Not all E&O suits can be avoided; however implementing some simple practices will make them less likely:

Know what you're selling. Coverages such as earth movement and builders' risk are sold with the expectation of common policy language, but this is not always the case. For example, earth movement policies may exclude sinkhole or mine subsidence losses, and Builders' Risk policies sometimes exclude subcontractors' liability.
Obtain sign-offs when necessary. When sign-off forms are not required, documenting in writing that the insured has rejected a recommended coverage can be the "stitch in time that saves nine," and makes the defense expert's job much easier.
Document communications with the policyholder and carrier. An example: a broker secured coverage for an insured with a policy providing that the carrier would give notice 90 days prior to any cancellation. However, the insured and broker received a notice of cancellation only 30 days before the renewal. The broker contacted the carrier and obtained a 60-day extension to put the coverage out to bid. Ultimately, the same carrier that canceled the original policy was the low bidder for the new coverage, but with much lower limits of liability.
Adherence to written internal policies and procedures. Documents showing that a broker followed the firm's internal procedures certainly aids the broker's defense.
Report claims timely. Brokers give notice of claims in different ways: phone, email, overnight mail, regular mail and even by fax. Use the method specified in the policy. Don't let personal preference create a problem with complying with the insurance policy's requirement. Although it's not required, the "belt and suspenders" method is safest: Send notice in the manner the policy states, plus one other reliable method.

Which carriers should receive the notice? Some brokers report only to the carrier that they believe is most likely to afford coverage, without considering other carriers whose policies may also be triggered. This can be a dangerous practice if it delays reporting to other carriers that also potentially provide coverage past the reporting deadline, or in a manner that prejudices the carrier.

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