Buzz: If you have a claim and it’s bad enough that an insurance company drops you, how hard is it to get insurance elsewhere?

Brauner: Many times you can obtain coverage from another carrier if you are dropped. We work with several alternate carriers. If you have a claim, don’t give up. Sometimes all it takes is a fresh set of eyes, especially if the issue is not too serious. We advise clients to prepare their claim summaries and rebuttals for the best possible outcome: concisely, professionally and with inclusion of new procedures that might prevent the problem from happening again.

Conversely, and I say this with all due respect, handwritten scrawl, ranting, incoherence, blaming others for everything, even if it’s true, works less well in persuading an underwriter that you are a good risk. It pays to put time and thought into your response, even if the complaint is frivolous.

Buzz: What other advice do you have for those who find themselves with claims or disciplinary actions?

Brauner: Report the event to your insurance agent/carrier when it happens for your own protection. If you fail to report a claim and let your insurance policy lapse, either intentionally or by forgetting to renew on time, and then try to obtain a defense from the carrier, you may very well be left without coverage, even if you were insured when you did the report. That’s the way all Claims Made policies work. But if you get a claim or dispute on the record during the policy period by reporting it to your agent, it should be covered down the road even if you let your insurance lapse and the policy is no longer in force. Also, most insurance policies require you to report claims and incidences in a timely manner. Therefore, a carrier can potentially refuse coverage if they feel the delay in reporting hurt the defense. It hardly ever happens but you don’t want to be the exception.

Buzz: So honesty is the best policy?

Brauner: For many reasons. You should report claims and disciplinary actions on any and all insurance applications also. It may seem counterintuitive to disclose something that is easier to hide and maddening if the incident or complaint is frivolous and dismissed as such. But if it's part of public record, disclosing is for your own protection. And not just to make sure that there is coverage when you need it. You also don’t want to report having “no claims or incidences” on an application and then have a claim resurface that you clearly knew about prior to submission of the application.  Underwriters are the opposite of insurance agents- underwriters look for any reason possible not to write your business. If they think you failed to disclose something intentionally, they may refuse coverage for what they consider to be dishonesty. If this happens, it makes it harder to get coverage elsewhere, as you might expect.

Buzz: So claims and incidences should be reported by appraisers/agents and brokers for their own good?

Brauner: Yes for the reasons stated. Also, receiving professional assistance early can often diffuse an issue and make it go away.

Buzz: Any other advice for those with claims/incidences?

Brauner: Yes, we advise clients to submit their renewal information, including claims documents, far in advance of expiration to allow adequate time for quoting. Renewals with claims are more complicated and take longer to underwrite. Beginning the process early can relieve the stress of uncertainty as your policy expiration date approaches. And it gives you time to shop.

Buzz: What other insurance advice do you have?

Brauner: The best advice I can offer about insurance is to make sure you have it when you need it. If you have insurance, renew before the policy expires to ensure continuous coverage for all past work. That is more important today than ever. We contact our insureds through mailings, e-mail and phone calls, as their expiration date approaches, to make sure they know what’s at stake. If you’re retiring, consider Extended Reporting Period or “tail” coverage so you can sleep at night. This covers your old reports into the future. It can only be purchased from your current carrier and only for a limited time after the policy expires.

Buzz: And if you don’t have insurance?

Brauner: If you don’t have insurance, consider getting it because even good real estate agents and brokers get sued. Consider this: as expensive as E&O seems these days, the most recent “average cost of defending a claim” that I have seen is $25,000. If you have to defend yourself out of pocket, that is many decades’ worth of premium.

Agents may also want to consider general liability insurance. Business Owner's/General Liability Policy has been compared to a homeowner’s policy for your business. Coverage includes but is not limited to property damage to others, bodily injury, business interruption and loss of income coverage, personal property coverage (computers, client records, buildings) and employee dishonesty. Real estate agents/brokers should consider this coverage. Minimum premiums are around $500.

Buzz: Any closing thoughts?

Brauner: I’d like to thank everyone who has entrusted their insurance to us over the years. Our mission at OREP is Business by the Golden Rule, which means treating everyone the way we want to be treated; with honesty, efficiency and courtesy.