After a claim denial, most agents consider advocating on behalf of customers and attempting to negotiate with carriers to be a large part of the value proposition they bring to their customers.

But from an E&O perspective, it’s also one of the most dangerous things you can do, according to E&O defense attorneys.

Earlier this year, a free risk management webinar, co-hosted by the Big “I” Professional Liability Program and Swiss Re Corporate Solutions, tackled the topic of Avoiding E&O Exposure When Advocating for Customer Claims.

Feel free to view the webinar recording online to learn about the following ways you can advocate for customer claims without exposing yourself to E&O risk:

Discuss your agency’s claim advocacy procedure with staff. If you don’t have procedures for customer claims advocacy after a denial, develop them. The procedure should address who can advocate, how to properly do so and appropriate timing.

Understand the potential ramifications of advocating for customer claims. This includes knowing the difference between “advocating” and “falling on your sword”—and it becomes even more important as more and more carriers make E&O claims against agents.

Advocacy might be appropriate when a carrier misunderstands the facts or seems to misinterpret policy language, or when the agency needs to seek clarification or further explanation. Keep in mind that anything you put in writing can be damning testimony should it escalate to an E&O claim later on. A plaintiff could even use your written coverage interpretation discussions to highlight a lack of understanding—fueling an E&O claim that alleges misrepresentation.

By contrast, “falling on your sword” is when you take the blame for the customer claim denial, asserting it was the agency’s action or inaction that caused lack of coverage and suggesting the carrier or E&O carrier will pay the claim. Never ever do this, especially in any written form.

Don’t hesitate to involve your E&O carrier. When a carrier denies a claim, agency actions such as providing documents, admitting liability, participating in settlement discussions, incurring costs or expenses and giving recorded statements without your E&O carrier could violate the “Reporting and Notice” provisions of your E&O policy—jeopardizing your agency’s E&O coverage.

Don’t go overboard. Appropriate advocacy means guiding the customer through the claims process, including ensuring they comply with notice provisions and other prerequisites of coverage. You can also facilitate the exchange of information with the carrier when an insured needs to make a claim.

Want more E&O tips? Sign up for free E&O risk management webinars and check out past webinar recordings on the E&O Happens website. Big “I” members can also receive an E&O premium estimate from the Big “I” Professional Liability Program’s endorsed carrier, Swiss Re Corporate Solutions/Westport.