4 Steps to Reduce Your E&O Exposure
If your insurance agency could dream, its nightmares might look like explorations of potential E&O exposure. It's terrifying for many agencies to think of an error that would lead to a court case. As an insurance agency, how can you make sure that you don't need to use your E&O insurance by reducing your E&O exposure?
1. Examine Your Processes
Take time every quarter, every six months, or even every year to examine the processes that you use at your insurance agency. Are they working for you, your clients, and the integrity and security of your data? How could they be improved?
Look at tools that could help you improve your customer and data management by going to exhibits and conferences.
Network with others in your field to learn what they do when they're looking at security processes.
Learn from security experts, such as those in the field of cybersecurity.
Examine your processes for documentation, and document everything you can.
Seek out areas where you can automate processes so that you never forget a step. According to Policy Works, you should "create standardized workflows at your brokerage."
2. Note Your Failures
Where have you failed recently? If this is not something that you track but rather something that your agency tries to sweep under the rug, celebrate the discovery of failure instead. Decide that your agency's culture is focused on finding failures, improving, and getting better, rather than hiding your failures.
For example, if you realize that client information is often left open on the computer screen when people go on their breaks, you know that this exposes that information to potential theft. If a client comments on this and makes you feel uncomfortable, don't get defensive and deny that it's a problem: thank them and improve upon your process.
Consider bringing in a consultant to do an external review of your agency. This will help you identify problems that might not be visible to your employees.
3. Train Your Employees
Once you have a process, make sure that you train your employees in that process rather than leaving them with a binder or thinking that they'll pick up the processes from other staff. Written information is key to developing practices that keep you running a high quality, secure insurance agency, but it's not the only answer. You also need to discuss these practices with new employees so they can ask questions and you can ensure that they actually understand.
Develop your expertise in your specific areas of insurance. According to the Insurance Journal, one key for insurance agencies trying to reduce exposure is that they "...stopped writing policies outside (their) expertise and increased education for (their) staff."
4. Have Feedback Loops
Make sure that the lines of communication stay open at your insurance agency. For instance, if an employee has questions even after training, that person should feel welcome to ask those questions without shame. In addition, employees should have a comfortable process in place that allows for communicating issues, questions, or concerns. That way, you are constantly making little improvements to your agency and avoiding E&O problems.