back and conduct a close review of their underwriting rules and guidelines regarding required endorsements – required endorsements will no longer be inadvertently left off .
• Carriers using proprietary forms will review all wording to make sure there is NO ambiguity .
• Overall , look for underwriters to clamp down for the foreseeable future .
Errors & Omissions // There are four key E & O trouble spots agents should be paying particular attention to these days : Business Income , Workers ’ Compensation , Commercial Property , and Personal Auto .
Business Income : This one is garnering a lot of attention in the news right now . Anticipate many agents getting pulled into these cases either as an add-on ( insured suing the carrier and just including the agent ) or if attempts against the carrier fail and the insured goes after the agent . The key reason ? Lack of “ pandemic ” coverage .
Workers ’ Compensation : More specifically , what is known as the “ Other States ” issue . Before the prevalence of working from home , if an employee lived in one state but drove to another state to work – it was not a problem because of the “ coming and going ” rule . Now , many employees are working from home – in a state other than the one where their employer is located . Because of the extraterritoriality and reciprocity rules in each state , it may be necessary to list the employee ’ s state on the WC policy to avoid any potential gap in coverage .
Commercial Property : Is a building vacant simply because there is no activity ? It appears the answer is “ no ” in the ISO policy because it is a property-based form – meaning that there is enough property to conduct normal operations . But some forms are activity-based , meaning that the building is or may be considered vacant
E & O RECOMMENDATIONS
Don ’ t let the change of work venue to home affect your due diligence when it comes to E & O . Keep the following E & O recommendations top-of-mind .
5 Don ’ t deny coverage on the carrier ’ s behalf – we saw this early on with business income claims because the carriers were being inundated with losses . Claims adjusting is the carrier ’ s job , not the agent ’ s .
5 Don ’ t advise your insureds whether to turn in a claim or not – this is the insured ’ s option . They have to make the decision .
5 DOCUMENT , DOCUMENT , DOCUMENT all communication with customers and underwriters .
And lastly , don ’ t keep doing what you were doing out of fear that changes look like an admission of guilt . What you do going forward is generally not admissible in court . Agents are expected to change processes when circumstances point to a need for a change .
If there are questions you weren ’ t asking or recommendations you weren ’ t making before , but now you think that you should – make the change immediately . It would be best if you always were refining your process .
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