When evaluating the cause of agents E&O claims, one of the current hotspots deals with the manner in which claims are handled at the agency level. While many agencies have a staff dedicated solely to this function, in other agencies this function is handled by an account exec/CSR as part of their duties. Bottom line, this claims handling task is resulting in a number of E&O claims. From my experience, at least 40 percent of agency E&O claims are caused by this level within the agency.
One common scenario, which probably occurs frequently within virtually every agency, involves a customer calling to advise your agency of a claim but then after discussing it with you, deciding that they do not want to file the claim. This could be because the claim is not much more than the amount of the deductible, or that the customer will lose his loss-free discount, or because of the additional premiums she will have to pay due to a claims surcharge.
Agencies should handle this type of dialogue very carefully. You want to ensure that the conversation is well documented, not only in your agency file but also with some type of written communication back to the customer. The goal or benefit of this additional documentation is to identify any potential misunderstandings between what you said and what they heard or vice versa.
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