{"id":13601,"date":"2020-11-10T14:08:52","date_gmt":"2020-11-10T19:08:52","guid":{"rendered":"https:\/\/businessriskpa.wpenginepowered.com\/?p=13601"},"modified":"2022-03-14T11:37:03","modified_gmt":"2022-03-14T16:37:03","slug":"documentation-crucial-in-eo-coverage-suits-experts","status":"publish","type":"post","link":"https:\/\/businessriskpartners.com\/?p=13601","title":{"rendered":"Documentation crucial in E&O coverage suits: Experts"},"content":{"rendered":"
[vc_row no_margin=”true” padding_top=”0px” padding_bottom=”0px” border=”none”][vc_column fade_animation_offset=”45px” width=”1\/1″][vc_row_inner inner_container=”true” padding_top=”1.25em” padding_bottom=”0px” border=”none”][vc_column_inner fade_animation_offset=”45px” width=”1\/1″][\/vc_column_inner][\/vc_row_inner]

By Judy Greenwald<\/p>\n

published | Business Insurance<\/a> <\/p>\n

Documentation is essential for insurance brokers to protect themselves in errors and omissions lawsuits as policyholders who have been largely unsuccessful in obtaining business interruption coverage from their insurers eventually turn to them for compensation for their COVID-19-related losses, experts say.<\/p>\n

So far, only a handful of agents and brokers have been named in coverage litigation stemming from COVID-19 claims, but \u201cthat number may well increase as times goes on,\u201d said Kenneth Fall, chief litigation counsel at Marsh LLC in New York.<\/p>\n

He spoke during the Minneapolis-based Professional Liability Underwriting Society\u2019s virtual annual conference Tuesday.<\/p>\n

\u201cWe\u2019re clearly seeing a hardening market,\u201d said Lisa Doherty, founder and CEO of Business Partners in Windsor, Connecticut. \u201cAs a national issue, it has become more difficult for policyholders.\u201d<\/p>\n

There is much more stringent underwriting, and insurers are issuing supplemental exposure applications to determine their COVID-related exposure, she said.<\/p>\n

Rates and retentions are increasing, and insurers are trying to put COVID-related exclusions into policies, which is going to create exposure for brokers, Ms. Doherty said.<\/p>\n

Mr. Fall said, \u201cAny time you have a hardening market, you\u2019re going to have a situation where more claims are contested and denied,\u201d and ultimately there will be more E&O claims against brokers stemming from COVID-19.<\/p>\n

Brokers must navigate the situation now, he said. \u201cThe key is going to be for brokers to clearly communicate exclusions and other nuances that are appearing in policies\u201d and then to document their conversations with policyholders, Mr. Fall said.<\/p>\n

More documentation is critical in a hardening market, agreed James Redeker, claims manager and vice president of claims at Westport Insurance Corp., a Westport, Connecticut-based unit of Swiss Re Ltd. Even identical wording may be interpreted differently by courts, he said.<\/p>\n

\u201cMake sure you document everything,\u201d including situations where policyholders decline coverage, said session moderator Peter Biging, a partner with Goldberg Segalla LLP in New York, who is co-chair of his firm\u2019s management and professional liability practice group.<\/p>\n

\u201cMost brokers of any size have a document management system of some kind, and often those systems are set up so they can make notes of important communications,\u201d he said.<\/p>\n

Plaintiff attorneys will ask for those notes if they are not in the system, Mr. Biging said.<\/p>\n

\u201cLook at the big picture,\u201d he said. Do not get caught up in a specific policy, but look at the entire portfolio. He said in one case, involving a dispute, a policyholder who was very price-conscious, wrote in connection with another policy, \u201cThis is costing me a fortune. I don\u2019t want it,\u201d Mr. Biging said.<\/p>\n

\u201cFight these early COVID-19 claims,\u201d Mr. Redeker said. \u201cDo not give plaintiffs a toehold to flood the courts with suits. It\u2019ll be money well spent.\u201d<\/p>\n

\u201cIt\u2019s really early days, so pay attention, be careful\u201d and watch the situation, \u201cbecause this is going to develop further,\u201d Ms. Doherty said.<\/p>\n

Other experts have also\u00a0said<\/a>\u00a0the prospect of policyholders filing business interruption-related litigation against their brokers is hovering over the insurance brokers E&O market.<\/p>\n

There also a whole host of operational issues to consider, said Mr. Biging said.<\/p>\n

Brokers typically have insured in their office \u201cand see them visually sign applications,\u201d and that is not happening; previously brokers could visit locations and \u201ceyeball\u201d situations, and they are not necessarily doing that now; and there are issues related to brokers picking up their premium checks.<\/p>\n

\u201cThere\u2019s all these additional issues that could be rising up as a result of COVID-19,\u201d Mr. Biging said.<\/p>\n[\/vc_column][\/vc_row][vc_row padding_top=”0px” padding_bottom=”0px”][vc_column fade_animation_offset=”45px” width=”1\/1″]

Share this.<\/p>

<\/i><\/a><\/i><\/a><\/i><\/a><\/div><\/div>[\/vc_column][\/vc_row]\n<\/div>","protected":false},"excerpt":{"rendered":"

November 10, 2020 – Worried about that #HardeningMarket we all keep hearing about? Hear what the #Experts had to say last month at the Professional Liability Underwriting Society conference about the market and what it could mean for you in the future. Featured is one of #BRPs own experts, CEO Lisa Doherty!<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[111],"tags":[],"class_list":["post-13601","post","type-post","status-publish","format-standard","hentry","category-articles","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=\/wp\/v2\/posts\/13601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13601"}],"version-history":[{"count":0,"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=\/wp\/v2\/posts\/13601\/revisions"}],"wp:attachment":[{"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businessriskpartners.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}