06 Apr Are You Dealing Directly with Your Clients?
Most agency staff would probably say that they deal with their clients directly. After all, that is how agencies do business. While this may be true 99 percent of the time, there may be some situations where this is not the case. For example, consider the following:
- In personal lines, especially for a private client book of business, there is the possibility that the agency is dealing with the client’s financial advisor, attorney, or private family office and not the insured. From my conversations with agencies on this issue, I have learned that they are often required to deal with the third party.
- In commercial lines, I was advised by a handful of E&O Plus agencies that they had some situations where they were also not dealing with the client directly. This was because the business was co-brokered or the agency was advised to deal with the client’s consultant who handles their insurance affairs.
You may be thinking, what’s the issue?
Let’s take the exposure analysis checklist process. In situations when you are dealing directly with the client, you send the form to the client and handle the response if one is received. In situations when you are not dealing directly with the client and you send the form to the client either via letter or email, are you hoping that the client will respond or at least pass the exposure checklist to the third party?
While it would appear that sending the checklist to the client does provide an element of E&O protection, the client may not respond since they don’t handle the insurance matters. How would an E&O matter be resolved if a problem developed? Tough to say. For this reason, the suggestion is for the agency to continue to send the communication to the client but with a “cc” to the third party. This way, you are essentially communicating with the both the client and the third party. If a problem developed, your defense position would definitely be stronger.
In the commercial lines scenario mentioned earlier, the same suggestion should be considered with a few additional twists. When your agency is co-broking an account, a key question is: who is technically the agent of record? If your agency is the agent of record, I would surmise you bear a major part of the responsibility. Some additional thoughts for consideration:
- Send the co-broker / consultant the exposure analysis form with a “cc” to the client. The co-broker / consultant should be advised you are requiring that they interact with the client to get the form completed.
- When dealing with a co-broker / consultant, I would presume that there is some type of a contract or agreement in place. This contract or agreement should incorporate the expected role with consideration (check with your attorney) on including some hold harmless language if a problem arises of the failure of the co-broker / consultant to perform this role.
Bottom line, check with your staff to identify situations when you are not dealing directly with the client and determine how you plan to handle communication issues.