Print Page   |   Contact Us   |   Sign In   |   Sign Up
Demutualization, Flood Coverage, Liability, and Errors & Omissions Issues -What Brokers Need to Know
Share |
When changes occur in the industry, it’s critical to consider how they might impact your client. Perhaps a less frequent consideration is how you, as a broker, are impacted. The single biggest challenge to the broker is determining what to tell customers without exposure to an Errors & Omissions claim.

Economical Demutualization

Brokers have a duty not only to inform their clients of changes that may impact an insurer’s financial situation but also to keep clients informed of market changes that are linked to good customer service and client relationships. Swiss Re has suggested that you notify your clients of Economical’s impending demutualization and refer them to Economical’s website for further information: http://www.getthefacts.economicalinsurance.com. As with any client interaction, this notification should be documented in the client file.

AVIVA Flood Coverage

Brokers are duty-bound to notify clients that a flood product is available regardless of whether the broker has a contract with AVIVA or not. Given that this notice is mandatory where clients have a potential flood exposure, brokers who haven’t advised clients may find themselves in a precarious E&O situation if a flood claim occurs.
Again, make sure your file is well documented to reflect whether coverage was offered, accepted, or declined.

Cyber Liability

This is one of the fastest growing issues to impact businesses today. What is problematic for E&O insurers is those businesses that believe they are too small to be of interest to hackers. Not true!

While your brokerage may not be the target of big business hackers, junior hackers are always looking to see whom they can access. Keep your information safe. The Personal Data Breach Endorsement is free for those brokers who are part of our Sage E&O program.

E&O Limits

Are you still comfortable advising your personal-lines home and auto clients to take $1 million in liability coverage? Do you stay on top of recent court decisions?
  • April 2013—In a fatality involving a farmer who left behind a wife and three children, the court awarded $1.25 million for the death and future loss of income.
  • November 2013—When a vehicle crossed the centre line, killing an electrician who left a wife and three children, the award for death and future loss of income was $1.25 million.
  • May 2007—When an ophthalmologist was killed in a vehicle accident at the age of 63, his widow was awarded $6.2 million for wrongful death and loss of income support.
    (Case law courtesy of Handel Law Firm)
Many brokers are now offering a minimum of $2 million liability to their clients. If you are advising your clients to take higher limits, are you also reviewing your E&O limit?
more IBAA Courses and Events

2017-06-13 » 2017-08-31
Convention Educational Sessions (Recorded)

2017-08-01 » 2017-08-17
Licensing Level 2 Live Online - Evenings

Featured Members

Online Surveys
Membership Software Powered by YourMembership  ::  Legal