When one thinks of the key pieces of a quality agents E&O prevention program, typically topics such as documentation, exposure analysis checklists, confirmation of client insurance decisions (purchases and rejections) and policy review all come to mind. And they are all very important if an agency truly looks to minimize their E&O claims potential. However, there is one area that could get overlooked or taken for granted. This deals with educating the staff regarding the areas of insurance they handle.
There is no doubt that multiple times every day, your agency clients are asking questions on their insurance program. Questions such as the following:
1) What does co-insurance mean?
2) Mom and Dad are in a nursing home so the house is vacant – what do I need to know?
3) What is the difference between ACV and Replacement Cost?
4) Should I get an umbrella? – I don’t have any real assets
And there are many more with many being much more complicated. Obviously, the manner in which these questions are answered is key as your clients are probably making decisions based on what you advise them. In addition, in virtually all states, agents will be held accountable for what they say and what they put in writing. Thus, if “incorrect” information is provided and a problem develops, your agency may be found liable.
Based on this, clearly education of the agency staff should be at a very high level. There are multiple ways to do this. I know of several agencies that have a training department or at a minimum, staff dedicated to instructing the agency staff on a whole host of important technical insurance issues. For many agencies, this type of approach may not be feasible.
A good place to start is to do an evaluation of each of the staff and what areas they need further training on. Posing this question to staff might actually be a good approach. In addition, agencies should look to their state agents’ association for technical training. There are also designation courses (CIC, CPCU, etc.) that provide some technical information. One area that is often overlooked is insurance periodicals. Personally, I feel that the insurance industry is blessed with some great periodicals that cover technical topics on a monthly basis.
Bottom line, education of agency staff is a key element in a quality E&O loss prevention program. Dedicating the time and resources should ensure that when the staff are asked the various questions that they are able to respond with confidence and accuracy.