Proper Authorization to Change Coverages Part II.In Blog 14 I wrote about the need to verify the party requesting a change in coverage has the required authority to make such a request. Another variation of this theme is more obvious but maybe more common. This is when the agency KNOWS the party has no authority to make a change and they do it anyway. Frankly, the agency might as well just write a check for their E&O deductible now and put it in a lock box when they do this because an E&O claims is virtually certain.
Changing policies when the agency KNOWS the other party has no authority is simply unacceptable. No excuse exists for this practice. Examples are accepting leasing company requests to change vehicles/equipment, mortgage company requests, banks’ requests to change coverages, or even certificate holders. None of these parties have the right to change coverages. If they believe coverages need to be changed, they need to go through the insured and the insured needs to make a written request of the agency. Only then is it in the agency’s best interest to make the change.