AGENCY AUTOMATION: E&O FRIEND OR FOE? — Part 1: DOWNLOAD
by Curtis Pearsall
Most agency owners and staff would agree that advances in automation have greatly increased our dependence on technology. The benefits of automation are easily identified, with increased efficiency at the top of the list. But has automation increased or decreased E&O exposures in your office? This is a hot topic among our 11,000-plus agent-customers and the answer isn't simple. This series of articles by Curtis Pearsall will help you gauge the impact of automation on your agency's risk exposure.
Overall, most carriers that interface with their agent-customers require you to sign an online Terms of Use agreement, which is similar in nature to paper contracts. As with any contract, whether electronic or paper, agency management and (if need be) legal counsel should review this agreement carefully before signing. A few items in most agreements that you must comply with are:
- Hold-harmless provisions;
- Use of information from the carrier's Web site may not be copied, reproduced, etc., without the permission of the carrier;
- Retention of records in the event of termination of the agreement; and
- Retention of signed documents and by whom.
One of the more common types of agency automation is download (the process in which a company sends data to you electronically). In many respects, download replaces what's fast becoming the antiquated system of mailing paper documents. Although download is more common in Personal Lines, its use with Commercial files, as well as billing and loss information, is rapidly increasing.
A download file is usually sent each night to the agent's mailbox. To ensure that you're dealing with accurate data when communicating with your customers, be sure to accept downloads daily, preferably first thing in the morning. This will go far to eliminate any E&O claims resulting from inaccurate data.
The carrier will usually provide a transaction listing of those items that have been modified, or you can review the download listing in your system. This will make it easier to know which endorsement requests have been handled and which ones you should retain on diary.
It's wise to have one member of your staff assume responsibility for managing the nightly data downloads from carriers. Don't forget to designate a backup person, however, who can take over this responsibility when necessary.
Based on the agency input I receive, accuracy is the major concern associated with downloading data. Think for a moment about the accuracy of the paper documents you receive from carriers. Is it 100%? I doubt it. So, it stands to reason that electronic transmission of data won't be any more accurate. Don't assume that downloaded information is error free! Proofread and review it as carefully as you would a paper copy.
Most companies will assign passwords to agents so that they can access, review, and retrieve data. Make sure you consider the likelihood of security breaches if an employee leaves your agency. Could this person retain access to significant data about your clients? If so, make sure you either change your agency password or notify the carrier that they're no longer an employee and should be removed from the access list. Designating one employee to handle agency/company interface is helpful, since they can assume responsibility for notifying carriers of such situations.
Finally, most carriers will run a test before implementing your download process. This is intended to help you become accustomed to using the system; and taking part in the test process will ensure everything is functioning properly before you begin using downloaded information. Don't wait until you encounter a problem to acquaint yourself with this increasingly popular method of accessing data.
Curtis M. Pearsall , CPCU, AIAF can be reached at Utica National Insurance Group, P.O. Box 530, Utica, NY 13503, (800) 274-1914, fax (315) 734-2807, or e-mail [email protected]. This article originally appeared in the Utica National Insurance Co. E&O Bulletin and is reproduced with permission.