While acquiring accounts via a BOR certainly occurs frequently in this business, it is important to realize they have the potential to result in an E&O headache if not managed properly.
If the plan is to simply renew the account as is, you could be simply duplicating a mistake of the prior agent. This is now your file and it is now your responsibility. In fact, in certain situations, the agency that lost the account may have no liability at all because its duty to the customer may be found to have terminated upon the ending of the relationship.
When you acquire an account via a BOR, how confident are you that the current insurance program reflects their current exposures? When were the limits / values last updated? It is best to treat these aEURoenew accountsaEUR? as if you were targeting them as a prospect by performing a comprehensive review of the file through effective use of an exposure analysis checklist. These checklists, best handled on a personal visit, are a great tool to analyze, determine and update the customeraEUR(TM)s exposures. Then on the proposal, provide options for them to consider and for those coverages that they do not desire, get the appropriate sign off. This will certainly help to build a stronger E&O wall.
On personal lines accounts, since a face-to-face meeting is probably not as practical, provide these accounts with a pre-renewal questionnaire to complete and return. This is a tool contained in the Exposure Analysis checklists that, as with commercial accounts, helps to identify exposures that have developed in the last year, and those the customer was not aware of or thought were already insured.
When you meet with the customer to discuss aEURoewhat they hadaEUR? and what you are proposing, be sure to bring to their attention any differences in the insurance programs. While there will no doubt be enhancements that you are making to the program, the possibility exists that there may be areas where the coverage is less. It is critical to bring these to the customeraEUR(TM)s attention, document the discussions and get their sign off that they are agreeing to the switch.
Is it clear exactly when your agency technically becomes the agent of record? Is it effective midterm or at the next renewal? Is the account switching over all of its business or just a part of it? How does the carrier handle these matters? These are issues that need to be discussed and resolved to ensure any coverage modifications or claims issues are handled properly. There have been a number of E&O claims where this area of confusion has resulted in the mishandling of certain issues.
Bottom line - Do not simply renew aEURoeas is.aEUR? Perform the necessary updates on coverageaEUR(TM)s and limits and keep your agency from a potential E&O headache.
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