Although most agencies seldom have an E&O claim, practically every agency procedure from thank-you notes to meetings can have an impact on your E&O status. Grace Bauer reviews these areas of E&O vulnerability.
THANK-YOU CARDS
Make sure that your agency sends a personalized thank-you note or letter to every insured for new and renewal business, referrals, and to underwriters. In these days of voice-mail, e-mail, and automated answering systems, don’t forget to provide that personal touch. Let your agency be recognized, and make sure that you send a personal note of thanks to the insured, individuals who might have helped you get an account, or even the underwriter for a special favor.
SUSPENSE
Check those suspenses. Don’t leave it up to the account manager or customer service representative to make sure that their suspenses are up-to-date. Believe me — they aren’t. Delegate a manager to review suspenses weekly. Protect your agency from an unexpected E&O landmine that might be lurking in the suspense list.
E-MAIL
We all use e-mail. It’s probably the easiest way to contact someone without having to call a million times. Make sure to respond to e-mails as they come in. Even if you know you might not get a reply for a day or two, send an e-mail reply to say that you’re still working on the issue and will get back to them at a certain time. Don’t forget the Outlook Out-Of-Office Assistant, either. Use this feature to tell your e-mail buddies that you’re not in the office or on vacation. Consider forwarding your e-mails to another employee who might be handling your messages while you’re away. E-mail is a great time saver. Remember to use it as much as possible, even inside the agency. Remember that one interruption during the day could be an E&O issue waiting to happen if it comes when an employee might be reviewing a new policy or processing an endorsement. If it’s not an emergency, use e-mail.
ACTIVITIES
Document everything. Although transactions are usually automatic, phone calls, visits, and internal notes are not — so document them all. Also, make sure to code activities by transactions. If a call comes in that pertains to an endorsement, code it as an endorsement, not a phone call-in. If the producer visits the insured about a renewal, code the activity as a renewal. Always make sure to code each activity with the appropriate transaction. When researching prior histories, it will be far easier to find activities related to transactions than just an activity coded as an incoming phone call. Make your job easier and code by transaction only.
EXPIRATION REPORTS
Besides double-checking current month, next month, and then the ahead 90 or 120-day renewals, don’t forget direct bill. Recently, an agency went through an E&O claim due to a missed company direct bill renewal. Because the renewal wasn’t listed on the renewal list from the company, the agency took the claim. Even though most agencies don’t check their direct bill renewals, I would definitely consider doing so. Check your direct bill renewals as well.
ACCOUNT REVIEW
Remember to review small Commercial and Personal Lines, as well as your large Commercial accounts. Because the normal changes letter doesn’t seem to work, get with your people and prepare 10 common change questions for your area of the country, and then send a renewal letter. Protect yourself and the insured.
BACKLOG
Here’s another area that most agencies miss. Implement a backlog procedure (either written reports or backlog bins) at least every other month as a check. Most account managers and customer service representatives will be overwhelmed — to say the least. Make them feel a lot better. Usually when reports are done, they aren’t as bad as people think. I know that reports take time to do, but you’ll benefit by knowing exactly what’s going on and your employees will feel much more in control. Act today.
QUIET TIME
Although some agency principals adamantly oppose quiet time, it does work. If your backlog is getting out of hand, quiet time can offer an effective solution. Make sure that everything’s covered. Forward calls to other employees, have producers meet daily with account managers and CSRs, and use e-mail and voice-mail. There’s always a solution. Make it happen. Give employees quiet time and increase the quality of work and productivity.
CLAIMS
Are you giving your customers TLC? Most agencies are either sending the insured to an 800# to report the claim directly to the company, or just taking information down and sending it to the company to handle everything. Nothing else happens after that. It’s no wonder that more customers these days are saying, “Why be loyal to the agency? Let’s see if we can get a better price!” Give a little more attention to the insured during a claim: Send a follow-up letter and then contact the insured a week later to make sure that everything’s okay, even though you know everything should be fine. Take that extra step and be a step above everyone else. Show the insured that you care and the chances are that they’ll stick with you.
POLICY REVIEW
Make sure that your account managers or customer service representatives have extra time to review policies. Employees are so overwhelmed with their day-to-day activities that they seldom have time just to review policies. Prevent an E&O claim from happening.
SCANNING
More and more agencies are either using scanning or planning to do so within the next few months. If you’re one of those agencies, make sure that all employees are utilizing scanning. Believe it or not, many agencies are still making copies. Why? Who knows? Maybe it’s just a security thing. Make sure that all employees are scanning everything!
PRODUCERS
Document — document — document! Make sure that all producers are documenting everything. Use pads, start scanning notes, or notify the account manager or CSR for input. Make sure that your agency is covered and get those producers to write everything down.
AGENT-OF-RECORD LETTERS
If you haven’t taken a good look at the policy and what was being written before accepting an agent-of-record letter, take a good look. One agency employee told me that she received an agent-of record letter on a policy that wasn’t covered with the company: The company wrote a Mobile Home on an HO3 form. The carrier didn’t write mobile homes and apparently didn’t realize that the risk was a mobile home. Check out those agent-of-record letters, review what was written on the policy and match it exactly with what the customer has. Double-check everything!
MEETINGS
Keep having those meetings. Know what’s going on in your agency. Find out how each employee is doing and check out their desk. Keep them up-to-date on company issues, how the agency is doing, and the marketing plan (if you have one). If agency principals don’t keep up with what’s going on with their employees, their employees keep leaving.
CONCLUSION
Use these guidelines to check your agency — and help protect yourself from those dread words: We have an E&O claim.