AGENCY AUTOMATION: FRIEND OR FOE — PART 6
by Curt Pearsall
In this last of this six-part series focusing on automation, Curt Pearsall examines the issues involved in protecting yourself in a real-time world, covering topics such as storing paper electronically, the admissibility of electronic documents, and how to document a file with electronic communication.
As you can imagine, automation levels within agencies differ significantly. If this article doesn’t address your agency’s level of automation, or if you have a question, feel free to write me at [email protected] and I’ll respond directly.
Also, when dealing with the latest in automation, finding E&O claims pertaining to this level of automation is very difficult, if not impossible — this is new ground, and claims in this area don’t exist with much frequency. Yet. However, if I cover this topic again in five years, I’m sure that some claims will have surfaced and some aspects of automation will be tested in our court system. An appropriate overriding approach is to think the issue through and make an educated, informed decision. Until some of these automation issues are tested, err on the conservative side.
If your agency works in essentially a paper file environment, it’s advisable to print out any electronic communication/e-mails, etc. and put them in the file. After you send the message, print it out with any supporting documentation. The benefit of this is that anyone who picks up the paper file will be able to see the communication trail. If you have the ability to store the correspondence in an electronic file folder, this would provide a back-up to the paper file if that file is damaged. Also, even deleting an e-mail does not mean that it’s completely gone! Computer experts will be able to go in and retrieve e-mails that you thought were deleted. Advising your staff on the proper use of e-mail is appropriate.
Because electronic communication goes both ways, as you define your protocol for outbound communication, don’t forget about incoming communication. As with voice-mail or fax, you need to establish guidelines that let your customers know that they cannot bind, modify, or delete coverage without talking live, either on the phone or in person, to an agency representative.
How admissible are these e-documents in a court of law? That varies from state to state but it’s probably fair to say that the general rule of thumb is based on presumed delivery. When you send a letter, you presume that it made it to its intended destination. The same holds true for electronic communications. However, you need to be on the lookout for any return message that indicates your message was not delivered due to some error, such as an incorrect e-mail address.
In regard to storing paper electronically, there are some issues that you need to be aware of. Some states require that while you may scan a document and store it electronically, you also need to maintain the original in paper format. Check with your insurance department or state agent association for the expectations in your state.
There needs to be a well thought-out plan on storing paper electronically. What type of file structure do you have? Who has access to all the various correspondence? Do your carrier contracts address this issue?
One caveat that applies to any level of automation involves backing up your data, preferably off site. Have your files copied to tape, disc, CD, etc. on a regular basis. Many experts recommend doing this every night. Although this might seem like overkill, how would you feel if you lost your data due to one of the thousands of computer viruses that are prevalent? These viruses have the ability to wipe your hard drive clean or damage it significantly.
The bottom line: Electronic communication is the latest method of dealing with companies, customers, and vendors. It can have a tremendous marketing benefit in keeping your customers informed and giving them the opportunity to communicate with you any time that it’s convenient for them. However, when communicating electronically, be certain that everyone in your agency knows the rules and expectations. This will ensure consistency among your staff. Think and talk through the issues to be certain that you’re making well-informed decisions and that you’re in compliance with regulations regarding electronic document handling.
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, e-mail [email protected]. This article originally appeared in the Utica National Insurance Co. E&O Bulletin and is reproduced with permission.