Potential E&O Exposure - Forgetting to Complete EFT

[ModernInsurance]

Disclaimer: I know most, if not all, of us here are not attorneys. Thus I'm asking you to share your experiences and opinions on the matter.

Scenario: A prospect comes in, purchases auto policy. While having docs signed and completing the transaction, there's a glitch in the system that prevents agent from being able to enroll client in EFT. Agent assures client they will complete enrollment in EFT on behalf of client the following day. Client agrees and provides banking info to agent. Agent never enrolls in EFT. Policy cancels the following month. Client unaware policy cancelled & gets into at-fault accident 3 months later.

Outcome: Will this be flatly denied by the carrier as the policy had only been in force for a month prior to cancelling for non-payment? If so, will E&O step in to cover the loss?

 

[hesse]

the insured would receive a bill or notification of cancellation due to non payment. If they could prove the agent negligent I would think E&O

 

[marindependent]

how is the client unaware of cancellation?

 

[ModernInsurance]

Client moved and didn't receive notice of cancellation via US Mail.

 

[hesse]

so he didn't notify you of a physical address change?

 

[bobson]

Disclaimer: I know most, if not all, of us here are not attorneys. Thus I'm asking you to share your experiences and opinions on the matter.

Scenario: A prospect comes in, purchases auto policy. While having docs signed and completing the transaction, there's a glitch in the system that prevents agent from being able to enroll client in EFT. Agent assures client they will complete enrollment in EFT on behalf of client the following day. Client agrees and provides banking info to agent. Agent never enrolls in EFT. Policy cancels the following month. Client unaware policy cancelled & gets into at-fault accident 3 months later.

Outcome: Will this be flatly denied by the carrier as the policy had only been in force for a month prior to cancelling for non-payment? If so, will E&O step in to cover the loss?

If the agent and carrier had a good relationship I would hope the company would provide coverage.

 

[ModernInsurance]

bobson - that's my hope as well. People miss things occasionally and this seems to be an honest mistake.

 

[blue_wynd]

What Bobson. Hoping the carrier pick up the tab is probably the best scenario. Not sure about the lapse in coverage though.

 

[pfg1]

Boy that sounds like a mess. Keep us posted, I'm interested in hearing the outcome.