Knowledge. E&O risk management knowledge can be generally divided into two categories. The first category is coverage knowledge. The second category is procedure knowledge.
Coverage knowledge has always been important and never more so than now. When I came up through the industry, agents could rely on company underwriters to not only assist them in learning coverages, but to also help catch problems on submissions. The good underwriters were partners and backstops. Most companies cannot be relied upon to that degree today which makes personal knowledge and knowledge within the agency itself significantly more important. Such knowledge also creates a fantastic selling competitive advantage. The Insurance Journal’s Insurance Academy is an excellent online source for such knowledge as are FC&S, IRMI, RIMS, and the IIABA’s Virtual University.
Procedural knowledge is also more important today if for no other reason than the industry being more complex increases the importance of procedures. One interesting observation of writing this blog and my regular column in the Insurance Journal is that based on readers’ responses, quite a larger number of people that one might think would know better do not know much about managing agency E&O risks. In particular I am concerned about company people and brokers who clearly are advising agencies daily, and yet who are just dead wrong about proper agency E&O procedures. Suffice it to write some of these company employees and wholesale brokers really need to read some case law and agencies’ E&O policies before offering any more advice.
This is why, personal possession of knowledge is so important for minimizing E&O claims. Then bad advice can be considered without being relied upon. In today’s multimedia global world, more data exists than ever before. So many people think every question can be answered by Google or a quick email. Insurance is complex. A deep background of knowledge will serve you well for a long, long time.