Many collection companies/agencies proclaim they are insured by pawning off bonds as “insurance.” Bonding protects a creditor in the event a “trust agent” or “collection agent” absconds with the proceeds of a collection. Liability insurance is totally different.


Professional liability protects a client from any potential wrongdoing committed by a collection agent during the collection process. We exist in a highly litigious society; consequently, we have taken steps to secure this coverage to protect our clients against the risks associated with our collection activity.


Any client contact with the debtor after the collection process starts will void the professional liability insurance package that is in place. This includes just “listening” to the debtor even if the subject matter is irrelevant to our contact. Upon discovery that a debtor placed for collection is attempting to make contact, it is our recommendation that the debtor be made aware that “all dealings must be with Williams & Williams” and then bid the caller “good day” and gently depress the telephone hook set. A debtor feels confined and, thus, will continue to talk if one is willing to listen.


Since 1985 and after 70,000 plus placements, not once has Williams & Williams, Inc. had to rely upon professional liability insurance to protect a client.  We realize that there could always be a first time occurrence, which is why this coverage is in place.  This is a necessary “due diligence” responsibility to our clients. Debtors typically are insolvent. An opportunistic debtor could allege wrongdoing when there is no legitimacy to such a claim. 


It is essential that creditors utilizing an agency always inquire about liability insurance.  Many homeowners will not allow contractors to work on their homes without liability insurance.  The companies that Williams & Williams, Inc. represent deserve the same type of protection when working on a creditor’s delinquent receivables.


Should an “incident” occur and, hindsight being 20/20, if a CEO asks the individual in charge of the collection process if the agency has liability insurance – what should the answer be?