Author: Lezlee Liljenberg
Life after being a real estate broker and an insurance agent after 38 years transitioned into becoming an insurance and real estate consultant and expert witness, it is a fascinating, interesting and extremely intense occupation.
It has been five years since I jumped headfirst into this line of work. As I learn more about our business from a legal standpoint, I must be honest, it scares the hell out of me to witness how exposed agents are to lawsuits. And thinking back, how little training we received to protect ourselves.
These revelations made me want to share some tips. These tips are something we all have heard a hundred times. They are not groundbreaking or earth shattering but by not following them it could be life altering.
Before I go into the tips let me convey to you the main reason for my concern.
It’s astounding when talking with agents how naive so many of us remain even though we read and hear about adverse situations every day.
Frequent Comments from Agents
Some of the comments I hear follow.
“Well, I didn’t do anything wrong so there is no worry of my agency having any fear of being sued.”
Wrong! You can have all your ducks in a row and still an insured or your carrier may accuse you of wrongdoing. Being able to have the necessary documentation easily accessible is paramount. If you face litigation, you will not want or need the additional stress of finding pertinent information to defend yourself.
“The company has all the information in the system that shows how we handle issues, so we are fine. They will provide it on my behalf.”
Double Wrong! If the day comes (hopefully it never does) that you need backup files and conversations from the carrier, count yourself lucky if you can access those needed files.
Do not take this statement as negative. It is merely an unpleasant fact and if these comments ring true for you then I highly recommend you keep reading and rethink your stance.
TIP #1: Processes and procedures (P&P)
Have processes and procedures in writing.
What are the steps you guided your employees to take during every encounter with a customer?
When did you and how did you present these P&Ps to your employees? Monthly staff meeting? Annual retreat? Document it! Your agency’s training efforts, too, may appear as exhibits at your first E&O claim.
Ask yourself all these questions and more. Then sit down and type or dictate how you want each interaction to play out.
This does not have to be fancy or arduous, but you need your producers, staff, and marketers to have a playbook. Include the most mundane tasks such as how to answer the phone, but also include the crucial elements like follow up expectations to file creation.
Change and reintroduce these processes and procedures, as necessary. The landscape of business and societal expected behavior constantly evolves. It is your responsibility as an owner to shift and adjust appropriately. Make these steps simple but detailed. I find a bullet point; step-by-step approach works best.
Keep in mind these are not “suggestions” for your employees to think about abiding by when they feel like it. They are mandatory. No need to lead with an iron fist, but you need to paint a clear picture of how you want them to conduct themselves. Remind them that if you get into a pickle, they will likely be in the same jar with you.
If your agency does not have a procedures manual, Big I members can access a free Procedures Manual Template download at this agency procedure manual link. Just put in your Big “I” login and download. Be sure to customize it for your own agency procedures because it can be an exhibit if litigation ensues on an E&O claim.
TIP #2: Document, document, document
Whether it is taking chicken soup and crackers to an ailing customer or creating a presentation for a $50K premium opportunity with an investor, this information needs to be in your management system. Many people “think” they have a great memory, and they do. However, the employee that has been with you for 20 years will retire some day and with them goes their brain trust. When asked to recall details, they will more than likely be struck with CRS. It is an all too underestimated syndrome.
By documenting conversations, uploading files, reports, and proposals, we are creating a communication bridge between us and the client (and at times the companies we represent). By asking consistent questions of the policyholder during interactions you will create a sense of trust and integrity. In time this should eventually build and set the stage of honesty on both sides of the equation. Of course, not everyone will appreciate this behavior. However, by not doing this, you leave an inevitable risk exposure for you and your agency. Reputational risk can take years to repair.
Realizing we are in the digital world is understandable. Many people do not keep any paper files. That is way too old-fashioned, you say! Yet, there are many of us unable to give up hard-copy documentation and in fact by touching it we are more productive. And if the digital format is ever lost or inaccessible, I lean back on the old way — paper.
I am in the 21st Century but there is something about holding paper whether it is a work file, a book, or a magazine that makes me more productive. However, if you are digital, please be sure you are making files and placing the pertinent information into that file. Do not just leave the data all over different platforms that will take hours if not days to retrieve.
Are You Saving These Files Somewhere?
Five, 10, 15 years from now can you find, download (upload), and print a conversation with a customer that can prove what you or your producer/staff did all those years ago? Can you find that policy form you may need for an environmental or other claim filed against that insured ten years after the policy expiration?
When I was in the trenches as a captive agent, the technology department wiped out massive amounts of agency files with extremely valuable interactions and data. In that moment I was so glad I was old-fashioned and double downed with a hybrid model of paper and digital. Determine a way to save the information you preserved while following TIP #1. Be assured most carriers are more than likely not going to have the necessary documentation ready at hand to defend you if sued. (Just a note: The Big “I” and their E&O carriers recommend against keeping duplicate files. Duplicate files open the doors to too many questions in litigation.)
And if you leave and move on to greener pastures, finding backup to prove you were an agent of integrity, provided an appropriate standard of care and followed best practices will prove difficult unless you have done your due diligence and retained this information. In hindsight, I left too much behind by being brainwashed into believing I had no right to my past business dealings. Obviously, it is not appropriate to steal trade secrets or customers but protecting ourselves is essential.
Bonus tip: Create an Agency Procedures Manual
This has been a hot topic that I have stressed for years and yet I am still amazed at how many people share they do not have an agency procedures manual.
If you are one of these people, all I can say is like Nike “Just Do It.” It is part of processes and procedures from TIP#1. It is necessary for your business owner toolbox.
Again, we have all heard this a million times but the question I pose is: “Are you following these rules of engagement in your business?”
My point of view: You should be.
Until next time, happy selling!
Originally Published: October 18, 2024
Lezlee Liljenberg, entered the insurance business in 2004 as she started her first agency from ground zero, growing the business to over $6 million in revenue in less than 12 years.
Ms. Liljenberg holds a BA in Journalism/Public Relations and a MA in Political Science/Public Administration from the University of Texas at Arlington. She is a Professional Financial Representative holding licenses as 6 & 63 Securities, a Property & Casualty Agent, Life & Health Expert, and Texas Real Estate Broker.
She is well-known in the insurance and real estate industries for her responsiveness, knowledge, and professionalism in handling situations in both of these industries. Her 32 years of contractual knowledge is extensive and is strengthened by her years as a Commodity Electricity trader during Deregulation in 2001.
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