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The Rough Notes Company Inc.



April 27
08:25 2021

Customer Service Focus



Surprise! E&O did not go away

Writing this, I cannot help but reflect on the amount of change agencies have had to deal with since first hearing about COVID-19. Initially, we had to face the hard reality of offices closing their doors and employees being required to “stay at home.” While some agencies had already created a detailed strategy for handling a pandemic in their catastrophe plan, others may not have thought beyond having employees occasionally work from home. A lot of decisions had to be made in a short timeframe, and since agencies had no other choice, they made it work.

Through all the upheaval and challenge there continued to be this one constant: The work still needs to get done. People still need insurance protection. Policies need to be sold. Customers need service on their existing policies. The phones keep ringing and the emails keep coming in. Even the authorities recognized this fact early on by designating insurance agencies as “essential” businesses.

Agents should document any conversations with the customer related to coverage or rating changes at renewal and include the customer’s responses to any options offered.

With everything that agencies have had on their plates, it is not surprising that possible errors and omissions (E&O) liability might be the last thing on their minds. One thought might be to wait until everyone is back in the office to worry about E&O. This could be a mistake. Agencies have never been more vulnerable than they are right now.

E&O carriers have noted that most post-COVID litigation so far has been directed at carriers. But when plaintiffs are unsuccessful at finding coverage in the policy, they may look to the agent for recourse. They may want to hold the agent responsible for selling them that particular policy rather than one that may have provided coverage. It may be a very long time before we see all the E&O repercussions from service activities that take place today.

There are two major areas where COVID-19 has clearly increased E&O exposure for agencies:

  • Handling renewals
  • Working from home

Handling renewals

Let’s look at what has changed with the renewal process—specifically on the commercial side. Desperate commercial customers had hoped that insurance would provide some financial relief for situations that affected their operations. For the most part, claims submitted for business income, event cancellation or contamination were not covered.

In an effort to clarify coverage and eliminate gray areas in the future, many carriers have endorsed policies or revised policy language to exclude pandemic-related claims. This has placed an additional burden on agents, who need to be alert when reviewing renewals. Even if the coverage limited or excluded is difficult to obtain or cost prohibitive in another market, the insured should still be made aware of any coverage reductions so that informed decisions about available options can be made.

When performing renewal reviews, other areas may also require attention. The premium basis on a policy for payroll or sales may need to be adjusted. Some customers may be involved with new products or services that grew from COVID-19. Others may have remote employees located out of state, which was not a consideration in the past.

Agents should document any conversations with the customer related to coverage or rating changes at renewal and include the customer’s responses to any options offered. Of course, written documentation, such as an email, is preferred whenever possible.

Working from home

Employees working from home is not new. Many agencies have been successfully utilizing remote workers and increasing dependency on a remote workforce over the last two decades. Some agencies had created flexible schedules by allowing employees to work from home a certain number of days each week. Other agencies may have had a handful of employees who worked remotely full time. And some agencies have utilized outsourcing companies to provide servicing assistance remotely.

What changed with COVID-19 is that almost every agency was faced with moving their entire workforce off site. At first, many may have considered this a temporary inconvenience—continually looking forward to getting everyone back into the office and returning to normal. But as each month passed, it became increasingly apparent that this was not a short-term problem and “normal” was still very far from reach. Now, over a year later, many agencies have abandoned their vision of the “old normal” and are beginning to embrace the “new normal,” whatever that may be.

There are several reasons for this. First, many employees have enjoyed working from home. Some have discovered greater work/life balance due to shorter commute times or flexible work schedules. Agency owners and managers have found that, thanks to technology, employees can be as productive working remotely as when working in the office environment.

As this new model settled in, some may have been amazed to discover the adaptability of employees, demonstrating initiative and professionalism as they embraced the changes in their work environment. Some agencies have even started to rethink physical office space needs to accommodate smaller on-site staffing or flexible shared space, thereby reducing overhead costs.

So, what does all of that have to do with E&O? The challenge is work consistency. In a physical office space, employees are more likely to interact throughout the workday. They may overhear others speaking on the phone, or they may lean back in their chair to ask a co-worker a quick question. These casual interactions are less likely to occur when each employee is working remotely in their own space. Think of the new employee who joined the agency during the last year. Even though technology can help to a certain degree, it is more difficult for new employees to be trained or to shadow others as they learn the different aspects of their job.

Standards and solutions

What helps is having well-documented standards and procedures. Standards uphold management’s expectations when performing tasks. Written procedures assure that tasks are performed in a consistent manner. As remote workforces continue to grow, it is more important than ever that agencies maintain their standard of care. This not only assures the highest level of service for the agency’s customers, but also reduces the chance of errors or oversights.

If an agency has no written procedures, or if written procedures are badly out of date, now is the time to address this need. Employees could work on assigned workflows in teams of five or less, depending on the agency size. This can be accomplished with any video conferencing platform that allows screen sharing while the team works through each workflow, obtaining input and agreement for each step and standard.

Managers should be involved to assure that agency values are met. Limit meetings to one or two hours once or twice a week so that the project does not interfere with other work. Be sure to include strong requirements for documentation, which can be the saving grace in the event of E&O litigation. Firming up agency procedures can help assure that everyone understands what is expected, whether working in the office or remotely.

Once written procedures are in place and/or updated, everyone should be required to follow them consistently. When relying on a remote workforce, it is more important than ever to monitor employees’ work to assure agency standards continue to be met. That includes checking documentation for clarity and content.

The insurance industry has always been subject to change. The fallout from COVID-19 will continue well into the future, long after agencies determine what the “new normal” will look like. This is not the time for agencies to drop their guard. Continue to educate employees and monitor work to assure that agency standards are upheld.

Through this, remember that E&O is here to stay, even in the “new normal.”

The author

Mary LaPorte, CPCU, CIC, LIC, CPIA, AINS is a consultant specializing in agency operations and E&O loss control. With over 40 years of insurance industry experience, she helps agencies develop procedures, internal E&O loss control programs and create efficiency and consistency in workflows. She is owner of LaPorte Consulting, LLC, ( and acts as secretary for AAIMCo, the American Association of Insurance Management Consultants (

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