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What Steps Can Firms Take to Improve/Lower their E&O Cost?

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By Michael Ryder

Best Terms Tip 2: If your firm has had claims during the past five (5) years, make sure the underwriter has the complete understanding of their details, particularly those with paid or reserve amounts of $25,000 or greater.

Providing a narrative gives the firm an opportunity to tell its side of the story and also allows underwriters to utilize their discretion to weigh more than loss values in their evaluation of the claim.

Be sure to articulate the claimant’s allegations (against the firm and/or its agent) and provide a rebuttal if you feel that the firm or its agent did nothing wrong. Underwriters appreciate integrity, even if an error or omission was made. Be up front about the details and explain any additional internal controls or preventative measures the firm has since instituted to mitigate the likelihood of similar claims in the future.

When underwriters have only minimal information to work with when evaluating a prior claim(s), they are unable to justify applying positive discretionary attributes (i.e. discounting its value shown the loss runs).

Final Best Terms Tip: The firm’s selection of an insurance agent-broker who knows how to properly package your application into a complete submission also plays a critical role.

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