Insurance agents specialize in protecting their clients from the various exposures they face, specific to industry, size and risk factor. However, insurance agents themselves are not immune to facing claims against them, especially as they have to stay on top of changing regulations, policy updates, market trends and federal legislation. In this article, we’ll explore some common exposures and how they can mitigate them, the first line of defense being an Insurance Agent Professional Liability Insurance policy.
Cyber risks are still in their infancy, and agencies don’t face a lot of data breach claims yet. However, this doesn’t mean they’re off the hook. In fact, since insurance agencies, like many industries, collect personal data to run quotes and do business, they are just as exposed and vulnerable to cyber attacks as anyone else without the proper cyber protection practices.
Insurance certificate claims.
A certificate of insurance is historically just a summary representation of what the basic policy provides. But because companies ask for all kinds of information on these certificates, that has caused a huge E&O exposure, according to Bill Wilson, associate vice president of Education & Research for the Independent Insurance Agents & Brokers of America and director of Big “I” Virtual University. This is because things on the certificate may not reflect what the policy actually covers.
“15 percent of commercial E&O claims [in the last four years] have to do with certificates of insurance and additional insured requests,” says Wilson to My New Markets.
Because of the knowledge gap and inability to penetrate the market with the necessary information, this is a constant issue. In addition, the evolution of these certificates creates issues, as well. Regulations require agents to start using new certificate forms within one year of updating. Those who use outdated forms after the one-year mark are subject to claims.
In our next post, we’re going to cover what insurance agents can do to minimize their exposures and prevent liability claims from arising against their business. Stay tuned.
About Genesee General
At Genesee General, we are dedicated to providing the custom-tailored solutions your client’s insurance business. For 34 years, we have continued to provide quality and affordable insurance policies including professional liability, employment practices, cyber liability, niche markets and more. For more information, contact us today at (800) 282-8755.