The key to a client-agent relationship is the client’s trust that you will monitor insurance coverage and provide guidance to protect the client’s financial health. Still, there are circumstances when you might not procure the correct coverage. In that case, when a loss happens, the client would be responsible for financial damages.

If the client feels you are at fault, she or he could take legal action. Cases like this comprise a substantial percentage of E&O claims against insurance agents. You can avoid a similar situation with the following steps:

Failure to correctly explain coverage

If you’ve followed the practices outlined above to ensure proper coverage, you are already on the right path to protect yourself from E&O claims. But there are a few other steps to make sure your clients are aware of all the factors that could affect coverage:

Administrative errors

Mistakes happen, especially when you are working with different software programs for new policies, maintenance, and renewals. One way to minimize the risk of claims against insurance agents is to reduce the number of people who work with a client throughout the customer journey.

Many of us know the old game “Telephone” – where information is passed by whispering in the ear of one person to the next. Inevitably, the message is distorted or it has changed by the time the last person receives it. The same concept can apply to client management.

The more people involved in the flow of information about a client, the greater the risk of communication errors. Assign agents to specific clients and have them handle every part of the process, from initial consult to purchase and ongoing maintenance.

It’s important for an agent to keep agency staff up to date on the policies they sell. Professional development opportunities, such as continuing education classes offered by companies like WebCE and Noble Continuing Education, can help agents stay informed and educated about existing and new insurance products. All agents must fully understand the specifics of a product to communicate clearly with a client.