We have all heard about the business tactic of “niche marketing.”  It is a well-worn phrase, but can actually help you differentiate yourself from your competition, AND help you avoid E&O claims.

When you limit your marketing and personal efforts to focus on a specific type of customer or specialize in a narrow class of insurance you essentially stay within your area of expertise, and are not attempting to be all things to all people. 

Agents and brokers get into trouble when they try too hard to accommodate a customer’s unique risk or are eager to make a buck on every opportunity that crosses their desk.  The reality is that we, as professional agents, simply cannot truly be anything more than “marginal” in the performance of our job when we spread ourselves too thin.  Worse, is when we expect to be able to delegate these peripheral opportunities to our staffs.  How can we expect them to handle them any better than we, the experienced agency owner, can?

Particularly when stepping outside of our areas of expertise, agents and brokers tend to sell primarily three things – rate, limit and deductible, and these are the agents who are likely to have E&O claims.  A website can sell rate, limit and deductible – why would your customer need you?  A professional agent is expected to do much more by their customers and the courts.  Agents and brokers are required by law to be knowledgeable about the effect of every moving part in the policy being sold, how it compares to what the customer has now or the available competitors’ policies and to fully disclose these differences to the customer.  This is the fiduciary duty of care and professionalism required.  Failure to place or provide coverage that was needed and available is the number one cause of E&O claims, particularly when these facts were not disclosed.

“Sticking to your knitting” can be very advantageous to you and your customer.  Being committed to knowing your customer’s needs, the products you sell and the competing policies puts you in the enviable position of being one of THE VERY FEW agents who sell anything more than rate, limit and deductible.  Your customers will notice the difference.  This will translate to more loyal customers, greater profits and fewer E&O claims.

Sheri Pontolillo is CEO of E&O Pros (E&O Professional Risk Management & Insurance Services LLC), a national brokerage in Laguna Hills, CA that sells and administers group and individual E&O programs.  She has specialized in E&O insurance for 23 years, including life insurance and P&C insurance agents, and is the author of numerous industry articles, seminars and continuing education programs.