Assurex E&O Plus | Are You Practicing?
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Are You Practicing?

03 Dec Are You Practicing?

Posted at 08:30h in Pearsall’s Perspective – E&O Plus Tip of the Week by

At the recent E&O Plus conference, some time was dedicated to what is categorized in the industry as Standard of Care. This concept is extremely important as it can play a key role in impacting the results of any E&O litigation. There is a tremendous amount written on this legal liability concept, but for the sake of this blog, I want to comment on two elements:

  • Watch what you say and what you put in writing. Whether you are an agency producer or internal staff, as you interact with prospects/clients, you must realize that you can be held responsible for the spoken or written word.

 

  • Sell what you know and know what you sell. Misrepresenting the products you are selling will bite you in the “you know where.” Your customers are counting on you for your knowledge and expertise and stating benefits of a product that aren’t true should be avoided.

 

Most agencies probably know these two statements, but interestingly, I am not sure how many agencies do anything about it. Do they know what their producers say when meeting with the client? Are they overstating the value and benefits of various coverages? When one looks at the various E&O claims that develop, one of the more common elements is that producers are a root cause, probably at least 50% of the time. Agencies that are truly serious about minimizing their potential for E&O claims recognize this and have put into practice some great approaches.

Consider one of these for your agency:

  • The use of mock presentations is where the producer has to conduct the presentation in front of a sales manager. One agency I am honored to work with includes its CEO in the presentation. Talk about a commitment from management! The producer is asked various questions during the sales presentation to test their knowledge of the various products and their responses to questions such as “Is this better coverage from what I have?” Imagine you are the producer; this probably sounds like a brutal exercise, but when you stop and think about it, is it better for the producer to struggle in front of agency staff or in front of the prospect? This is a solid sales development approach.

 

  • Periodic classes that the producers are required to attend (note the word required) discuss coverage in finite detail. This is a strong commitment to learning and ensuring producers know what they are selling. The agency may conduct the class or look to bring in one of their carriers with solid knowledge and expertise in the specific coverage. Many agencies have developed a university concept, while others refer to this as an academy.

 

The agencies that are proactive in one of the approaches cited (there are others) are making a strong commitment to their producer staff, which should lead to greater success for those producers. With many agencies looking to identify quality producers, this investment in those producers sounds like a win-win for all parties.