Sharks swirling: E&O-proof your business now

However, even if you’re ethically sound and protected with a good E&O policy, you’re still human. That means you may someday make a mistake that sheds client blood, potentially triggering a feeding frenzy. The best defense here is to E&O-proof your business practices. Here are just a couple E&O prevention strategies:

1. Make sure your solicitation materials play it totally straight. You never want to misrepresent who you are, what you do or what you sell.
2. Do a rigorous fact-finding and document the client needs you uncovered. Then link your recommendations to the client’s documented needs.
3. Educate your clients about what they bought. Make sure they understand what it covers and doesn’t cover, as well as all moving parts, fees and expenses and any underlying risks and guarantees.
4. Always stay in your area of expertise. Swimming in water that’s over your head is a recipe for flailing. And you know what flailing attracts.
5. Put everything in writing. Make sure your client file documents every key decision. Also make sure to document when clients decline important coverage, such as long term care insurance. This will protect you from a beneficiary shark.

These five techniques are clearly the surface of a very deep ocean. But here’s the key point: Train yourself to think defensively at all times, while remaining upbeat about the great work you do. Finally, to prevent E&O claims, don’t get out of the water. Instead, swim in the right direction (ethics), with the right protective gear (E&O insurance) and with the right strokes (best practices).