If (when) your agency faces E&O litigation, you’ll need to provide admissible evidence to the court. Laws are standard in most states, with six requirements for the admissibility of evidence. To give your agency the best chance of winning an E&O judgment, you need to comply with these practices:
- The files must be the Primary Source of Information. This only becomes a problem if you have a dual filing system, for example paper files and electronic files. When maintaining a dual files system, both files must be identical. In other words, if your staff notes a phone conversation in the paper file, they should also note it in the activity log of the electronic file. My recommendation is that you maintain one or the other.
- The data contained in these files must be Input in the Normal Course of Business. This means that CSRs or other agency personnel should enter data into the files while performing their agency duties.
- The Agency Relies on the Accuracy of the Record. The information in the files must be accurate and agency personnel must rely upon this fact. This applies whether you are maintaining manual (paper) or electronic files.
- The information must be Input By Competent Personnel. Every employee must have proper training to the extent that their job requires. Your agency should set up a training matrix for each job description to ensure that staff is trained properly.
- The agency has written, implemented and enforces Standard Written Procedures. Not only does this provide an E&O defense, it also encourages consistent processing and customer service. Several E&O carriers have told me that they will require written workflow procedures to purchase or renew E & O coverage.
- The final requirement is to establish Audit Procedures for Verification of Accuracy. In other words, management must to audit each person’s work periodically to determine whether o the individual is complying with agency procedures.
By adhering to these steps, you can provide evidence in court that your agency has and maintains systems to limit and prevent Errors and Omissions losses