Documentation: An important risk management tool

How well do you document your agency’s interactions with customers? Consistently documenting discussions with your clients is an important risk management tool in today’s litigious society. It won’t eliminate your risk of an errors and omissions claim or guarantee your success should you face one, but it can reduce your risk and could help to substantially bolster your defense in the event of an E&O claim. Here are some important procedures to consider in your office:

Log incoming calls. You’ll want to record the date, time, the name of who called and who in the office they talked to. Include information about what was discussed and what action you or a staff member took on your customer’s behalf. You can take notes or create a form that can be filled out whenever you or a staff member talk to a customer.

Keep good notes. You’ll want to have a file for each customer and include a log of phone calls they made to you and you made to them. Include any coverage advice you provided. It’s especially important to keep notes whenever a client declines to take your coverage recommendation(s) or declines coverage you suggest. Many E&O insurance claims stem from instances in which a customer declines coverage. If you communicate via e-mail, be careful with what you say in them; it’s a written record. Make sure you archive all e-mails in which you discuss insurance coverage with a customer, initiate coverage or make a requested change to a policy.

Establish procedures. Put in place clearly defined procedures for tasks such as notifying clients their coverage is being cancelled.

Follow up in written form. When a client requests a change in coverage — especially a reduction in coverage — send a follow-up letter about the changes they requested. Make it clear which types of coverage were initiated and which were declined.

Back up your records. Make sure you’re safely storing and backing up all physical and electronic information.

Want to learn more? IA Magazine has a great list of 10 E&O loss prevention tips for new agents. Whether you’re a new agent or have been in the insurance business for years, these suggestions can help you reduce your errors & omissions exposure.