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Continuous Education Plays Important Role in Reducing E&O Exposures

Reducing E&O exposures is an important goal of every agent and broker. One important way to focus on lowering your risk of an E&O claim is through continuous education. Agents and brokers have to take courses to maintain their license, but some of those education hours can be spent learning more about reducing E&O exposures.

 

Continuous Education Plays Key Role in Reducing E&O Exposures

While it may not be possible to completely remove your exposure to E&O losses, you can reduce your risk by promoting a culture of continuous improvement and ongoing education at your agency. People make mistakes and sometimes miss things, which is why E&O coverage is critical for agents and brokers. But even with having insurance, it makes sense to reduce your risk of an E&O claim.

Since agents and brokers need to take courses annually to maintain their licenses, some of the focus can be on ways to reduce E&O losses. And simply taking courses to learn more about the insurance industry and risk management overall will help agents stay educated — and lower their risk of an E&O claim. Agents and brokers can consider earning industry designations to learn more about risk and insurance.

E&O claims can often result from a lack of communication or a misunderstanding between the policyholder and the agent. For example, a policyholder may believe they have coverage for a loss they suffer but there is an exclusion they do not understand. Or in other cases, a policyholder may decline coverage without understanding the potential ramifications of that decision. It is up to the agent to document these decisions and explain the consequences clearly and concisely.

Focus on these topics during continuous education sessions to help agents and brokers reduce their exposure to E&O losses:

 

  • Communication. Training and continuous education about how to communicate clearly, ways to educate consumers on challenging topics, and ideas for alternatives can be useful for agents and brokers.
  • Professional Standards. Make sure that agents and brokers at your agency understand the professional requirements of their role. They need to know how to work with clients, understand ethics, and meet industry standards — so they must be trained on these issues.
  • Documentation. Agents and brokers should take courses annually about how to document their files, including having signed declinations in place when an insured decides to forego recommended coverage.
  • Contracts. Focus on the details of the contract, including how to avoid missing deadlines or failing to deliver the agreed-upon services. Reading contracts is a skill so educating agents and brokers on what to look out for is a best practice.

 

Other Benefits of Continuing Education

In addition to lowering exposure to E&O risks and meeting licensing requirements, continuing education has other benefits for employees and employers. Employees benefit by learning new skills, gaining confidence in their roles, and preparing for advanced promotions. Employers gain more valuable employees — and in the case of agents, more educated agents mean better service to policyholders.

 

E&O Coverage Offered Through the American Agents Alliance

Having E&O insurance coverage in place to protect your agency is a critical step in reducing E&O exposure. Get your free quote through the American Agents Alliance today and be sure your agency is protected.

 

External Links:

  1.   https://www.insurance.ca.gov/0200-industry/0030-seek-pre-lic/446-9.cfm
  2.   https://www.cpcusociety.org/

3.     https://professional.dce.harvard.edu/blog/why-is-professional-development-imp

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