How does your E&O policy address “subpoenas”?

One only needs to access the news on virtually a daily basis to hear the reference to a subpoena. It is vital that agencies (especially management) be aware that the word subpoena can find its way into the insurance agency world. What exactly is a subpoena?

Wikipedia provides the following definition:

“A subpoena or witness summons is a writ issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of subpoena:

  1. subpoena ad testificandum orders a person to testify before the ordering authority or face punishment. The subpoena can also request the testimony to be given by phone or in person.
  2. subpoena duces tecum orders a person or organization to bring physical evidence before the ordering authority or face punishment. This is often used for requests to mail copies of documents to requesting party or directly to court.”

How do E&O policies reference subpoenas? Most often, one will find the reference in the definition of a claim with language such as: “Claim” means a written demand or written notice, including service of a subpoena….”. 

So, what does this mean if your agency is served with a subpoena? Chances are the subpoena is a request for records or documents of some type. While this may sound harmless, this is not a matter to be taken lightly so the best approach is to:

Contact your E&O carrier immediately !

The reason to do so is that there is a good chance that your agency could be party to an E&O claim in short order. By contacting your E&O carrier, 1) you are satisfying a condition in your E&O policy and 2) you are going to benefit from the experience and expertise of that carrier.

What is the downside in failing to contact your E&O carrier? Unfortunately, this has occurred from time to time and has resulted in the agency potentially not getting the necessary coverage when a lawsuit or E&O claim develops. If the agency were to receive a subpoena and not notify the E&O carrier, when an E&O claim develops, the carrier could take a position of “denied for late reporting”. 

So, when your agency receives a subpoena, take it seriously. Make sure that all staff are aware of the importance of this issue so that they can take the appropriate action.

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