Our PAR insured’s client was a printer. When a print job is done incorrectly, it often leads to costly do-overs. Coverage is available to provide financial protection from such costs, however, the client printer did not have such coverage.

Although the PAR insured had the printer’s account for many years, it is unclear (because there was no file documentation, by way of exposure analyses or proposals) whether this coverage ever was brought-up to the printer. There also was no written confirmation that the printer had declined the coverage.

The printer did two jobs incorrectly; together they were worth about $250,000. Both jobs were redone at the printer’s expense. Later, the client printer asked its liability insurer to pay for the cost of the redo and learned there was no coverage. This made the client unhappy with the PAR firm, and the printer then obtained insurance from another agency.

Amazingly, even after switching agencies because of the missing protection, the printer still didn’t buy coverage for the cost of reprinting its own mistakes! Although the printer originally pressed for coverage for the entire $250,000, not adding the coverage after insuring with another agent and not reporting the loss promptly meant the printer would receive far less reimbursement than $250,000. In the end, PAR’s payment was $20,000 for indemnity and $25,000 for legal expenses.

Without proper documentation, there was no way to prove whether or not the printer knew about the possibility of coverage. This left the PAR insured open to E&O scrutiny. Once again, documentation -- putting it into writing -- would have made the difference.