Faculty Response:
I’m quite sure they need a disclaimer about the recording
but in general I feel having the voice documentation saved
is so much better than written documentation if an E&O
claim were to come up with a client.
Faculty Response:
There are several angles to approach the issue of retaining
conversations and voice mails with customers. I believe the
first question is if there is a legal obligation to provide the
customer with notification that the call is being recorded.
I’m not sure if there is a legal requirement but based on
the number of times you hear “this call may be recorded for
quality assurance,” it is certainly a common practice if not a
legal requirement.
The key to preventing E&O claims is follow-through
and doing what you say you are going to do to meet
your customers needs. Sound agency procedures with
appropriate follow-up and verification procedures are key
along with good documentation. Documentation is the most
important item in being able to successfully defend a claim.
With that said, a recording of customer conversations and
voice mails can be a double-edged sword that could help or
hurt an agency’s claim.
If an agency procures the coverage
requested by the customer, offers
additional coverage options,
provides increased limits, etc. and it
is documented via a voice electronic
system then great. But, what if
the agency does not and a claim
occurs and those voice files are
subpoenaed and clearly show that
the customer requested something
that was not delivered? The “he said,
she said” claims will be settled more
definitely and let’s hope the agency
is on the right side. I think retaining
customer conversations could prove
helpful but only as a supplement to
written documentation and follow-
up with the customer.
At this point we do not have any
specific E&O procedures for
implementing a voice recording
system. The next generation
E &O seminar material which
are already thinking about will
explore technology related issues
such as this one so we can better provide risk management
guidance for the way today’s agents do business.
Faculty Response:
I will weigh in based on my general understanding,
without the benefit of special research. It is my general
understanding that there are a number of states where
it is illegal to have a call recorded without prior notice,
permission to record it, and/or a regular signal on the call
to indicate recording. If it is not known where someone is
calling from, when a call is placed or where they are when a
call is received (such as if generated by or made to someone
using a cell phone), there is no way to know what state law
is applicable as the laws of state where the call is made and
where it is received can apply, and may differ. Thus, to avoid
having to sort through and remain current on possibly
changing state laws on this issue, risk failing to comply with
applicable laws, and uncertainty around which state law
applies, it has become common practice for businesses that
record calls to notify callers that a call may be recorded.
Penalties for violating these laws can be quite significant;
I have not researched this for quite a while but recall
that in some states there used to be criminal penalties
for violations. It also is unpredictable if and where any
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