07 Jul 5 Very Dangerous Words
What are these dangerous words? “Just duplicate what I have.” I probably should add, “but save me some money” to the end of that – because essentially this is what the client is telling you. They are also telling you that the proper coverage is not high on their list.
Unfortunately, these words are spoken more than we would like. The client is focused primarily on price. One key issue that is important for all producers and agency sales staff to recognize is that if you write the account based on price, you will eventually lose the account based on price.
From an E&O perspective, what’s the main issue? Let’s look at the following scenario:
A client (can be a personal or commercial client) has their property insured for $500,000. They have had this limit for some time, even though they put an addition on their property within the last year. Thus, the property is probably grossly underinsured. The client comes to your agency and wants to place their insurance with you with the caveat of “just duplicate what I have.” You determine that you can likely save them some premium based on keeping the coverages the same. New business has been tough to come by for you, so you agree to honor the client’s wishes. The client suffers a property loss only to find out that the amount of the insurance settlement is going to be less than what they thought since the property was not insured to value. The client is not happy with the settlement and blames you, as their agency, for not properly insuring their property. When you bring up the issue of duplicating what the client had, the client pushes back arguing that you should have told them they were not properly insured. Bottom line, you likely lose the argument and the E&O matter.
Just duplicate what I have often translates into duplicating the mistakes of the prior agent. The prior agent did not do a very prudent job in ensuring that their clients were properly insured, but this account is now your account. Your account – your problem.
In many respects, the proper way to deal with this issue is like you are taking an account over via a broker of record letter. There should be a diligent attempt made to perform a comprehensive review of the exposures faced by this perspective client. Ideally, an exposure analysis review should be completed to determine the current exposures.
It would be appropriate to simply advise the client how your agency approaches this type of situation and that your goal and desire is to secure the necessary information to provide the client with a proposal to consider. Virtually every E&O Plus agency I work with has clearly defined what type of client they are looking to not only attract, but to also retain. Without question, your agency desires clients that value your expertise and your ability to help them better understand the coverage they have and the coverage they do not have. “Just duplicate what I have” certainly does not offer that opportunity. There will be times where it is necessary to tell a prospect that they might be better off staying with their current agency or that you are clearly not the right agency for them. Hopefully, you can convert some of these prospects to your agency’s way of thinking, but there are times where it is best to simply part ways.
“Just duplicate what I have” certainly heightens the possibility of a client being part of the next E&O claim facing your agency. If the client is not willing to provide the necessary information and just wants you to duplicate their current coverage, then this prospective client is probably not a client you want.