1. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) E&O RISK MANAGEMENT: MEETING THE CHALLENGE OF CHANGE Reporting an E&O Claim

2. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) INTRODUCTION The likelihood of an agency having an E&O claim over the course of its existence is high, whether the agency did anything wrong. However, the earlier a claim is reported and your E&O carrier involved, the more likely it will be resolved quickly.

3. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY Often professionals do not believe that they have done anything wrong when confronted with a claim or potential claim Their reaction may be to provide their own “proof” or “defend” their actions to those making allegations. STOP before you proceed to defend your actions or provide any documentation and contact your carrier for assistance!

4. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY The Cost of Reporting The reporting of a claim or a potential claim to Swiss Re does not automatically result in any underwriting action Underwriters individually review each claim/incident to determine the facts and circumstances surrounding the alleged wrongful act If no reserves or payments are applied, generally no underwriting action will be taken.

5. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY The Cost of Reporting The reporting of a claim/potential claim to Swiss Re does not automatically result in any underwriting action Underwriters individually review each claim/incident to determine the facts and circumstances If no reserves or payments are applied, generally no underwriting action will be taken The cost of not promptly reporting a claim far outweighs reporting it

6. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY Concerns of Loss of Policy Premium Credits E&O carriers often offer premium credits to reward proactive risk management in the agency These often include loss control credits for attending seminars as well as some sort of claims-free credit In the case of Swiss Re Corporate Solutions you will not lose these policy credits simply for filing a claim because of how a claim is defined for premium determination

7. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY When it happens to you Do not admit liability—to the insured or the insured’s insurance company Be empathetic, BUT choose your words very carefully Do not discuss or provide copies of your E&O policy to anyone Do not offer to pay the claim yourself - even small amounts! Do not agree to give a deposition or provide a statement

8. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY When it happens to you E&O Carrier procedures: – Report the claim – by completing a claim reporting form – to the E&O carrier, or producing state association, along with details of any conversation or correspondence you have received making a demand for damages – Forward all documentation – Cooperate fully with the E&O carrier or appointed counsel

9. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY When it happens to you Internal agency procedures: – Involve your assigned E&O quality assurance staff person, or other appropriate agency personnel – Appoint one agency member to serve as the sole point of contact for all matters related to the claim – Interview every person involved in the claim—and remember it’s not about the “who”, it’s about the what, when, where, and how – Have each applicable person provide a written narrative describing the incident and check the customer’s file to determine the chronology of events

10. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY “If it is not your attorney, they are not your friend”!

11. Copyright © 2012, Big I Advantage®, Inc., and Swiss Re Corporate Solutions. All rights reserved. (Ed. 08/12 -1) REPORTING AN E&O CLAIM - MYTHS VS. REALITY Documentation Can Reduce Deductible Swiss Re Corporate Solutions offers a Deductible Reduction provision that provides policyholders with up to a 50% reduction of the deductible (up to a maximum of $12,500) for claims alleging failure to procure a recommended coverage where the agency has written documentation in the customer file refuting such a claim. There is no limit to the number of claims the Deductible Reduction provision applies to