Burand’s Agency E&O Blog: Tip #34

Personal Lines Liability Limits. If an agency has only offered a client $100,000 liability and they have a $300,000 claim, what do you think the answer will be when, on the witness stand, their attorney asks them whether they would have purchase $300,000 if it had been offered?

Exactly.

This is why agencies can better protect themselves by offering higher limits or at least offering to quote higher limits each time they quote a policy. Too often agencies simply quote what the client requests. If the agency is just a quote shop, they may actually be okay in court when the plaintiff’s attorney asks this question, depending on the state and details. However, for an agency that advertises or represents themselves as a professional, then the best course is to just ask.

Many CSRs do not want to ask because they know, or think they know, the client’s answer. This might be consider an act of omission, not an error. Just ask. Furthermore, consider always asking if they would like a quote for a higher amount regardless of the amount being initially quoted. Some CSRs stop at a $1 million umbrella, but since $2 million umbrellas are readily available, why not at least ask? And if the customer wants $2 million, why not ask about a $3 million umbrella? That way the agency can always prove (assuming documentation exists) that they offered more making the plaintiff attorney’s question moot. And you want moot.