Onboarding new hires brings with it added E&O exposure as agencies work to educate, train, and license new employees. In this rush to ramp up productivity, it is possible to unintentionally create E&O exposure that can emerge in the future. Agents should pay attention to how onboarding new employees can contribute to long-term E&O risk and take precautions to avoid this.
Read on to learn more about this E&O exposure from onboarding new employees and six ways to help reduce it.
Common Onboarding Mistakes That Can Cause E&O Exposure
E&O claims often arise from instances where policyholders feel agents failed to advise them properly, placed coverage incorrectly, missed a deadline, or failed to disclose material information. These errors can often be traced back to inconsistent onboarding or a lack of thorough training.
Here are some common ways onboarding mistakes can unintentionally create future E&O exposure for an agency:
- Inconsistent training from different trainers or for different roles. Without a consistent, documented training process, employees may have very different experiences leading to varying levels of preparedness.
- Licensing doesn’t always equal readiness. Licensing exams are often about definitions, general knowledge, and ethics, which are important but do not teach employees agency policies or about documentation.
- A lack of education about E&O awareness in onboarding. As many new hires are unaware of what could cause an E&O loss, they may not know how to avoid them. E&O prevention and awareness must be built into training.
- Not including ongoing check-ins after the initial training. Employees will have additional questions after the initial onboarding. Check-ins at 30, 60, and 90 days help ensure employees ask questions and fill knowledge gaps discovered during the initial employment period.
How to Reduce Accidental Onboarding E&O Exposure
Here are six ways to reduce the accidental E&O exposure that can result from onboarding new hires:
Build a standardized, consistent training program. Create a structured onboarding plan and use it with every new hire. The plan should include checklists, documentation, walkthroughs of systems, onboarding videos, and discussions.
Incorporate E&O awareness early and often in training. Add real-world E&O examples into training to illustrate why policies and procedures are important. Explain what went wrong in the example and how it could have been avoided.
Limit policyholder-facing work for new hires. New employees need time to practice internally before handling critical policyholder interactions. Build in ways for new hires to gain practical experience in safe ways without risking client relationships or E&O exposure.
Review all early work of new hires closely. Set up quality control and audits for a new hire’s first 60-90 days by having a manager or compliance specialist review quotes, emails, and documents before they are finalized by the new hire. This coaching in the first few months of employment can pay off by helping to reduce future E&O losses.
Document training procedures and keep records. Thorough documentation helps to protect the agency and employee by showing the agency is proactive about avoiding E&O losses and educating new hires.
Create an agency culture where questions are expected. Make it safe for new hires and all employees to ask questions. Building an agency culture of shared accountability and curiosity can help reduce mistakes and engage employees.
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External Links:
- https://www.forbes.com/sites/tomtaulli/2018/06/09/how-to-create-an-effective-company-training-program/
- https://hbr.org/2022/09/why-your-team-members-need-daily-check-ins
- https://www.innovativehumancapital.com/article/beyond-blame-fostering-an-accountability-culture-through-shared-leadership#google_vignette
