Agency
Automation: Friend or Foe?
Part 5
by Curtis M. Pearsall, Vice President, Agents' Errors and Omissions Department
Over the last few months in this series, we’ve explored automation and the related E&O issues, including the topics of upload, download, and transactional filing. There is more to talk about regarding automation though. In this issue, we’re going to look at several topics involving automation and the use of electronic media, including the Internet. While Utica has not yet experienced any E&O claims involving some of these topics, I will do my best to give you some advice and perspectives to think about in the spirit of “an ounce of prevention...”
Carriers turning off the paper.
Back in the late 70’s early 80’s,
I remember the slogan, "Paper free in 83." Well, that
didn’t happen but it appears now that many carriers are looking
to make headway and are turning off the paper to the agency. As the carrier
processes the transaction, the agency copy of the declaration page is
stored on your specific secured site. Every day, you receive an electronic
notification of those policies that were processed. Whether the transaction
is a new or renewal policy, an endorsement or cancellation transaction,
those files should be reviewed to ensure their accuracy. Based on a reliance
on paper, many agencies print off a copy of the declaration page and
put it in the client paper file. Whether you receive a copy of the declaration
page in the mail or on your secured site, you need to take the steps
necessary to ensure that the policy transaction was handled accurately.
“24/7” customer
service.
This issue is coming up more and
more as agencies seek to have a competitive advantage over the competition.
If you provide clients with the opportunity to contact you virtually
anytime, there are a few things that you need to consider. Whether your
client is contacting you electronically through your website or leaving
a message on your agency voice-mail, you must make it very clear that
coverage cannot be bound, altered, or cancelled without talking to an
agency employee. This message should be very clearly communicated so
as to avoid any misunderstanding. You may want to consider some material
that goes out with the policy that makes it very clear that coverage
changes need to be handled “live and in person.” The danger
obviously lies with a client advising you that he or she needs coverage
bound on an exposure for which your agency contract does not give you
binding authority.
A situation that is similar to this involves agencies that are open on Saturdays for improved customer service. You need to be careful to stay within the binding guidelines of your carriers. If you don’t have the authority to bind the coverage, make sure that your client knows that, in case a loss occurs before you can discuss it with the company. If you have bound coverage, I would advise sending some type of communication to the carrier (e-mail, fax, etc.) providing the details of the transaction. This way, there is a date and time-sensitive document to back up any potential problems.
Electronic communication with clients/carriers.
I was recently asked, “What
constitutes adequate documentation?” As with most business decisions,
common sense should be factored in. Anytime there is an ongoing series
of e-mails going back and forth, your agency file (paper or electronic)
should reflect all of those e-mails, not just the last one.
Remember, as you deal with automation, make sure that you build in the necessary precautions/protection that will serve as your defense should a claim be made against your agency. As your E&O carrier, we will defend you in the event that a claim is made against you, and it helps the cause for both of us to have as much proper documentation as possible. Discuss these issues with your staff to ensure they know what is expected and that the expectations are applied consistently.