Burand’s Agency E&O Blog: Tip #23

Do you put an expiration date on all your proposals? If not, when does the proposal expire? Some consumers, most usually commercial insureds, are arguing proposals without expiration dates are good forever. Without an expiration date, arguing differently is difficult to win, at least difficult without spending a lot of time and money. A typical scenario is the insured has a proposal that is good for 30 days, although the proposal does not state this. Sometime after 30 days, the insured asks the agency to place the insurance per the proposal. For a variety of reasons, insurance cannot be placed per those terms any longer. This is one of those E&O claims that may not be triggered by a loss, but instead by an agency having to make up the difference between the proposal and current available terms. A better solution is to use the carrier’s expiration date or set an appropriate time such as 30 days.

In personal lines, because proposals are rarely provided, consider putting expiration dates on all quotes, even verbal quotes. These are easy protective steps that take no extra time or effort.