When evaluating the cause of agents E&O claims, one of thecurrent hotspots deals with the manner in which claims are handledat the agency level. While many agencies have a staff dedicatedsolely to this function, in other agencies this function is handledby an account exec/CSR as part of their duties. Bottom line, thisclaims handling task is resulting in a number of E&O claims. From my experience, at least 40 percent of agency E&Oclaims are caused by this level within the agency.

One common scenario, which probably occurs frequently withinvirtually every agency, involves a customer calling to advise youragency of a claim but then after discussing it with you, decidingthat they do not want to file the claim. This could be because theclaim is not much more than the amount of the deductible, or thatthe customer will lose his loss-free discount, or because of theadditional premiums she will have to pay due to a claimssurcharge.

Agencies should handle this type of dialogue very carefully. Youwant to ensure that the conversation is well documented, not onlyin your agency file but also with some type of writtencommunication back to the customer. The goal or benefit of thisadditional documentation is to identify any potentialmisunderstandings between what you said and what they heard or viceversa.