E&O Insights: When Do You Want to Educate Your Clients?

Education of your agency’s clients will likely happen at one point or another. Ideally, it will happen proactively through a series of account reviews, newsletters and other learning opportunities. The other option is that it occurs reactively when a customer has a loss, only to be advised that there is no coverage for the particular loss, or there are some policy conditions/limitations the client was unaware of. Which conversation will probably go smoother? The proactive approach, without a doubt.

When examining the root causes of errors and omissions claims, the No. 1 cause of loss has been failure to provide the proper coverage. The customer had a loss that was not covered to their satisfaction and chose to pursue litigation against the agent.

It is not difficult to see that the more you educate your existing customers and prospects, the more insurance you will write. As more of the client’s exposures are properly covered, it is less likely that he or she will suffer an uninsured loss.

Start With Staff

How educated do you want your clients to be? A key aspect of customer education starts with an educated staff.

On-the-job training, along with coursework will play a central role in achieving the desired technical knowledge. Because it is fundamental to your organization to have competent, highly skilled staff, establish a budget strictly for education. Build into each employee’s annual goals an objective focused on enhancing technical competence. Determining appropriate coursework should be a collaborative effort so the staff has “skin in the game.”

Staff Meetings

Agency staff meetings provide a great opportunity to educate the staff on a host of issues. Each meeting should include discussion on a technical issue. It could be a topic the staff is less than comfortable with or a question your customers frequently ask. Exposure analysis checklists are also valuable in providing extensive technical and underwriting information on hundreds of SIC classes of business. These checklists enhance the staff’s knowledge and are more than just a tool to identify prospects’ or clients’ exposures. They will assist in helping your producers/account executives become “experts” on the classes of business and the exposures they present.

Uncover the Issues

How confident are you that you know the exposures of each of your customers?

It would be great to sit down with each of your customers for a face-to-face account review. This will enable you to ask all of the key questions and provide them with further insight on key coverage issues. Unfortunately, this face-to-face meeting may not be possible with many of your customers, unless you have Saturday hours. One option to consider is to develop or use one of the personal lines questionnaires found in some exposure analysis checklists. The goal would be to send out this questionnaire annually to each customer, in paper form or electronically, requesting that the customer reviews it and responds.

For example, say the question is “Are you aware of the coverage limitations for jewelry in your homeowners policy?” This hopefully would prompt the customer to call the agency to find out what the limitations are and what coverage can address the shortfalls.

Other Approaches

Newsletters, which can be paper or electronic, address the issues unique to the time of year. These could be weather-related or involve issues such as the insurance implications of kids going off to college. There are a range of topics that would educate the customer and including claim examples can show how various types of insurance respond to losses.

Social media postings are a great method to educate customers.

Strengthen your insurance proposals by including definitions of key insurance terms. This is another time to include claim examples on issues such as co-insurance.

Use your agency management system to identify potential gaps. Most agency management systems will allow for programming filters such as “how many accounts does your agency have where you write the auto and homeowners, but no umbrella?” Use this information to then target those customers for umbrellas.

Through the education of your staff and customers, your agency’s reputation will be solidified in your community, and you may have just reduced your E&O exposure.

Topics Training Development Professional Liability