You have so much on your plate. Daily you do the noble business practice of protecting assets for your customers and giving them the best possible customer experience. You also volunteer and engage in your community. You do all the things a small business owner does that surround your business, from HR & Staffing matters, to Legal, to Tech, to Marketing, and Accounting, and so much more… This is both an announcement and a reminder to take the time to protect yourselves and in doing so provide even better protection to your customers.
While we are not the end all in providing E&O prevention counseling, together, we run a pretty tight ship and have had a 20+ year record of E&O losses that in some circles would be a proud record with only 1 paid out indemnified E&O loss. But, 1 E&O loss is really 1 too many, isn’t it? Certainly there have been some other situations out there where the loss was within the deductible range, or the carrier helped you out, or a rejection form was later found after being presumed lost… As you are aware Premier provides protection for all your business written through Premier and Premier insurance carriers. We urge you to take stock of the Premier refreshed E&O module in Q3 2020.
You are not employees of Premier, we do not mandate what you do as Independent Contractors outside of your Premier Agreement. But with our Premier Mission fully agent centric and all about being a catalyst to help you to optimize your success, this is another opportunity for you to make sure you are in a good, sound and compliant place in your agency operations. Not only are the consequences costly with deductible amounts, and the time it takes to work through an E&O claim legally, but reputation impact, insurance carrier access restrictions, and adverse regulatory action can result from a single E&O claim and/or unfavorable operational findings.
Consider this; you often engage with clients during their most precious life moments - a wedding, first house or condo bought, business start-up, business expansion, birth of child, new puppy, holiday or birthday gifts, job transfer, new car, trampoline or pool added, home addition or basement finished, young driver newly licensed, college grad heads out on own, larger house, retirement options, perhaps downsizing to smaller house, etc. Each of these moments and so many more can be a change in exposure for your customers where they need your guidance on coverage counseling and protection for their new situation.
One thing is certain – human behavior is at times flawed... Both with customers and with personnel. At the point of sale it is not unusual for a customer to initially be mainly concerned with price and saving money. However, at the time of a claim, it is not unusual for the price to go out the window, when comparing the hypothetical $50/month savings to a $10,000 loss that is not covered. If there are not sufficient agency processes in place to consistently provide licensed coverage counseling, signed apps/coverage options and rejections with retention of those docs, consistent transaction documentation regardless of the medium customer uses, client reminders, and client follow up, then begins the downward spiral of client dissatisfaction and a possible E&O claim.
It Sounds so Simple, the “What to Do” - The 5-STARS Pillars of E&O Prevention:
- Standard of Care – With only Licensed Personnel Providing Options & Consultation on Coverages to Protect Clients’ Needs & Protecting Their Privacy Information
- Transaction Documentation & Client Follow Up (New Business & Existing Business). Includes Standard of Care as well as payments/billing $, and being sure the transaction was processed/closed out, with a Documented Client Emailfor Review & Understanding of their Transaction Request and the changes processed, & to have the client notify you if anything is not correct right away.
- Agency Processes w Sales and Transaction Checklists - and Auditing of the Processes – both Documented.
- Reviews – Annually and Life Changing Check Ins with Clients - that are Documented…
- Signature Document Retention for All Coverage Rejection Forms & Signed Applications where required by State or Carrier, including those Retained by the Carrier
But it’s Not so Simple. It’s in the “How To Do” it and the Processes… Please take the program. There is significant financial benefit in applying the 5 Stars to your agency practices.
To Your 5-STARS E&O Prevention Success!
Rex Hickling, CPCU, AIM
President, Premier Group Insurance, Inc.
Cell: (303) 818-6218
Office: (720) 457-0206
Fax: (866) 275-1213
600 17th St. Suite 1425N
Denver, CO 80202