E&O TIP: Policy Checking and Delivery

Ask most agencies where policy checking and delivery rank among daily duties and it is likely not high on the list. Yet it’s not that agents think these are unimportant.

• Some agents believe policies are correct and, if they are not, it’s the carrier’s problem.
• Other agencies report the “quality ratio” is 95% or higher. This sounds impressive, but it means 1 out of 20 policies contains a mistake.
• Many agencies believe the quality of the policy issuance has improved, but these same agencies will state that errors happen and some are significant, such as missing locations or vehicles, incorrect named insureds, etc.
  

Whether the policies are provided in paper or electronic form, it is vital to promptly check for accuracy to ensure the coverage provided meets what your agency requested.

Simply giving policies a quick “once over” will not be detailed or comprehensive enough to identify errors in the policy. A best practice is to use a checklist that is completed and saved in the system, breaking down the checklist by overall issues (named insured, address, effective and expiration dates, policy number, etc.) and by type of coverage. For:

• Property coverage – Verify correct coverage/forms, locations insured, limits for each location, correct list of mortgagees/loss payees, additional coverages or changes requested from the prior policy, etc.
• Liability insurance – Review additional insureds, limits, requested coverage changes, etc.
• Auto policies – Check symbols, list of scheduled vehicles, limits, and any unique exclusions or coverage limitations that need to be brought to the customer’s attention, etc.
• Umbrella – Double-check that underlying insurance limits meet the minimum underlying limits required by the Umbrella. Insufficient underlying limits is a major cause of E&O claims.