25 Jul What Is the E&O Culture of Your New Hires?
Virtually every agency I am honored to work with is experiencing growth, with most of that growth achieved organically instead of through acquisition. This growth is often accomplished through an aggressive cross-selling initiative within a business segment (PL, CL, EB, etc.) or from one segment to another (for example: selling benefits coverage to existing commercial lines accounts). With this growth (and some staff retirements) comes the need for additional staff.
I typically look to determine the insurance experience level of those new staff. One issue I always want to caution agencies on is not to assume that the new staff, primarily those with insurance experience, have the same E&O culture as your agency. The chances are they don’t, as E&O Plus agencies are generally known for a strong E&O culture. The challenges are even greater for new staff without any insurance experience. More than once over the last couple of years, I have been asked, “What is errors & omissions?” This question is great for new staff from an industry that didn’t have a professional liability exposure. Those staff’s E&O culture and awareness of the key issues is certainly very limited. It would be good for the applicable agency folks (including HR) to ask some E&O-related questions during the interviewing process. Some questions such as:
- Are you familiar with an agency’s Errors & Omissions exposure? What mistakes could an agency make in dealing with prospects and clients?
- Have you ever been to an E&O loss prevention class? What are three takeaways you took from that class?
- What does it mean when someone says, “If it’s not in the file, it didn’t happen?”
- Give me an example of how you handle documentation of a client conversation. The goal is to see if they just document the issue in the file or do they memorialize the conversation back to the client in writing.
- When an agency does an exposure analysis checklist, what are they trying to accomplish? Is doing a checklist every year necessary? What new exposure have you seen develop over the last couple of years? Certainly, ride-sharing and drones are good examples.
- Is it more important to follow the agency procedure as long as you get the job done?
- What have you done to improve your level of insurance knowledge in the last year?
- What are disclaimers on an agency proposal designed to accomplish?
- Name some key differences in dealing with the Surplus Lines marketplace.
- Do you feel that policy checking is really necessary? After all, if there is a problem, isn’t it the carrier’s responsibility?
- Have you ever dealt with an upset client on the phone? How did you handle it?
I do not profess to be an HR person (and do not want to be), but hopefully, asking some of the questions noted would give you an idea of the current E&O culture of that individual. It is probably not reasonable to expect the person to ace this part of the interview as most of these issues can be taught. Hopefully, one will gain some additional perspective on that interview candidate. The key issue – don’t assume the candidate has a strong E&O culture just because they have been in the insurance industry.