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...C anti-fraud rules. This includes errors of omission, as well as errors of commission. Liability can extend t...ary E. Jacobson, JD can be reached at Vander Wel, Jacobson, & Bishop ...

...tion 4.2 Claims by clients for errors & omissions and related matters 4.2....in dealing with the agency, my assets, and my doctors, if I become disabled? S...

... by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent information resources. Make sure that the deal will pay for itself. Structure the terms so that the repayment plan fits into cash flow. If it's not self-supporting, it's not going to work. Keep the deal simple so everyone concerned will understand it. Be open with the seller. Once proposals are created (structure, business plan ... a thorough investigation of the agency in question. Look at: Its five-year figures; its relationship with its companies; the breakdown of its premiums (Commercial Lines vs. Personal Lines); its history in regard to ownership, claims, employee agreements, and prior Errors and Omissions claims. Find out which carriers it has lost. Also, take a look at the accounts receivable. Does the current agency/owner let payments ride? If it's tightened, will the accounts go elsewhere? Take a good look at the other ... loss ratio, especially Personal Lines. Some companies today are gearing future commissions on the last three years' loss ratio. Get an independent appraisal by a consultant. Determine the average age of at least the key accounts. People like to do business with their contemporaries. If possible, do your own financial analysis and have it checked by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent ...

... by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent information resources. Make sure that the deal will pay for itself. Structure the terms so that the repayment plan fits into cash flow. If it's not self-supporting, it's not going to work. Keep the deal simple so everyone concerned will understand it. Be open with the seller. Once proposals are created (structure, business plan ... a thorough investigation of the agency in question. Look at: Its five-year figures; its relationship with its companies; the breakdown of its premiums (Commercial Lines vs. Personal Lines); its history in regard to ownership, claims, employee agreements, and prior Errors and Omissions claims. Find out which carriers it has lost. Also, take a look at the accounts receivable. Does the current agency/owner let payments ride? If it's tightened, will the accounts go elsewhere? Take a good look at the other ... loss ratio, especially Personal Lines. Some companies today are gearing future commissions on the last three years' loss ratio. Get an independent appraisal by a consultant. Determine the average age of at least the key accounts. People like to do business with their contemporaries. If possible, do your own financial analysis and have it checked by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent ...

... with others. The owner of a larger production agency needs to consider how to grow and to develop new producers. An agent also needs to think ahead about how he plans to sell or transfer his agency or book of business when he retires, and how to structure his business to accomplish his plans. I feel that an agent with any substantial assets should either be incorporated or join with someone who is. Important questions of structuring the corporation are whether to elect Subchapter S, whether to hold the stock individually or in a ... owner's death or departure will be handled. I feel that all agencies and producers should have such contracts for everyone's protection. Litigation exposure can be reduced if the agent understands how the risks arise, and makes plans to avoid them. Major areas of litigation exposure are errors & omissions, and protection of expirations. Proper insurance can reduce but not eliminate exposure. Alternate dispute resolution if properly used may reduce litigation risks and cost. A producer who is aware of his legal rights is in a better position to protect them without litigation ... An established producer who joins a larger agency can lose his expirations if he does not take steps to protect them. We are all mortal. Selling or otherwise transferring an ownership interest in an agency, such as with sales of stock or assets, corporate mergers, partnership liquidations, or use of Employee Stock Ownership Plans (ESOPs), is something all agency principals will ultimately do. It is important to plan ahead, since otherwise it may be too late to take important steps when the moment actually arrives. A wise agent ...

... by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent information resources. Make sure that the deal will pay for itself. Structure the terms so that the repayment plan fits into cash flow. If it's not self-supporting, it's not going to work. Keep the deal simple so everyone concerned will understand it. Be open with the seller. Once proposals are created (structure, business plan ... a thorough investigation of the agency in question. Look at: Its five-year figures; its relationship with its companies; the breakdown of its premiums (Commercial Lines vs. Personal Lines); its history in regard to ownership, claims, employee agreements, and prior Errors and Omissions claims. Find out which carriers it has lost. Also, take a look at the accounts receivable. Does the current agency/owner let payments ride? If it's tightened, will the accounts go elsewhere? Take a good look at the other ... loss ratio, especially Personal Lines. Some companies today are gearing future commissions on the last three years' loss ratio. Get an independent appraisal by a consultant. Determine the average age of at least the key accounts. People like to do business with their contemporaries. If possible, do your own financial analysis and have it checked by an accountant. Determine how the newly formed agency will work. Deal with the "nuts and bolts" of the agency's operations. Talk to carriers about the agency in question. They're excellent ...

...unique and has caused a number of Errors & Omissions (E&O) claims due to an in...ca National Insurance Co. E&O Bulletin and is reproduced by permission. Curtis...

... areas of litigation exposure are errors & omissions, and protection of expirations. Proper insu...se. On complex matters such as mergers and reorganizations, it can only sugges...

..., employee agreements, and prior Errors and Omissions claims. Find out which carri...at the agreement contains non-compete and non-piracy clauses that are reasonable and enforceable. If poss...

... usually not held responsible for errors and omissions in situations involving the ...olvencies will continue to be of major and immediate concern for agents during...