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How Well Do You Know What
You Are Selling?
by Curtis M. Pearsall,
Vice President, Agents' Errors and Omissions Department
The other day I was reviewing my health
insurance with my 18-year-old who is ready to go to college. After
about 15 minutes,
I think he realized that I really did not know what I was talking about.
And in all honesty, despite being in the business for 30 years, when
it comes to health insurance or a variety of other employee benefits
coverages, I am out of my league. If I were an insurance producer selling
this coverage, I would be an E&O nightmare waiting to happen.
Do you have any insurance producers
who are E&O nightmares waiting to happen?
Regardless of the market, oftentimes producers are put
in a position of selling a multitude of products. In many cases, these
products may
not be ones that they have sold much of and they may not know all
of the finer coverage details. Diversification, especially among smaller
agencies, is a sign of the times. However, it is imperative that when
diversifying, sufficient time should be taken to:
- Understand the
needs of the client
- Fully understand the products
you are selling
Without accomplishing these, you are an E&O
nightmare waiting to happen.
There are many E&O
claims that have occurred and been caused by producers as a result
of lack of expertise.
Many of these claims could have probably been avoided.
Here are some helpful tips that you may
want to consider:
Many agency management systems have
an exposure analysis checklist either built in or available
as an
add-on. Among the common features are full descriptions
of classes of business and the exposures they present (banks,
dry cleaners, etc.) as well as full descriptions of
the various coverages. Before your producers go out on
a sales call, this would be an
excellent starting point to familiarize themselves
with the specific exposures and coverages. This will not
only allow
them to speak with more authority and credibility to their
prospect, but could make the difference as to whether or
not they make the
sale. Your client is trusting that you, as their current
or future agent, know the products you are selling.
As an insurance producer, what do you say
when you are asked by the client whether something is covered
or not? I know what you tell them
if you are positive, but what do you tell them if you are not
positive? It is important to recognize that
if you are not sure, the best thing to say is that you are
not sure but will get the answer. If you tell them it’s
covered and then they have a claim that gets denied, an E&O
claim will be following shortly.
If you move coverage from one company to
another, it would be prudent to analyze the differences between
the two
forms and bring to the client’s attention the shortcomings
between the forms. Once again, if you move coverage from company
A to company B and the company B form is not as broad, what do
you tell the customer when they ask if there are any differences?
If there are differences and you don’t advise them, you
are now an E&O nightmare waiting to happen.
If you are the agency owner and part of
your many responsibilities includes the management of the sales
staff,
how comfortable are you with their knowledge of coverages
and exclusions? Do you periodically travel with them
on sales calls? Have you tested their technical knowledge
by asking them
coverage type questions? You may want to give these
some serious thought, especially for those producers who have
been
with you for only a short period of time.
Proficiency in sales skills takes training
and practice. Building that same degree of proficiency for product
knowledge (for both classes and lines of business) takes
training as well. Make sure that you dedicate the time to learn
this industry. Your customers are counting on you.
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