In recent months I have received hundreds of phone calls and emails from agency owners (3rd party, debt buyer, attorney) faced with significant price or coverage issues related to their E&O policy. Fortunately, there are insurance solutions that specifically deal with the unique needs of the collection industry.
Price Issues:
It is common for agency owners to face a situation where their insurance policies are not renewed or where their premiums are high and their current agent has limited options for them. The renewal premiums make the coverage unaffordable and their current broker is unable or unwilling to provide them with options. If your broker is simply submitting a renewal application to your current carrier, demand that they do more. Introducing competition into your annual renewal process will provide you the assurance that you are paying a fair market price/premium for your particular policy needs. If your current broker still is unable or unwilling to market your account to multiple insurance providers find someone who will.
Coverage Issues:
Unfortunately, it is equally common for agency owners to select a vendor who is willing to market their account to multiple insurance providers, but lacks the experience necessary to understand the risks specific to the collection industry. In my experience, collection agencies many times rely on their insurance broker/agent and do not always read the policy in its entirety to understand what is covered and what is not. I have seen a number of policy forms over the years that specifically excluded FDCPA, TCPA or FCRA violations.
Here is an example of how an agency that understands your industry and places accounts with multiple carriers can help:
I recently assisted a large collection law firm that for years had been struggling to find a policy that appropriately addressed their specific operational risks. While they are indeed a law firm and it is imperative that they are covered for legal malpractice claims, they also maintained a significant collection floor that carried risk more closely resembling that of a standard 3rd party collection agency. The standard lawyer’s professional liability (LPL) policy did not do a very good job of addressing both areas of risk.
That is where we came in. We were able to assist them in obtaining an errors & omissions policy form that appropriately addressed their specific operational risks. Their firm also provided legal services outside of debt collection, so we assisted them in obtaining a secondary LPL policy for those risks. Both policies combined to form a better risk management strategy for the firm, helping them to address and settle claims more efficiently.
It is easy to service an account when everything is going well. You need to be certain that you have partnered with a vendor that can take care of you when the times get tough. In my opinion, that is when we truly earn your business anyway.
Cornerstone Support is the premier licensing and insurance provider to the collection industry. If you have any questions regarding state licensing or insurance please email info@cornerstonesupport.com or call (770) 587-4595.
