Practice Tip for Agents: Use Policy Transmittal Letter to Encourage Insureds to Read Their Policies
I am often approached by agents with questions about how they can reduce their liability exposure. While there are a number of things that can be done, one particular component of risk management that is often neglected is the policy transmittal letter to the insured.
Often, when agents deliver policies to their insureds, they fail to provide any transmittal letter at all. However, the transmittal letter provides an ideal opportunity to communicate to an insured its responsibilities in connection with the policy. In particular, such a letter can indicate that the policy includes multiple limitations, terms, and conditions, not all of which have been reviewed with the insured, and that the insured should carefully read the policy.
Every situation differs, of course, and such a letter may not always be appropriate. If you have questions about a particular situation, you should seek out competent legal advice However, generally speaking, this practice can help to avoid misunderstandings that often escalate into protracted E&O litigation.
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