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Some Helpful Hints For Your Sales Staff
by Curtis M.
Pearsall, Vice President, Agents' Errors and Omissions Department
Over the last half dozen years or so, approximately
50 percent of all E&O claims have targeted the agency sales staff
as the cause of the alleged error with the internal staff being the
target
of the remainder.
Now that 2005 is upon us, agency principals and sales
staff should take heed of some basic steps that can be taken to minimize
the potential
for an E&O claim hitting your agency. I break these tips down into
3 distinct categories: know the product, know your client and know your
partners.
Know the product:
- Sell what you know and know what you sell.
This industry has some unique coverages and terms and
before you go out and make your sales calls, be certain that
you know the coverages that you are going to be discussing.
- Use an exposure analysis survey/checklist for
the type of risk that you are going to visit and make sure
that you understand the coverages that the survey speaks to.
Proper use of the survey will help you sell more insurance.
- Ask your companies for some claims examples
to demonstrate to your client that claims do happen and that
the proper protection is needed.
- Sell the exclusions. Surveys indicate that
clients want to know what is not covered as much as they want
to know what is covered.
- If a client asks a question that you don’t
know the answer to, what do you tell them? Do you guess or
do you tell them that you don’t know and will get back
to them?
- The E&S/wholesale marketplace uses
unique forms and exclusions. It is important to ask your wholesaler
for a copy of the forms that will be used and examined and
the coverage/exclusions properly communicated to the customer.
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Know your client:
-
The number one cause of E&O claims is the failure to provide the
proper coverage. It is important to identify the exposures your
clients face and recommend the appropriate coverage.
- Don’t make the decision for your client as to
whether they want the coverage or not. Offer it and document their
decision.
- Don’t renew or rewrite as is—talk with
your clients to get an update on their exposures. Also, just because
they
didn’t
buy it last year when you recommended certain coverages does
not mean they won’t buy it this year. Recommend it and document
their decision.
Know your partners:
- Not all insurance companies have the same financial
condition. Your agency should have a stated position that insurance
will not be placed with carriers rated less than “B” by
AM Best. Since the ratings of these carriers can change, they
should be checked periodically via www.ambest.com.
- Each insurance carrier has different binding
authority guidelines for their agents. Make sure that you and
your staff knows what these guidelines are and adheres to them.
- When dealing with the E&S/wholesale marketplace,
agencies typically don’t have any binding authority.
Also, many wholesalers require money to bind an account and
will not back date coverage.
- There is no substitute for being honest with
your carriers. They may be your friends today but if they find
out that you misled them into writing an account, that friendship
may be over and they may even sue you for misrepresentation.
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By
following these simple rules of thumb, you may avoid E&O claims
and possibly sell more insurance.
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