E&O and Electronic Delivery of Insurance Policies

One of the most valuable defenses against an E&O lawsuit is – the “Duty to Read” defense.  In order to apply the “Duty to Read” defense, you have to be able to demonstrate that the agency delivered the insurance policy to the customer.  Any agency delivering policies in an electronic format should follow a few simple steps to protect themselves against and E&O claim or lawsuit and to better serve their customer. 

First, get a signed, written consent to receive documents via electronic delivery.  Make sure they understand that they will only receive electronic documents and that they will not receive paper copies.

Second, when delivering documents via email, you need to get receipt acknowledgment of some form.  If the insured does not reply, give them a call and confirm they received the policy then make sure you document the conversation.  Ask the insured if they wouldn’t mind replying to your original email so that you can file the that as well. 

When delivering the policy via cd or USB “thumb drive”, you will want to include a letter stating the electronic document is the policy and the insured should carefully read it, give them instructions to contract the agency if they have any questions or to request any changes. 

Following these steps will drastically help minimize your E&O exposure.