E & O Checklist. I. Communications with the Insured A. Coverages. B. Binders and Orders

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1 E & O Checklist I. Communications with the Insured A. Coverages Use care when explaining or delivering special, comprehensive, and specific coverages. All policies have exclusions. Point them out to the insured. Confirm in writing the insureds declination to purchase important coverages or limits. Explore every market standard, excess and surplus, etc., before advising the insured coverage is not available. Advise insureds in writing if needed coverage previously unavailable can now be written. Do not indicate to an insured you can place a policy until you know for certain it can be placed. Avoid place property coverages until you have physically visited the premises or location to be insured. Stay within your own field. Do not be an attorney, accountant, engineer, etc. If you don t know, say so. Find out and report back in writing. Never reveal you are insured for Errors and Omissions. B. Binders and Orders Prepare all binders immediately. Indicate the time and date that the binder is effective. Indicate the company, the type of coverage, property to be insured, limits, address to be insured, and the correct name and billing address of the insured. Issue a policy as soon as possible. A suspense file or expiration date of binder should be maintained and policy issued and delivered prior to termination of binder. Do not rely on binder in lieu of a policy. Know the state law related to the use of binders, especially the number of days coverage is permitted under a binder. Pick up the binder when you deliver the policy. An oral request for a binder should be followed up immediately with a written binder and the insured sent a copy. All agency personnel should be informed of agency binder procedures. Never use oral or desk binders in lieu of an ACORD binder form. Use ACORD binder o effect new coverages on existing policies. When requested to issue a policy, do it at once. If not possible, issue an ACORD binder. Do not exceed your binding authority and the prohibited and restricted lists of each company. Inform each agency personnel of binding authority and the prohibited and restricted lists of each company. Binders should be executed in triplicate. The original to the insured, a copy to the company, and an office copy. Never use a binder to provide free insurance. Advise the insured that coverage is in force and will have to be paid for.

2 C. Endorsements Prepare endorsements at once. If not possible, acknowledge request in writing and issue binder. Indicate on the face of the office copy of the policy that the policy has been endorsed, the date, and whether coverage was added or deleted, or modified, e.g., increase in limits in mid-term. Determine whether endorsement or cancellation and rewrite of policy is the best method to accomplish a change in the policy, e.g., assignment, change of address, etc. D. Expirations and Renewals A renewal policy should be issued and delivered prior to expiration of existing policy. Advise insured in writing if the renewal differs from the expiring policy noting specific changes. Cross-check renewal lists with office expiration records and company expiration lists. The renewal list should be reviewed 60 to 90 days prior to expiration. Advise insureds in writing of your non-renewal of policies in sufficient time for the insured to obtain coverage elsewhere. The State Board of Insurance regulations on Cancellations and Non-Renewals requires at least 30 days prior notice of non-renewal for policies covering family automobiles, dwellings, or governmental properties. Unless instructed to renew or unless proper notice of non-renewal has been given, you must issue the renewal policy. Solicit every renewal. If you can t reach the insured, issue the policy prior to expiration. Renewals issued without an order from the insured should be followed up immediately. If not wanted, pick the policies up at once. E. Cancellations Valid cancellation is only obtained by strict adherence cancellation provisions of the policy and State Board of Insurance Regulations or Cancellations and non-renewal. Policies cancelled at the request of the company or the insured should be picked up at once. If it is not possible to obtain physical possession of the policy, notice of cancellation should be sent to the insured at once in accordance with cancellation provisions of the policy, and a lost policy release signed by the insured should be obtained. Be certain that additional insureds, mortgagees, loss payees, governmental agencies, etc., are included in the notice of cancellation. Check office copy for policy changes in address, assignment, etc. before sending notice of cancellation. Do not divulge reasons for cancellation unless requested to by law and with immunity from suit. It is safer to issue a new policy than reinstate a policy that has been cancelled. Do not cancel a policy and use the unearned premium to pay outstanding balances on other policies. Never send an invoice on a policy that has been cancelled and the earned premium paid thereon. Be certain accounts receivable records indicate clearly that the policy has been cancelled. You should indicate on the invoice that balances due on cancelled policies are for the earned premium.

3 F. Claims All reported claims must be in writing and on claim ACORD forms. Use ACORD for telephone reports as well. (If your company has a specific form they require to be used, use that form in lieu of the ACORD form.) Never indicate there is or is not coverage unless you are absolutely certain. Take the report and advise that you or the adjuster will be in touch with the insured or claimant. Obtain the telephone number where the insured or claimant can be reached. Advise insured not to admit liability (or blame), but to simple state the facts how they occurred. Advise the company in writing of the reported claim as soon as possible. Use ACORD Forms and Procedures as often as possible. Advise the insured of his responsibilities to protect property and to do nothing that will increase the loss. Lack of cooperation on the part of the insured could result in the claim being denied. II. Communications With Companies A. Binders Company must be sent copies of all binders. Binders must be cancelled in the same manner as policies are cancelled. If company request cancellation of the binder, comply with that request immediately and replace binder with another company. Never bind a company for coverage or limits beyond your binding authority or for which there is no authority. B. Renewals Every agency billed renewal must be ordered. Company has no responsibility to issue renewals, except where 30 days notice of non-renewal is required by the State Board of Insurance. Order renewals well in advance of expiration, preferably 60 days. Check renewals issued by company with the renewal list sent to the company. If you don t receive policy renewal by expiration date, issue a binder, or advise company policy has been renewed with another company. Check renewal policy for correctness. Do not assume it has been prepared correctly. Do not endorse an incorrectly prepared renewal. Have it typed correctly before delivery to the insured. Check renewals as to form. Form changes should be brought to the attention of the insured. C. Orders for the Policies Do not misrepresent the risk or withhold any underwriting information on new risk submissions. Applications should be completed thoroughly. Applications may become part of the policy or statements made there in may modify or void the coverage. Be certain that the application indicates whether it is an order or a request for quotation.

4 Notify the insured immediately if company declines coverage or modifies coverage it is willing to write. Company requests to alter or modify the coverage requested in the application should be in writing. D. Endorsements Check endorsements for accuracy. Send company copies of endorsements prepared in agency as soon as possible. If endorsements can t be prepared at once, prepare binders. Use standard endorsement forms. If not applicable, request company to issue endorsements. E. Cancellations Honor company request for cancellation or modification on the dates requested. Notify company immediately in writing why you cannot comply with the request or within the time limit. Have a complete understanding with the company on request for cancellation, for non-payment of premium, and flat cancellations. F. Claims Advise company at once of all reported claims. Use the telephone in an emergency and follow-up in writing. Get the company s answer in writing when requesting coverage information before relaying it to the insured or claimant. Use ACORD forms and procedures, unless your company directs differently. III. Office Procedures Instruct office personnel they must use your standard procedures to handle claims, cancellations, endorsements, renewals, and orders for new policies. All personnel must record all in-person or telephone conversations. Use a telephone memo or call sheet or log it into the computer if applicable. Hand written or computer documented records of communication are invaluable when an agency is questioned of performance or the lack of it. Check and re-check office personnel on compliance with standard procedures. Non-compliance on a recurring basis is a reason for discharging an employee. Order, prepare, and deliver policies, renewals, binders, and endorsements as soon as possible. Insureds and agents often forget what was ordered. Review files on a scheduled basis with other members of the agency and company representatives. Establish a system to advise insureds of new policies and new coverages and changes in company underwriting attitudes. Upgrade your personnel by their attendance at conferences, seminars, and schools relating to their functions and responsibilities in the agency. This applies to agents as well.

5 Know your companies. Placing coverage in an unsound company may result in a claim against you as well as damage to your agency s reputation. IV. Members of Family of Agency Personnel Constantly remind members of the family what is expected of them with regard to telephone messages received at home. Get the name and telephone number of the person calling. Take the message, but emphatically state that you have not authority to act on insurance matters. Advise the caller where the agent or agency employee may be reached. Advise the caller that his message with be given to the agent or agency employee as soon as possible. Under no circumstances should members of the family state coverages are in effect or will be put into effect. Advise members of the family who in the agency can comply with the caller s request. Keep a list of night numbers for all companies at home near the telephone. Advise members of the family of this list. If the caller knows the name of his company, and needs immediate action, e.g., a serious accident or loss, he can be given the company night number. Family should not attempt to place this call for the caller.