E&O insurance is a type of coverage that protects individuals and businesses from losing potentially millions of dollars through uncovered losses that were judged to the individual's or business' erroneous or incomplete guidance. If such an event occurred, proper record keeping could save the day. (If you've ever had to reconstruct an account's activity, you're well aware of the importance of maintaining accurate and complete records of clients' transactions.)
There are three major things an agency must do continuously to protect against potential lawsuits:
(1) Thoroughly identify all coverage needs-use survey forms and checklists.
You can't possibly remember all the right questions to ask!
(2) Present a range of coverage options from which the client may choose.
Prepare a formal presentation, in writing, allowing clients to make choices (based on your suggestions) of coverage amounts and deductibles.
(3) Document what was accepted and rejected by clients. While giving your presentation, make notations on each page, then ask clients to initial and date whether they accept or reject any given option.
Following these suggestions will serve to better educate your clients, while providing you with the documentation that will help exonerate your agency in the event that an E&O claim is filed.