When you take over an account by broker of record, it’s important to realize your work isn’t done; in fact, it is actually just beginning. Acquiring an account by broker of record, if not handled correctly, has some significant Errors & Omissions claims potential.
You face a number of key issues when acquiring an account via a broker of record. Primarily, how confident are you the current policies reflect the current exposures? Is your agency/producer familiar with this type of account and the exposures this type of risk faces? In addition, based on the quality of the job the prior agent did, there might be coverages available that haven’t been discussed with your new customer but need to be for exposures such as cyber liability or employment practices liability.
The bottom line: Duplicating the prior agent’s mistakes does NOT isolate your agency from the possibility of an E&O claim if a customer has a claim that their policies didn’t cover completely. Falling into the “renew as is” trap is one of the worst things you can do.
It’s best to treat this new customer, personal or commercial, as if they were a brand new prospect. Prove your value by conducting a comprehensive review of the file. This includes analyzing their current program, identifying their exposures, and providing them with coverage options. Exposure Analysis Checklists are a great tool to assist you in this regard.
Be sure to bring to your customer’s attention the differences between their current coverage and the options you’re proposing and to document all discussions.
An additional question that’s essential to resolve is exactly when does your agency technically become the official agent of record. Is the account switching over all of its business or just some of it? Does this take effect at the next renewal or mid-term? What are the wishes of the parties? What is the position of your carriers? Resolve these matters with your insured and carriers to ensure proper handling of any coverage modifications or claims.
When you are acquiring an account via a BOR, pay proper attention is given to every file. Do not “renew as is!” You might simply be duplicating the prior agent’s mistakes and this does not protect your agency from the possibility of an E&O claim.