A customer calls your agency and asks, “I was looking over mypackage policy and there is mention of an 80 percent co-insuranceclause. What exactly does that mean?” How confident are you thatall of your staff could provide a thorough, accurate description ofthis key clause?

There is a good chance your customer has documented theconversation in his or her files—and the essence of thatconversation could play a vital role if your customer has a lossand suffers a co-insurance penalty. If you misled them or did notexplain the issue fully, the end result of an errors &omissions claim might not be favorable for you.

Scenarios like this occur many times a day in virtually everyinsurance agency. The manner in which your staff handles theseinstances is crucial. When developing an E&O loss preventionprogram in an agency, often the primary focus is on procedures andensuring consistency among the staff. While these are important,education must also be a main component of your loss preventionprogram.

Your agency is your people

Starting with your staff, on-the-job training, along withcoursework, will probably play a central role in achieving thedesired technical knowledge. Since it is fundamental to yourorganization to have competent, highly skilled staff, establishinga budget earmarked strictly for education is tremendously importantand will be beneficial. The various agent associations areextremely active in this regard and offer many seminars, includingsome online that your staff can attend. These cover a wide range oftopics and should be able to meet a specific need.

To ensure a keen focus on education, build into each employee'sannual goals an objective focused on enhancing their technicalcompetence. Determining the appropriate coursework should be acollaborative effort so the staff has “skin in the game.”

A changing landscape

Consider using agency staff meetings to provide education ontechnical issues. Each time you meet with the staff, review atechnical issue. It could be a topic the staff is less thancomfortable with or a question your customers frequentlyask.

Often your staff may be looking for this technical knowledge fora specific class or line of business. The various exposure analysischecklists provide extensive technical and underwriting informationon hundreds of different SIC classes of business. These checklistsenhance the staff's knowledge and are more than just a tool toidentify prospects' or clients' exposures. They will assist greatlyin helping your producers/account executives become “experts” onthe various classes of business and the exposures they present.

While it's been established that strengthening the technicalknowledge of each internal staff member will provide a solidbenefit, many agencies are enhancing this technical knowledge withsales skills to get the maximum benefit. Today, more than everbefore, understanding the prospect, enhancing the relationship andpracticing account development are especially critical to everyagency's bottom line. To achieve these, developing a strong salesculture and sales excellence is imperative.

Kitty Ambers, CPIA, CIC, CISR, executivedirector of AIMS, anational marketing and sales skills training organization based inRichmond, Va., commented that, “Marrying technical proficiency withsolid marketing and sales techniques will certainly produce a muchgreater result than encouraging one without the other. In addition,as more Baby Boomers prepare to retire, and as technology continuesto advance, agencies face a changing landscape. These factorsheighten the need for agencies to develop greater sales and accountmanagement expertise in new producers, as well as existing serviceprofessionals.”

Uncover the issues

Training on your agency software/systems, etc. is extremelyimportant yet often overlooked. Documentation, or lack thereof, isan important determining factor of the direction in which E&Oclaims go. Agency management should be clear in expressing anddocumenting not only the expected use of the system, but also thetimelines for when tasks will be performed. Issues such as thefrequency of reviewing emails and accepted abbreviations should beincluded.

An aspect of staff education which can be enlightening andbeneficial, is discussing with your staff, either individually oras a group, how they view their E&O exposure. This is a greatway to uncover issues of concern within your agency. You shouldalso consider having your staff attend an E&O seminar orwebinar.

Many approaches

Positioning your agency as one that wants its customers tounderstand coverages and insurance-related terms will reap hugebenefits. Obviously, the insurance industry has unique terminology.In addition, probably the last thing you want is to tell a customertheir claim is not covered. It has been written that less than 25percent of women's diamond rings are insured on a floater. Why isthis so? Is it because customers believe they are getting completecoverage by insuring the ring as contents under their homeownerspolicy? Do they know that mysterious disappearance is not covered?When do you think it is best to tell them—before or after theclaim?

When educating your client base, consider using electronic orprinted newsletters, individually disseminated and/or housed ontheir website. An excellent starting point is to ask your staffwhat type of questions they receive from your customers. While thishas E&O benefits, no doubt additional sales will alsodevelop.

Feel confident

Through the solid education of your staff and customers, youwill further solidify your agency's reputation in your community.Thus, the next time a customer calls and asks your staff atechnical question, you can feel confident the information yourstaff provided was accurately communicated via strong communicationskills. This can help mitigate instances of E&O claims againstyour agency.