30 Nov Are You Learning From Your “E&O’s”?
Virtually every day, E&O Plus agencies make a very concerted effort to minimize the potential to face an E&O claim. They have established procedures and use auditing to assist in evaluating to what degree those procedures are followed. When bringing on new staff, a solid onboarding effort is in place to get the new staff up to speed on all of the various facets of the agency. Training is a very high focus for all staff, higher than it has ever been, and I could go on and on. However, until an E&O claim is made against the agency, they probably do not know how well they will fare. Will the file in question stand up to the allegations of the plaintiff? At the end of the day, will the agency prevail in the E&O matter?
In many of the agencies I am honored to work with as part of “the team,” they have instituted a formal practice to evaluate and analyze E&O matters made against them to determine “the good, bad, and the ugly” (hopefully there is no “ugly”). In fact, in one of my 2021 agency visits, when discussing the agency’s commitment to documentation, a unique experience the agency encountered was explained to me. The agency was involved in an insurance department inquiry and needed to respond to several questions and issues. The agency management reviewed the file in question and provided the insurance department with extensive written correspondence to support the agency position. Shortly after providing the information, the matter was dropped. Bottom line, the agency documentation prevailed. It was interesting to note that the agency used this issue in a staff discussion to let the staff know that “you don’t have to do anything to get sued” (this matter was not a lawsuit). The quality and quantity of the documentation were the keys to the department matter being quickly dropped. A great and powerful teaching moment.
Does your agency have a procedure/practice to evaluate E&O matters/insurance department inquiries to assess “the good, bad, and the ugly”? The above story was a positive one, with the agency prevailing. Unfortunately, that is not always going to be the case. There may be times where the agency did commit an E&O and is determined to be negligent. These are still great learning moments for management and the staff. The analysis may identify an area where the agency was not as diligent as it should be. When discussing this issue with an E&O Plus agency several years ago, I posed the question, “what did you learn from this claim, and how could it have been prevented?” The response was very honest – “we need to do a better job in policy checking.” That was a very astute observation, as a more formal and focused approach to policy checking would have caught the issue, giving the agency the ability to fix it before it became a problem. I am pleased to say that this specific agency is much more focused on policy checking today than it was five years ago. That’s progress. By letting the staff know of the matter, they were able to strengthen their policy checking commitment.
Does your agency have a procedure/practice to evaluate E&O matters/insurance department inquiries to assess “the good, bad, and the ugly”? The above story was a positive one, with the agency prevailing. Unfortunately, that is not always going to be the case. There may be times where the agency did commit an E&O and is determined to be negligent. These are still great learning moments for management and the staff. The analysis may identify an area where the agency was not as diligent as it should be. When discussing this issue with an E&O Plus agency several years ago, I posed the question, “what did you learn from this claim, and how could it have been prevented?” The response was very honest – “we need to do a better job in policy checking.” That was a very astute observation, as a more formal and focused approach to policy checking would have caught the issue, giving the agency the ability to fix it before it became a problem. I am pleased to say that this specific agency is much more focused on policy checking today than it was five years ago. That’s progress. By letting the staff know of the matter, they were able to strengthen their policy checking commitment.
Without a doubt, no agency wants to have an E&O claim made against them as they are not a pleasant experience. But there is a positive element when it does happen. They can be a wake-up call on issues in need of greater focus and attention. So, when your agency gets hit with an E&O matter, look to learn from it. At the end of the day, it will make you a better agency.