How Does Your Agency Rate

Do you document all phone calls? Obviously I am not referring to documenting when your tee time is but any and all calls from your companies or customers on coverage modifications. These phone records should become part of the agency file. If coverage is being deleted, the best approach is to have the customer provide you with written confirmation. Some agencies are reluctant to do that, so in such cases, it’s a good idea to send a letter to the customer confirming your understanding of their request.

Do you use an exposure analysis checklist program as part of your standard operating procedure? For as long as I can remember, the number one cause of E&O claims is failure to provide the proper coverage. Whatever your agency looks like, committing to this practice is a very positive step in the right direction. Many of the agency management systems either have an exposure analysis checklist built in to the software or they provide a link to other software that handles this task. “Renewing as is” or relying solely on the application does not cut it. You need to use a checklist that identifies the various exposures of risks. This will enable you to recommend to your clients the coverage that they should have. If they indicate that they don’t want it, be sure you have them sign off. This checklist with your customer's signature on it indicating that they didn’t want a certain coverage will help to provide a solid defense should the client allege that this coverage was never discussed. In many cases, the software that contains these checklists is not expensive and it will pay for itself many times over with the additional coverages you will sell.

Do you actively attend E&O seminars? Do you encourage education within your agency? Education translates into knowledge. When your staff knows the product that they are handling, they will position your agency as a professional shop with quality people. Utica has statistics that provide positive proof that E&O seminars and insurance designations make a difference in your E&O loss ratio.

Do you actively communicate with your customers on issues of importance to them? Today’s consumers want to be more informed so they can make better buying decisions. Periodic newsletters detailing how insurance works, how claims are settled, what some common insurance terms mean, as well as what is and what is not covered are invaluable. Your agency’s website, properly constructed, provides a perfect medium to educate your customers or to attract new customers.

Do you check all policies/endorsements for accuracy before mailing? Believe it or not, the quality of the work coming out of your companies is not always perfect. If the policy is not consistent with what was agreed upon, you need to catch it. Failure to do so could impact the resolution of a future E&O claim.

Do you inspect all insured premises? Imagine that one of your homeowners’ clients has a fire and it is discovered that the fire was caused by a woodstove. The company pays the claim and then sues you because you didn’t have the authority to bind homeowners’ policies with a woodstove. If you had inspected it and seen the woodstove, you could have saved yourself a big headache.

Do you maintain a written record of the details of all contracts with clients? How do you know if you are providing the right coverage if you don’t have a copy of their contracts?

Bottom line — you can be a manager who waits to correct a mistake until after a claim occurs, or you can be a manager who prevents the mistake from ever happening. Which type of manager are you?