Savvy business owners are always on the lookout for new business opportunities. As client service professionals running insurance agencies or law firms, we are no different. Discovering ways to generate additional revenue, through new or existing clients, is an important part of what we do. Nobody likes to turn away business. We have to be profitable to survive, and reducing costs can only increase profits to a certain extent. But when it comes to avoiding E&O claims, the most effective strategy is to avoid certain clients altogether.
Whether he is called a “problem client” or a “dangerous client,” he can take many forms and likes to invade all professional services industries. It doesn't matter to him if you are an insurance broker, lawyer, property manager, or hair stylist. If allowed, he will find a way to dominate your time, give you countless headaches, and provide relatively little income when compared to the hassle of dealing with him. He will also be the first one to sue you when – not if — something goes wrong or is not to his satisfaction.
Dangerous clients increase your risk of E&O claims in two ways:
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