E&O Tip: Claim Example – The Importance of Documentation

The agent obtained a signed application from the client for property coverage. The agent advised that the client indicated they had a sprinkler system in place. After a loss, it was discovered that they did not have a proper sprinkler system in place. The client claimed they had not indicated there was a sprinkler system. While the agent had obtained a signed application, they were unable to produce it. The agent had scanned the app to file in their image system and then shredded the original. It was discovered that there was a scan error that prevented the document from filing properly. Since this document was not available, the E&O carrier paid $180,000 to resolve this claim.

Lesson: When filing documents, check to ensure that they are scanned and filed correctly in your imaging system.

Learn more about documentation in our The Good, Bad, and In-Between of Documentation flyer.