Avoid fraud by treating E&O insurance for what it is: a serious investment

State insurance commissions, consumer groups and professional organizations offer advice on how to avoid being taken to the cleaners on your E&O insurance.  Some of the most often cited tips:

• Check and see if the agent you’re dealing with, and the insurance company, are licensed to do business in your state. Your state’s department of insurance or related department will have contact information on the state’s website and also in the blue pages.
• Never pay the agent, only the insurance company itself.  When you write a check for a down payment or a premium, always make it out to your insurer.  Beware agents who want you to make the check out to them personally.  And never pay in cash!
• Relatedly, get a receipt for everything. Always get a written receipt following the payment of your premium that includes the name of the insurance company and the agent and/or agency.
• Never sign a form that includes blank spaces, even if the agent assures you they are just a formality.
• Ask for a copy of all documents. Especially, but not exclusively, anything you sign!  Save every piece of paper explaining your coverage and your policy.  Keep them on file with your policy.  If the agent uses a laptop computer, insist on a hard copy version of what you were shown.
• If you do not receive a policy within two weeks of applying for insurance, contact the insurance company, and if necessary, your state’s department of insurance.
• If a new policy replaces an old policy, make sure the old coverage is not terminated until the new policy has been issued.