EDS had a lot riding on the major military contract it was bidding on. The interested party required certain items of equipment be sent to it for needed testing prior to awarding the contract. EDS and the two other companies working on the bid with EDS supplied equipment worth over $5,000,000 to the interested party. Unfortunately, and after years of working with the client, EDS discovered it had been scammed, that there was no major military contract and the equipment sent was now missing IN ACTION!

To add insult to injury, the two other companies working on the bid sued EDS for negligence. The last straw came when EDS' commercial general liability carrier denied coverage because there was no occurrence. In the ensuing lawsuit, the court agreed that EDS and the other suppliers willingly sent their equipment to a third party and that doing so did not constitute either an accident or an occurrence under the CGL coverage form.

In addition to the loss of its equipment, EDS also sustained loss of its reputation as well as incurring the costs to defend itself in the lawsuit brought by the other two companies and the damages that might be awarded to them. The court determined that the CGL coverage form did not apply to this situation. Could the property coverage form provide such coverage?

Rough Notes magazine provides articles on how Customer Service Representatives (CSRs) can improve their customer service. Part of that service is learning not to promise or suggest more coverage than the policy provides.

Checklists are valuable tools to use when discussing coverages with a customer. When used properly and consistently, they can provide guidance and suggest ways to improve a customer’s insurance program. They can also remind your producers and CSRs to always discuss certain important coverages. When all parties sign a checklist, it can also be used as important documentation in an errors or omission lawsuit.

Rough Notes magazine is excited about our new feature article, "Capitalizing on Benefits." Each month this feature profiles the employee benefits business operation of a leading property/casualty agency.

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