Reduce your E&O exposure by educating your staff

by Curtis M. Pearsall, CPCU, AIAF, CPIA
Special Consultant to the Utica National Agents E&O Program

There is no doubt your agency receives phone calls daily from customers asking a variety of questions, such as, “Do I need to buy the extra coverages when I rent a car?”, “Does my insurance company need to know if my son/daughter has a car while at college?” or “I have a co-insurance clause on my policy. What does that mean?” While your customers ask these questions for varied reasons, one thing is certain: your customers rely on the response and are probably documenting it.

Knowing this, how confident are you these questions are being answered accurately and completely? If you are unsure, what – if anything – should or can you do about it? There are several options worth considering.

Staff development is a goal of every agency. Through it, the agency will gain tremendously in their reputation in your community. Since every staff member has his or her own strengths and weaknesses, the objective is to identify an educational goal for each that he or she would be responsible for achieving. The issues can be varied and may involve technical knowledge, sales skills, software proficiency or customer service, to name a few.

Let’s look at some initiatives that will enhance your staff’s, and ultimately your customers’, knowledge.

Exposure Analysis Checklists, webinars and more
Beginning with technical knowledge, many agencies have found tremendous benefit in using Exposure Analysis Checklists. Two of the more popular are Producer Plus (Vertafore) and Producer Online (Rough Notes). While there is no doubt they are a great tool to identify your customers’ exposures, these checklists are also an effective resource for providing your staff with extensive technical and underwriting information on more than 600 SIC classes of business.

For example, suppose one of your producers is interested in writing the local marina, but is unsure of its exposures and what specific coverage should be considered. By going into these checklists, it is easy to “become an expert” on this class of business, with a solid overview of this class and with significant underwriting detail and coverage considerations. Think of the checklists as a virtual insurance encyclopedia. Plus, these checklists are not just for producers. The remainder of the agency staff, especially the CSR/Account Executive level, will benefit greatly from them.

There are also other means for enhancing technical knowledge. Reach out to your state agents’ association as they are active in this regard and offer seminars your staff can attend. Webinars have become popular as a method to provide solid education without having the staff leave the office. Webinars typically cover a wide variety of topics, and your staff should be able to easily find one to meet a specific need.  
 
Depending on the individual and his or her responsibilities, give serious consideration to one of many designation programs. The overwhelming majority of these are worthwhile and will benefit both the individual and your agency.

Whichever coursework is considered, it is important the decision is agreed upon by you and your staffer. This will ensure a greater degree of “skin in the game.”

A changing dynamic
Many agencies use agency staff meetings for education purposes. A starting point is identifying the questions your staff receives from customers. Use staff meetings to discuss these questions and provide the staff with the necessary explanations. Consider a degree of role-playing to assist the staff with effectively communicating the information to customers, as sometimes just knowing the answer is not good enough; you need to know how to communicate it.

To truly get the maximum benefit, look to enhance technical knowledge by developing sales skills. Your account development initiatives will be that much more successful by providing the staff with the tools to better understand the prospect and more effectively enhance the relationship. Combining technical proficiency with solid marketing and sales techniques will certainly produce a much greater result than encouraging one without the other.

Other education issues
Don’t overlook the value of providing your staff with training on your agency software/systems, etc. To achieve maximum benefit, management should clearly layout the expected use of the system, with a focus on the timeframes for completing various tasks. Moreover, training on programs such as Word, Power Point, Excel or Access, to name a few, should be considered and will undoubtedly lead to greater efficiency.  

Discussing your staff’s perception of the agency’s Errors & Omissions exposure with them can be enlightening and beneficial. Virtually every aspect of an agency has an E&O exposure. Assisting the staff with understanding this – and what can be done to minimize the chances of a claim being made – will prove valuable.

As you educate your staff, your customers’ understanding of their insurance coverage will also be enhanced. Plus, your staff’s confidence will come across loud and clear when a customer calls with a technical question. Making a commitment today to a heightened level of education for your staff may just save you from an Errors & Omissions claim down the road.