The numbers don’t lie: Five common errors flagged by Broker CoPilot’s Policy Checking.
- Manoj Singh Gosain
- Aug 26
- 5 min read
Updated: Sep 15
Every error in a policy carries consequences, but some occur more frequently and create greater financial and compliance risks than others. Drawing on real-world data from Broker CoPilot’s Policy Checking, we’ve identified the five error types that consistently surface across brokerages.
In this article, we take a closer look at these high-risk discrepancies and how Broker CoPilot helps brokers catch them before they cost clients and firms alike.
In this blog, we take a close look at:
|
Limits and coverage discrepancies
When policy limits, deductibles, or essential coverages don’t match the original quote or binder, the result is immediate misalignment between what the client expects and what the policy delivers. These discrepancies lead to dual exposure scenarios, leaving clients underinsured and brokers exposed to liability.
Examples:
Coverage limit mismatches, such as a per-occurrence limit listed as $500,000 when the quote specified $1,000,000.
Deductible variances, for example, the deductible is set at $5,000 instead of the agreed-upon $1,000.
Essential coverages, such as cyber liability or professional liability, are omitted from the policy.
Aggregate limit errors, where the annual aggregate limits are incorrectly calculated or transcribed.
Why it matters:
For clients: Limits and coverage errors can leave businesses catastrophically underinsured, with claims far exceeding the actual protection in place. A manufacturer expecting $5 million in product liability coverage but receiving only $1 million faces not only financial strain but also the risk of bankruptcy if they are hit with a major product defect lawsuit.
For brokers: These discrepancies represent one of the highest-risk categories for E&O exposure. When coverage gaps are discovered during claims, brokers face allegations of professional negligence, with settlements often ranging from $50,000 to $500,000, depending on the cost of uncovered losses. Beyond the financial cost, these disputes can permanently damage client relationships and reputations.
Forms and endorsements compliance failures
Insurance regulation demands precision, and missing or incorrect forms can compromise an entire policy. These errors often arise from complex state-specific requirements or endorsement dates that don’t align, putting both coverage and compliance at risk.
Examples:
Missing mandatory forms, such as uninsured/underinsured motorist rejection forms, in states requiring an explicit waiver.
TRIA endorsements omitted, where acceptance or rejection isn’t documented.
Date misalignment, with endorsement effective dates that don’t match the policy period.
Incorrect endorsements, such as attaching the wrong state-specific form.
Why it matters:
Regulatory violations: Missing mandatory forms can make a policy voidable and even trigger regulatory sanctions. In some jurisdictions, the absence of required endorsements renders a policy legally invalid, leaving clients entirely unprotected.
Claims complications: Incorrect or misaligned endorsements create headaches during claims processing, often leading to delays, denials, or disputes. These complications not only damage broker–client relationships but also significantly increase the likelihood of E&O exposure.
Named insured and additional insured inaccuracies
Errors in naming insureds, whether the primary entity or additional insureds, create fundamental coverage validity issues. Even a comprehensive policy can be rendered ineffective if the wrong entity is listed, a subsidiary is omitted, or a contractual partner is not properly added..
Examples:
Missing business entities, such as subsidiaries or affiliates, are not listed.
Trade name omissions, where DBAs (doing business as) are excluded.
Spelling or registration errors, where entity names don’t match legal records.
Additional insured gaps, where contractors, landlords, or other parties are not designated despite contractual obligations.
Why it matters:
Claim denial risk: Carriers can deny claims when losses involve entities not properly named. For instance, a subsidiary’s claim could be denied if only the parent company is mentioned in the policy.
Contract breach exposure: Missing additional insureds can put clients in violation of agreements with vendors, landlords, or business partners. This creates additional legal and financial exposure beyond the claim itself, while opening brokers to allegations of professional negligence.
Policy period misalignments
Coverage dates are the backbone of every policy, yet even small errors in effective or expiration dates can create costly overlaps or dangerous gaps. These mistakes often stem from miscommunication between systems, stakeholders, or during renewals, and they can leave clients unprotected without realizing it.
Examples:
Effective date mismatches, where policies begin later than expected, create uninsured periods.
Expiration date errors, with policies ending earlier than intended.
Renewal timing issues, leaving gaps between expiring and renewing policies.
Binder extension failures where temporary coverage is not extended into the policy's effective period.
Why it matters:
For clients: Even a single-day gap leaves them exposed to unlimited liability, while overlaps force them to pay thousands in unnecessary premiums without additional protection.
For brokers: Gaps and overlaps not only damage client trust but also create direct E&O exposure if uncovered losses occur during periods when clients thought they were protected.
Rating basis and premium calculation errors
Premium accuracy depends on correct classifications, rating factors, and data inputs. When these figures are entered incorrectly or overridden, the errors often compound over time, leading to distorted pricing and large adjustments during audits.
Examples:
Manual rate overrides are where standard rating algorithms are adjusted incorrectly.
Wrong classification codes, with business operations coded improperly.
Rating factor discrepancies, such as payroll, square footage, or vehicle counts entered inaccurately.
Experience modification errors where workers’ compensation modifiers are applied incorrectly.
Why It Matters:
Premium leakage: Undercharged premiums caused by rating errors often result in carriers demanding substantial additional payments. Substantial adjustments are common when errors are discovered in an audit.
Audit failures: Incorrect rating basis information complicates annual audits and can trigger significant adjustments that strain client relationships, disrupt cash flow, and erode confidence in the broker’s oversight.
From error-prone to error-free
Broker CoPilot helps prevent these critical errors with:
Systematic comparison algorithms with 1000+ data points that cross-check quotes, binders, and policies.
Real-time regulatory monitoring to flag missing forms and endorsements.
Seamless integration with carrier systems for instant validation.
Cost-effective performance reduces the time required for Policy Checking by up to 80%.
99%+ accuracy with P&C domain libraries and a proprietary P&C intelligence stack.
Once you submit your document for policy checking, Broker CoPilot delivers a consolidated output that highlights every variance and provides actionable insights. This ensures brokers can resolve discrepancies quickly, protect clients more effectively, and reduce exposure to costly E&O claims.
Organizations using Broker CoPilot’s Policy Checking report up to 80% time savings and significantly reduced manual effort.
The bottom line
Policy Checking errors are more than administrative oversights; they are high-stakes risks that can devastate clients and expose brokers to costly litigation.
By systematically flagging discrepancies in limits, forms, named insureds, periods, and rating basis, Broker CoPilot transforms Policy Checking from a reactive task into a proactive safeguard.
For brokers, that means:
Stronger client protection
Reduced E&O exposure
A reputation for accuracy and trust
In an industry where accuracy is non-negotiable, the brokers who embrace intelligent automation won’t just keep pace; they’ll lead.
About the author:
Manoj Singh Gosain
Head of Broking Operations, BluePond.AI
With nearly 20 years in P&C insurance and large-scale operations, Manoj draws on his expertise in Policy Checking, compliance, and client servicing to provide meaningful and actionable insurance insights. At BluePond.AI, he drives the integration of domain knowledge and automation, raising the bar for faster, more accurate client outcomes.
