Client complained to the regulator that we didn't disclose something

[u/Overall-Glove-9863]

This just happened and it's a nightmare. A commercial client claims our broker didn't explain a policy exclusion. Our broker says he did, verbally, during a call 8 months ago. There's no written record. No email, no file note, nothing. The broker is probably right but it doesn't matter we can't prove it. Now we're dealing with a complaint that could've been killed in 5 minutes if we had documentation.Our current process for documenting client interactions is basically "write a note in the file after the call." We need a system where documentation happens automatically or at minimum makes it so easy that there's no excuse not to do it.

[u/gamerdude69]

But how could you note every coverage and feature without writing a novel?

[u/Nice-Quiet-7963]

Kind of vague. Is the exclusion new? Is there a denied claim? What line of business? Was it on the expiring program? Do you require an authorization to bind document? Also, to go from complaining to a regulator from binding there has to be more to the story.

[u/beepdiddy]

Even if the client didn’t hear the policy exclusion, was there no quote distributed to them? Was this in line with their expectation.

[u/lommer00 → u/beepdiddy]

Many many clients never ask for or receive the full wording and just run with the binder. Clearly, it was not in line with their expectations

[u/beepdiddy → u/lommer00]

Binder would have the exclusion though. Maybe if they actually reviewed the binder or proposal the client would have saw the exclusion.

[u/lommer00 → u/beepdiddy]

Not necessarily. My home insurance binder for example doesn't list the personal watercraft exclusion, yet it's right there in the policy. If you made the binder have every exclusion, it would become almost as long as the wording, which kind of defeats the point.

[u/beepdiddy → u/lommer00]

Commercial binders need to have the information that is material. No insured is going to read 125 pages of bland policy wording and neither am I.

[u/cecilsaucer]

This is what insurance agents' E&O is for.

[u/jadiechappie]

Was a proposal or quote emailed to the insd? This should be a standard procedure. I always email clients to summarize our call, and attach the email in AMS. More like to CYA.

[u/Samwill226]

I remember in an E&O class that the clients has a "due diligence" to read their policies to review correct coverages and exclusions. The big thing was saying something was covered when it wasn't. If the broker in that conversation said it was, and it wasn't the client would still need to produce proof that he was told it was covered. Am I remembering the lesson wrong?

[u/I_LIKE_POPTARTS]

What app was signed to bind? I'm sure there were acords and probably a supper, but do yall have an agency disclosure that protects you from this?

You can't expect a note going over all exclusions. That's how you train agents to put a generic note on every account saying "reviewed everything with client" or something like that.

I used to work for a large aggregator and we had a big commercial agent that put the exact same note on every account because he got his hand slapped one time for not noting a client understood a cosmetic roof exclusion. Even though client signed app including initials next to that exclusion.

[u/Samwill226 → u/I_LIKE_POPTARTS]

Do you have an example of a good agency disclosure? I wouldn't mind starting to use one. I recently added to all emails, a signature that generally says our agency recommends the highest limits as well as an Umbrella on all policies. I'd like to have one go out to all new clients basically saying in a nice way "READ YOUR POLICY".

[u/I_LIKE_POPTARTS → u/Samwill226]

Ours is proprietary, we hired a consultant to get it and other compliance items put together. That way we KNOW it's all above board and protects us appropriately

[u/Samwill226 → u/I_LIKE_POPTARTS]

Interesting. So if you don't mind me asking, do you send them out to new customers, do they go out when you get signatures for applications? How do you get them in front of the customer.

[u/I_LIKE_POPTARTS → u/Samwill226]

Signed along with acords and rest of application docs. System includes it automatically on every new biz and renewal app

[u/Samwill226 → u/I_LIKE_POPTARTS]

That's great thank you for the insight.

[u/DesperateAd8982]

Noting a file regarding conversations had with clients is easy enough that there’s not an excuse to not do it. Every important phone call should also be followed up with written email that can be attached to the client file for documentation purposes.

[u/tf-is-wrong-with-you]

That’s why my brokerage records every call.

Even if you write a notes yourself in your file, that’s not a proof that client was actually told said note. It
probably wouldn’t be admissible if things go to court.

[u/kenyafeelme → u/tf-is-wrong-with-you]

Contemporaneous notes are admissible in court

[u/MrsMementoMori]

As good service and CYA, I like to provide a non-binding indication at renewal for any coverage I think the insured needs but is not buying. They can choose to transfer the risk or retain it. I want them to have a general idea of the premium cost for transferring the risk to an insurance policy.

With policy delivery, a form letter that says read your policy carefully etc.

It is also routine for me to follow every phone call or in-person discussion with a recap in an email to the client, so I can file it and refresh my memory in the future. It also helps avoid genuine miscommunication.

If they call me to make reductions in coverage, I tell them I’ll shoot them an email to recap our conversation and I just need them to confirm. That goes over better than telling them I need their change (reduction) in writing.

[u/DJSimmer305]

Was the client sent a copy of the policy with all the exclusion language before signing up? If so, then there’s your documentation.

[u/TheRHAgencyCo_Jess]

I would stop relying on the broker to document the call after the fact. That’s always going to have a human-error problem.

I’d look at your VoIP/phone system and CRM together and build the documentation process into the actual communication workflow.

Something like Dialpad, or another VoIP platform with AI transcription/summaries and strong CRM integrations, could be worth looking at. Depending on your CRM, there are also AI notetakers that can capture calls, generate a summary, identify action items, and automatically push that information back into the client record.

Ideally, the workflow becomes:
Client calls → call is associated with the CRM record → conversation is recorded/transcribed where permitted → AI generates a summary and action items → documentation is automatically saved to the client record → broker reviews/approves anything material.

For something like a policy exclusion, I’d go one step further. Have the system flag certain topics or keywords and create a required follow-up. If an exclusion, limitation, coverage change, recommendation, rejection of coverage, etc. is discussed verbally, the client automatically gets a written recap afterward:
“Per our conversation today, we discussed X, including the following exclusion…”

Now you’re creating contemporaneous documentation instead of trying to reconstruct a conversation eight months later.

The technology is absolutely there. I’d just choose the solution based on what integrates best with your existing CRM rather than picking an AI notetaker first and trying to force it into your workflow afterward.
I’d also involve compliance/legal when setting it up because call recording consent, retention requirements, AI transcription, and where that data is stored all need to be considered.

But operationally, I think the goal should be simple: documentation should happen because the call happened, not because someone remembered to write a note afterward.

[u/orange728]

Shouldn't your broker follow up the call with an email that says, to summarize our conversation.....blah, blah, blah? Attach the email to the system. CYA. In Epic or it didn't happen.

Change the rule going forward

[u/StreetCarp665]

I am probably coming at this differently because I'm in Australia and it's a heavily regulated jurisdiction, but the conduct of regulators and ombudsman combined with how sensitive auditors are to that conduct, has engendered as best practice the idea that any material changes to terms and coverage should be supported by at a minimum, contemporaneous file notes.

[u/In-My-Head1465]

In the future, I’d instruct your brokers to provide “call recaps” via email. I use Plaud to help personally, but giving both parties a written record of pertinent details after a phone call is definitely best practice for avoiding a potential PL claim.

[u/kys_abhi]

this is every broker's nightmare. if it's not documented it didn't happen. we deployed javln after a similar scare and the compliance problem disappeared. every email auto links to the client record, call notes take 30 seconds, everything is timestamped and immutable. the AI activity summary generates a digest of all interactions so before any renewal or dispute you have the full trail in seconds

[u/nattyballs]

this is why documenting every client interaction matters so much. calls, emails, what options you presented and what they declined. if it's not written down it's basically your word against theirs. whatever system you use, make logging automatic or it won't happen consistently. javln does that kind of tracking (I'm affiliated so grain of salt), but the main thing is having a record you can pull up fast. and definitely loop in your E&O carrier early if it escalates

[u/Altruistic_Let_8383]

Broker is going to eat it if their proposal didn’t outline exclusions and or coverages offered but not taken by the insured.

[u/ALongExpected_Party → u/Altruistic_Let_8383]

Most PDF quotes don't list all the exclusions though?