15 Jun Are You Taking Notes on the Proposal?
When producers review a proposal with a prospect or client, they will typically take notes as the discussion evolves and decisions are made. The notes may include requests for additional information, the coverages that are accepted or rejected, etc.
It is probably fair to say that these notes may not be written in complete sentences. Instead, they are probably shorthand or bulleted information that makes sense to the producer at the time of the discussion.
Fast forward six months, and let’s presume there is a question on what was meant by something in the notes. How confident will the producer be in interpreting notes on a conversation that occurred six months ago? Unfortunately, this happens with some degree of frequency. When the issue turns into an E&O claim, how these issues get resolved can significantly impact the direction an E&O claim takes.
Here is an actual situation I’ve seen:
The proposal indicates a variety of other coverages for the client to consider. The producer is reviewing those coverages to determine whether the client would like a quote or policy on any available coverages. For nine of the 10 coverages notes, the intent is clear. However, on the coverage note regarding employment practices liability, neither the “yes” box nor the “no” box was checked. There was simply a notation of $300,000. What did this $300,000 mean? Well, that is where things took on different interpretations. The resolution was critical because the client had suffered a claim involving this coverage and feels they requested coverage in the amount of $300,000.
The producer’s version was that the client had employment practices coverage already with a limit of $300,000. The client’s version of the discussion was that he asked the producer to get them a policy with a $300,000 limit. For a variety of reasons, the agent prevailed in this matter. Will they be as lucky next time?
The key issue for producers to understand is that they may have to explain what is meant by virtually every handwritten note made on the proposal form at any point in time. There is a good chance that it will be an attorney asking them these questions. So, if you are making notes on the proposal form, make sure the notes are clear. The “best practices” option to consider is to have a document (email/letter, revised proposal, etc.) sent to the client that memorializes the discussion the agency producer had with the client. This will go a long way toward addressing any potential misunderstandings.