We get so caught up in our daily crises and day-to-day workloads that we often don't have the time to take a good look at how our agency is handling business. But E&O exposures are too important to neglect. Here are a few areas you might want to examine:
Cancellations. Whether you're canceling a policy because of company/underwriting reasons, an oversight on the agency's part, or the insured's fault (for instance, non-payment), remember to inform insureds of cancellation either every time or never at all. Make sure they don't call asking why there's no coverage on a claim.
The Account Review. Almost every agency principal I speak with tells me that his or her agency has a program of annual renewal review for Commercial Lines-but not for Personal Lines. Make sure to institute reviews for both areas. One account I was working with received a call from an attorney stating that his client was never offered Liquor Liability insurance. The agent knew that he did offer the coverage because he knew that such coverage was offered to all his Commercial clients in a consistent program. Put together a checklist or send a letter out 60 days before renewal to review all your accounts. Protect the agency and the insured-and increase revenue!
Claims. The insured pays you every year to have coverage in the event of a claim. So take care of them-now! After receiving a claim from the insured, following up is paramount. If the agency receives and processes the claim, follow up with a letter to the insured stating that the agency has sent the claim to the company adjuster, the insured will soon be contacted by the adjuster, and the insured should direct any questions to the agency. A few days after that, make sure the insured received the contact from the adjuster. Make sure that the insured is happy with the outcome, and you'll have a long-time customer.
Backlog. Paper, paper, paper-it never stops when you work with insurance. Do you know how much paper is on each employee's desk? Do you know how far behind each employee might be? Think about checking each employee's desk! Have employees develop a backlog report. Finding out how efficient the office is will give you a better idea about whether you're at risk for E&O claims.
Documentation. Producers seems to be terrible at documentation. Are the producers in your office recording all in and out phone calls, in and out visits, and any internal notes on the computer system? This is a huge area. If conversations are not documented by the producer or CSR, your agency could get into trouble.
Accounts Receivable. How are the accounts receivable in your office? If you have a lot of agency billing and have problems keeping up with receivables, you had better start holding meetings as soon as possible. Invite everyone involved: producers, managers, CSRs, and accounting personnel. Make employees accountable for the monies. One agency I know actually deducts the monies from the producer's paycheck if money is not collected-a great incentive! Most of the offenders in this area are the agency's owners-but have meetings anyway. Make employees accountable, and get the receivables up to date!
Expiration Report. At the end of the month, run your expiration report 90 days ahead to catch this month's possibly missed renewals and the next months' renewals still to complete. Inspect all renewals, and delegate an employee to review them as a final check!
Prospecting/Account Rounding. Not many principals can honestly say they have a prospecting program in their agency. If growth is in your future, start an organized prospecting program and keep meetings going to review the progress. Most agencies start one and then just drop it. Even if your CSRs ask only three insureds three questions per day to account round, the money will come in. So start a program and keep it going!
Quiet Hour. If you don't have a quiet hour, initiate one now. Delegate blocks of time to each CSR-for instance, Mondays and Wednesdays from 9 a.m. to noon-for them to get caught up and keep their sanity. Enforce the policy strictly, and the quality of your customer service will improve.
These tips are a compilation of what agencies have been telling me over the past nine years. Feel free to contact me if you want to discuss any of this.