Assurex E&O Plus | How Are You Providing Clients With Their Policies?
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How Are You Providing Clients With Their Policies?

04 Apr How Are You Providing Clients With Their Policies?

Posted at 09:06h in Pearsall’s Perspective – E&O Plus Tip of the Week by

As agencies seek efficiency and cost savings, they look at different approaches to providing clients with their policies. For this discussion, the primary focus will be commercial policies.

First, an editorial comment on policy delivery: I remember years back when I would walk by a producer’s office, it was common to see stacks of policies on the floor waiting to be delivered. This could be due to trying to meet with the client to deliver the policies personally. It could also result from waiting for that one last policy to arrive from the carrier with the producer’s goal of delivering all of the policies simultaneously. Very honestly, I don’t see those stacks of policies with the same degree of frequency. Hopefully, this is the result of the agency sending the policies as received and thus not waiting for that straggler. It is suggested that the agency’s policy should be to send the policies when received and checked (or at least when the bulk of the policies are received).

Policy delivery can come in various approaches. It appears carriers are sending more policies directly to the customer with a copy to the agency. The carrier approach can involve a paper delivery or via email if the carrier has this information. Using technology has become more common due to the high cost of using U.S. Mail. If the carriers send the policies to the agency to handle, the agency now has a few options. Some of those options include:

  • Personal delivery by the producer: The key is to do this promptly. One reason behind a prompt delivery involves the “Duty to Read” legal principle. Essentially, the client is responsible for reviewing/reading their policy. Obviously, with this approach, if there is a mistake (such as a location or vehicle left off or a wrong limit on a certain coverage), the client bears some responsibility for identifying the error with the premise that they should notify the agency if they did notice the error. Not a slam dunk in the agency’s defense (in the event of a problem), but it does help.

 

  • Mailing the policy: This is less common due to the cost of postage, but it still does occur. A couple of variations to this include:
    • Scanning the policies and then sending an email with the policies as an attachment: Using this approach, sending the email encrypted is probably best since it contains some sensitive information, including PII / PHI info.
    • Scanning the policies onto a flash drive and then sending the flash drive to the client: This was a new approach that I recently discovered an agency using. While this may seem reasonable, a couple of downsides or issues need to be considered. One issue involves the cost of a flash drive for every client. Presuming the agency is not waiting for that straggler policy, this process could involve multiple flash drives (for every year). The other issue I have serious concerns about is what would happen if the flash drive never got to its intended address. Could the flash drive and its contents (since it could contain sensitive information) cause harm to the client as well as the agency for using this approach? Is the flash drive password protected?

 

  • One approach with some traction but less than I would have thought involves using client portals (such as Passport) to provide the client with their policy information. This method is a secure way of providing the client with their policy information using technology.

 

Does your agency have specific ways to provide the clients with their policies? It’s something to seriously consider.