Keeping CSRs in the Loop

by Curtis M. Pearsall, Vice President, Agents' Errors and Omissions Department

I was going to respond, "Take care of what?" But it was too late; he was already out the door. This happened to me many years ago at my first agency job when, as a CSR handling S-Z, I was asked by one of the agency producers to handle a particular matter for one of his commercial clients. The problem was that he didn’t give me much guidance or direction on what he wanted me to do. So, I tried my best to figure it out and although I can’t remember exactly what happened after that, I don’t remember any disasters occurring.

Unfortunately, this same scenario happens frequently in agencies around the country. With pressure on producers to sell insurance, many have the uncanny knack of handling the account up to the point of the sale and then looking for the CSR (more appropriately named Account Execs.) to take it from there. While this doesn't sound abnormal, the problem starts when the CSR is not sure what the account is all about or what the insurance requirements are - and not prepared to handle the file or respond to client inquiries.

I firmly believe that CSRs are much more important in agencies than anyone, including the agency principals, gives them credit for. While it is a disservice that many are underpaid, it is equally a disservice that they are under appreciated.

Here are some examples where an E&O claim resulted because the CSR erred as a result of the agent / producer not advising them of additional details pertinent to the file.

The producer requests the CSR to write coverage on an account. Unfortunately, the producer never advised the CSR that the lease agreement required the account (a tenant) to buy coverage protecting the landlord.
A request comes into the CSR to issue a Certificate of Insurance to a commercial customer to comply with a business agreement or contract. Due to the unavailability of the producer, the CSR is pressured to release the Certificate without the agent / producer ever reviewing the document for accuracy. If the certificate is not accurate and a loss occurs, the client is going to allege that that they relied on the certificate as proof of coverage.
One of the commercial accounts (a contractor) needs a bond with a limit greater than the agency has authorization for. Not having the producer to discuss this with, the CSR issues multiple bonds to equal the limit that the client needs only to find out later that the Bond Company does not allow that approach. The bond gets thrown out and the contractor loses a job. They then proceed to bring a suit against the agency for loss of business income.
An account gets canceled but the account calls the CSR and advises that the matter that resulted in the cancellation has been corrected and that he needs a Certificate. The CSR issues the certificate only to find out that the account mislead them. Unfortunately, with a newly issued certificate in their hands, the account feels that they have proof of insurance should something happen. They may be right!

Communique is published for our agent-customers for informational purposes only and is not intended to be, nor should it be relied upon as legal advice. Legal questions should be directed to your legal advisor.