E&O Tip – Customer Accountability – A Great E&O Goal!

“Why is it always our fault when a customer has a loss that is not covered? They knew that they didn’t have that coverage”. It seems that in virtually every conversation that I have with agencies, this is one of their bigger frustrations. If you are truly serious about minimizing the potential of your agency facing an E&O claim, achieving a high level of customer accountability is a great goal to strive for.

Documentation is a key part of the equation. A good starting point is a realization that when an E&O claim happens, the E&O carrier will look to secure the actual file in question (paper or electronic) to see what it looks like and what is included. Solid documentation (that is prompt, accurate and professional) will make the E&O carrier’s job much easier.
When customers are asking questions, modifying coverages, etc., obviously these questions (and the answers provided) should be documented in the agency management system but also with documentation back to the customer. The objective is to have documentation that confirms / memorializes the discussion. Such as: “per our conversation of (date), you are declining the personal umbrella proposal we recently provided. If I misunderstood you or this is contrary to your understanding, please contact the agency immediately”.
The goal here is to attempt to address any potential misunderstandings between what the customer told you or thought they told you and what you heard. By simply documenting the conversation in the agency management system does not help to identify a misunderstanding.
If your agency provides a proposal and the customer advises you that they want to “think about it”, it is advisable to send the customer some form of written documentation reflecting the customer’s decision. A document stating “at this time, per your request, the umbrella coverage has not been placed” really does not take that much time to produce yet it can have such a profound impact on an E&O claim if one develops.
The importance of the customers signature. Since the best type of documentation involves something with the insured’s signature on it, holding customers accountable is enhanced when an agency can get the customer’s signature on a document. This is why getting customers to sign applications is so important. A solid best practice is to require that the customer review the application and if everything looks in order, to sign it.
Enhancing the agency proposals can be a great way to hold customers accountable. The insurance proposal is one of those “discoverable” documents that at the time of a claim can play a huge role.
Three great approaches include:
– Offer a variety of limit options.
– Include definitions of key insurance terms. Also consider including claim examples to help “make the point”.
– Include specimen policies / endorsements.
So if your agency is looking to enhance your E&O culture in 2014, enhance the degree of customer accountability. Ironically, you may just find your agency writing more business along the way.



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