E&O Tips

E&O TIP: Best Practices When Handling Applications

Utica National Insurance Group E&O Risk Management

An insurance application is one of the most important documents that an agency will handle. This document can play a key role should a problem develop with a client’s coverage. Agencies should have procedures in place to ensure uniform handling of applications, which can help avoid action against the agency when a problem arises.

What can you do?

  • Request the application from the client with sufficient time to evaluate and market the risk.
  • Do not delay submitting the application to the carrier(s).  
  • Use the application the carrier will require for binding, whenever possible. While ACORD forms or other applications may be used for an estimate, this leaves the possibility that terms and conditions may change once the binding application is received.  
  • Get a currently completed application first if you are remarketing a renewal. Using a previous year’s application can lead to problems as the data may not be an accurate reflection of the current state of the risk.  
  • Have the client complete the application, when possible, to avoid accusations that the information on the application is not what was provided to the agent. If you must complete the application for the client:
    • Ask all questions exactly as stated on the application.
    • Have the client review the application prior to any coverage being bound and have them confirm, in writing, that the information is accurate.
    • Address any incomplete information. Never guess or use default answers for common questions.
  • Always secure a signature from the client on the application. When requesting the signature, instruct the client to review the application for accuracy prior to signing. Never sign an application on behalf of the client.