11 Oct Be Sure to Bring Closure to Open Quotes
In the life of an independent agent, there is typically significant quote activity on personal lines, commercial lines, and employee benefits. A solid E&O best practice promoted for many years involves getting the customer/prospect to sign off on those coverages not wanted. This practice is certainly easier if the agency personnel (producer/CSR) are physically meeting with the customer. But in today’s world, there are probably more situations where the quote is provided, and the customer wants to “think about it.”
There have been many E&O claims where the customer/prospect has a loss and then alleges they believed the coverage was ordered. The key is to bring some closure to all open quotes. Say your agency provides the customer with a package quote and a quote for Umbrella, Auto, and EPL coverages. The customer subsequently requests the package, umbrella, and auto but wants to consider the EPL proposal further. First off, document this decision in the agency management system. It is key to memorialize it in written form to the customer, confirming that the EPL coverage has not been placed.
Some agencies have included in their proposal that the coverage offering is only valid for “x” number of days and then presume that if the coverage was not requested, the offering is “officially dead.” This practice may sound like a viable plan, but if a loss occurs, the customer could potentially allege that they were under the impression that they had requested the coverage. I don’t like the “x number of days” approach.
It is best to have a written document that states: “the EPL coverage has not been ordered. If this is contrary to your understanding, please advise the agency as soon as possible”.
I remember when Super Storm Sandy hit, and E&O claims developed where flood coverage had been placed but allegedly on the wrong locations/properties. Thus, there may be situations where providing exact detail on locations insured/not insured is necessary.
Bottom line, as your agency provides quotes, be sure to have a diary/follow-up to bring an “official closure” to those quotes. Without this closure, these “open” quotes could cause potential E&O issues where it will be your word against the customer’s. Those scenarios are tough to predict.