Even Just Starting Out, Protect Yourself from Professional Liability

Even Just Starting Out, Protect Yourself from Professional Liability

The business of providing personal lines property and casualty coverage might not seem young and hip (let alone terribly exciting), Anthony Andrews conceded, watching a glazed look come over his date’s face when he explained to her what he did for a living. Nevertheless, Andrew would soon learn that the performance of his services were indeed fraught with a level of danger and high stakes that he would have expected to see in a James Bond movie. That was the day when he discovered that his insurance agent professional liability policy was about the best investment he had made to date in the three years Andrew had been open for business.

A close business call

Andrew had to breathe a sigh of relief that he had even purchased a policy. Just starting out on the slimmest of shoestrings in a small rented office that was more like a glorified closet, Andrew had toyed with the possibility of risking the odds and going without the coverage (despite hearing the cries of “hypocrite” and “do as I say, not as I do”) from his subconscious. He reasoned that he wouldn’t need robust coverage until he got some robust clients rather than the cute little newlyweds who came in for a renter’s policy last month. Plus, after paying his rent, his Affordable Healthcare Act premium (that, ironically, wasn’t so affordable), student loans, and all of his living expenses, Andrew had precious little left over.

Mistakes can happen to anyone

A client for whom Andrew had assembled a suite of coverage ended up having a claim that the insurer denied to cover in total, and the amount of the claim that exceeded the limits of the policy was more than $42,000. The client was angry, because he had instructed Andrew to up his coverage limits at the last policy review they’d had. While Andrew had no records or files supporting this instruction, the policyholder happened to have kept a copy of the request (along with Andrew’s hastily sent email saying he would handle it). He was sued, in one of the most common reasons–failure to have consistent, traceable paperwork.

It’s obvious that agents need to take their own advice when it comes to protecting yourself from insurance agent professional liability. Make sure you do so, sooner than later.