RISKY BUSINESS
WISCONSIN AGENTS MAKE COSTLY ERRORS Do you ever wonder what types of errors are most often the cause of E&O claims? Does high occurrence also mean high costs? In a recent review of E&O claim data from our partners at Swiss Re Corporate Solutions, it was found that Wisconsin insurance agents incur the highest claim costs from failing to recommend coverage, but that’s not the most common type of error in the state. In fact, only about 7% of Wisconsin E&O claims arose from failing to recommend coverage. The data shown in the tables is provided by Swiss Re Corporate Solutions and captures claim information from January 2015 December 2019.
we can learn from this information and use it to improve agency operations and employee E&O awareness. For example, if 28% of E&O claims in Wisconsin are due to failing to procure coverage then agencies should have a heightened awareness around agency workflows to review applications and policy information. Failing to procure coverage is often the result of missing one of more aspects of the insureds request. It might be an additional vehicle or adding an endorsement for requested coverage. As the data shows, these types of errors can also be costly accounting for about 22% of incurred claim costs.
While we can only speculate specific reasons for why certain error and omission allegations are more prevalent in Wisconsin than nationally, Alleged Error or Omission by Total Incurred Costs (Top 3)
Alleged Error or Omission by % of Total Claims (Top 3) Procure Coverage
23%
Negligent Misrepresentation
9%
4%
Adequately Identify Exposure
6% 0%
5%
WI Percentage of Total Claims
12 | MARCH 2021 |
28%
Recommend Coverage Type
21%
Procure Coverage
8%
26%
Provide Timely Notice of Claim to Carrier
10%
15%
20%
25%
30%
National Percentage of Total Claims
wisconsin INDEPENDENT AGENT
24%
7%
19%
2% 0%
5%
WI Percentage of Total Claims
10%
15%
20%
25%
30%
National Percentage of Total Claims
