I always ask agents I talk to about technology … are your CSRs and producers consistent in the use of activities to document what goes on … and does your agency have a written document retention plan? The answers are pretty scary. Sometimes the answers have started arguments in agencies between staff and management when they don’t like what they hear!
An additional suggestion for avoiding E&O incidents, is to have at least 2 agency professionals review every page of the insurance policies, to check for previously unknown exclusions or restrictions in coverage. In addition, confirm that the agent’s quote is consistent with the policies.
As someone who escaped the agency/broker/carrier side and is now on the “client side”, and working in risk management, one of the things that amazes me is how little many insurance brokers know about their clients.
I review contracts and agreements on a daily basis for insurance requirements, along with reviewing COI’s for adequacy. It always amazes me when I run across a vendor that either has inadequate insurance limits, or is missing a needed coverage altogether. This happens alot with IT/Tech companies that have a need for Cyber Liability/Tech E&O and their broker has either never talked to them about the coverage, or doesn’t realize that their clienht actually has this exposure.
Hey Big Dog,
In response to your post – the problem is that most agents do not know how to sell insurance. They do not use either the risk management or the E&O models.
The E&O model is the most effective model and risk management is actually 2nd string. The only difference between the two methods is that when selling the agent already prices the suggested coverages before offering them to the client/prospect. There is a big difference between a client and prospect, as their is a difference between a suspect and a prospect. Which is a completely different (although relevant topic). Remember dog – people want to buy a BMW but they really must buy insurance.
But getting back to the E&O sales method. The agent should first use the risk management model to show professionalism as well as determine the needs of the prospect. Then the agent closes with the E&O model.
Suggesting coverages that the prospect/client needs. Then having the prospect/client initial each coverage he/she rejects. Then the client/prospect signs the coverage rejection form.
If the client/prospect asks “how much does ___ coverage cost?” the agent already has that information available, as he already pre-quoted everything that applies.
This method provides the agent with an opportunity to protect himself from E&O as well as earn additional commission dollars.
Unfortunately, many agents just try to sell the cheapest insurance in order to get the sale and move on. What a professional agent and a survivor must do in this current economy is to price out all of the scenarios. This includes E&O, Risk Management, and the cheapest, least quality product available in the case the agent prefers to eat peanut butter sandwiches instead of nothing.
I always ask agents I talk to about technology … are your CSRs and producers consistent in the use of activities to document what goes on … and does your agency have a written document retention plan? The answers are pretty scary. Sometimes the answers have started arguments in agencies between staff and management when they don’t like what they hear!
Great article. I’d like to add reference this post on my site at http://www.txinsurancepro.com.
Dave, didn’t I see you at the IIAT? Sorry I didn’t get a chance to speak!
Rusty
An additional suggestion for avoiding E&O incidents, is to have at least 2 agency professionals review every page of the insurance policies, to check for previously unknown exclusions or restrictions in coverage. In addition, confirm that the agent’s quote is consistent with the policies.
As someone who escaped the agency/broker/carrier side and is now on the “client side”, and working in risk management, one of the things that amazes me is how little many insurance brokers know about their clients.
I review contracts and agreements on a daily basis for insurance requirements, along with reviewing COI’s for adequacy. It always amazes me when I run across a vendor that either has inadequate insurance limits, or is missing a needed coverage altogether. This happens alot with IT/Tech companies that have a need for Cyber Liability/Tech E&O and their broker has either never talked to them about the coverage, or doesn’t realize that their clienht actually has this exposure.
Hey Big Dog,
In response to your post – the problem is that most agents do not know how to sell insurance. They do not use either the risk management or the E&O models.
The E&O model is the most effective model and risk management is actually 2nd string. The only difference between the two methods is that when selling the agent already prices the suggested coverages before offering them to the client/prospect. There is a big difference between a client and prospect, as their is a difference between a suspect and a prospect. Which is a completely different (although relevant topic). Remember dog – people want to buy a BMW but they really must buy insurance.
But getting back to the E&O sales method. The agent should first use the risk management model to show professionalism as well as determine the needs of the prospect. Then the agent closes with the E&O model.
Suggesting coverages that the prospect/client needs. Then having the prospect/client initial each coverage he/she rejects. Then the client/prospect signs the coverage rejection form.
If the client/prospect asks “how much does ___ coverage cost?” the agent already has that information available, as he already pre-quoted everything that applies.
This method provides the agent with an opportunity to protect himself from E&O as well as earn additional commission dollars.
Unfortunately, many agents just try to sell the cheapest insurance in order to get the sale and move on. What a professional agent and a survivor must do in this current economy is to price out all of the scenarios. This includes E&O, Risk Management, and the cheapest, least quality product available in the case the agent prefers to eat peanut butter sandwiches instead of nothing.