Mitigating E&O Risks: Policy Checking
Ask any E&O claim handler the number one way to avoid E&O claims and they will likely recommend a workflow for reviewing policies against applications and exposure reviews. Double-checking the accuracy of an insurance policy is crucial because even small errors or omissions can lead to major financial and legal consequences.
Whether you have an individual or role responsible or you are using one of the many new AI tools, here are some reasons to review an insurance policy:
- Avoid Coverage Gaps
Mistakes in policy details—such as incorrect coverage amounts, missing endorsements, or exclusions—could leave your client underinsured when financial protection is needed most. If an error goes unnoticed, your client might assume they’re covered for something they’re not.
- Prevent Denied Claims
Insurance companies are strict about policy details. If there’s a discrepancy—like incorrect personal information, misclassified property use, or outdated beneficiary designations—it could result in claim delays or outright denials.
- Ensure Proper Premium Costs
A quick review of the premium amount could alert you to an error in the policy. If your client is overpaying or underpaying, their policy may have discrepancies. If you discover an error after years of underpaying due to a mistake, the premium increase could be dramatic, or the client could even be canceled.
- Legal & Compliance Issues
Certain policies, such as auto or business insurance, must meet state or industry regulations. Any errors could mean non-compliance, potentially resulting in fines or loss of coverage.
What to Double-Check in Your Policy
- Names & Personal Information: Ensure all names, addresses, and identifying details are correct.
- Coverage Limits & Deductibles: Verify that the amounts match your client’s expectations and needs.
- Policy Exclusions & Conditions: Understand what is not covered to avoid surprises.
- Beneficiary Information: Ensure the right individuals or entities are listed.
- Premium Amounts & Payment Schedule: Check that the premium seems accurate for the client’s needs and exposures.
Looking for more information about tools that help with policy checking? Reach out to the team at Virtual Agency Solutions or go to http://www.catalyit.com and search “policy checking”. Catalyit has partnered with top technology companies, such as Exdion, to help agencies find an affordable solution for automating the policy checking process.
Mallory Cornell, MBA
Vice President, Virtual Agency Solutions at the IIAW
www.virtualagencysolutions.com