AGENCY OPERATIONS
ALTERNATIVE ACCOUNT SERVICE PROVIDERS AND YOUR AGENCY ' S E & O written by Dave Hulcher , KAIA
Does using service resources like AI , Virtual Assistants ( VAs ), or a carrier service center increase or reduce the agencies E & O exposure ? What are some of the E & O considerations that agents should keep in mind when utilizing these solutions ? Risk management considerations can assist agencies in reducing E & O exposures from carrier service center relationships .
• Understand the options : This may be stating the obvious , but the first step in considering these alternatives is to understand the services that will be provided and the specific interaction they will have with customers . Some solutions may offer to service all business , while others may limit it to personal or commercial lines , accounts of a certain size , or specific tasks . Another consideration is the quality of the support , including service skills , insurance knowledge , and ease of use / adoption for any tech .
• Review the service agreement : Take the time to read and understand the service agreement . Pay particular attention to the indemnity provisions . The agency should not be held responsible for errors made by the service provider . Don ’ t be afraid to negotiate the indemnity provisions of the contract to protect the agency . It doesn ’ t hurt to ask .
• Transition of accounts : Be cautious during the transition of customers that will be served by the providers . Agency procedures should be modified to reflect changes in the role of agency staff and this should be clearly communicated to all employees . In addition , customers need to be made aware of changes that directly impact their needs , including who to contact in specific situations such as claims reporting , coverage changes and payment of premium .
One important consideration is who will be answering coverage questions from the customer . If it is the service provider ( which we do not necessarily recommend ), is it properly licensed , and is it documenting the coverage discussions with the customer in the event that an E & O claim is made for misrepresenting coverage ?
• Out of sight , out of mind : The insurance needs of customers change over time and agents can ’ t fall into the habit of renewing accounts as is . How will the agency coordinate with the service provider to offer additional coverage options or increased limits ? AI , VAs , and service centers can relieve the agency of routine servicing contacts so that the agency has time to proactively reach out to the customer to learn of any changes in his situation and values , and needs for changed coverages or limits .
28 KANSAS INSURANCE AGENT & BROKER