Lack of Planning Could Increase your E&O Exposure

We’ve all heard the phrase and some of us may have used it, “we are living in unprecedented times.”  Yes, we are living in a real-life Hollywood movie where a pandemic has closed large sectors of our world; our economy and people are suffering. I don’t think any of us exactly understand how this pandemic will shape our society moving forward and I don’t think we can estimate what is going to happen to the economy and way of life in the next several months.

For the insurance industry, we may have just experienced a “wake up call” if you will. Fortunately, insurance has been considered essential business and allowed to remain operational with restrictions during the shutdowns. But what if the next wave that hits us is so severe that we can’t remain open or much worse, most of the staff becomes ill? Winter is coming and predictions the virus will be a bigger threat are circulating.

The insurance industry operates on deadlines and insurance agents have no choice but to meet them or suffer the consequences. A few examples of these deadlines would be: policies renewals, prospective clients waiting for new business quotes and clients needing to make changes to their current coverage in a timely manner.  Even under normal circumstances, getting everything done on a timely basis can be a challenge. But what happens if circumstances are not normal? Do you have a plan to operate in our “new normal”?

Disruption to the operation of your agency could lead to E&O claims. Scenarios that could lead to E&O claims against agents include not renewing clients’ coverage and clients not being able to add additional property, autos or coverage to their policies. Business continuity planning allows you to remain open and gives you peace of mind that you can meet the duty to your clients. It also allows you to keep your staff safe and mitigate your exposure to E&O claims.

Hopefully the past four months provided a glimpse into how your agency would operate if you had to go completely remote or if you have several of your staff ill at once. Carey Wallace, Chief Innovation Officer at OIA, recently wrote an article related to business continuity. The article is a wonderful guideline to step you through the process of planning to keep your business operational. Click here to learn more.

The Agents Council for Technology (ACT) has great resources available to you through the Big “I” website related to disaster planning and business continuity as well. Here’s a link to access ACT’s guide to help you plan.

No one can predict the future of business, but the last few months have changed the expectations of consumers and employees. Moving forward we will be a more virtual society and consumers will expect you to remain accessible without disruption. Employees who have been working remote will want to continue to enjoy that convenience. To remain competitive to both your clients and employees you must plan for a more virtual environment and have a disaster plan ready. Don’t let a lack of planning for business continuity threaten your livelihood and increase your E&O exposure.

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