Understanding the coverage needs of customers and the
coverage afforded by their policies can open the door to organic growth
opportunities while slamming it on potential E&O claims. Within every agency’s customer base lies a
labyrinth of coverage limitations and policy exclusions that can be a roadmap
to increased revenue simply by offering coverage if it is available. Also, understanding that customer needs
change over time and that “renewing as is” is not the path to successfully
growing organically. To take advantage of
opportunities to grow organically agency staff needs to become proficient at
policy analysis along with exposure analysis.
Documenting that coverage is offered, whether accepted or not, will
provide the foundation for the defense of potential E&O claims down the
road. Here are some considerations that can help the agency find
ways to grow organically:
·
Product
Knowledge - The deeper your product knowledge the better prepared you are
to take advantage of opportunities where organic growth exists. Investing in quality, technical coverage
training opportunities pays for itself over time.
·
Review
Customer Policies - I hope this doesn’t sound like a novel idea, but in
reality many agencies don’t take the time to review policies ordered by the
customer. How can you tell if customer
exposures are actually covered without reviewing policies? Word of caution though, don’t get backlogged
on policy delivery because customers need to review their policies as well.
·
Policy
Exclusions = Opportunity - If there is a policy exclusion there may be an
opportunity to sell coverage, whether it be via policy endorsement or a
stand-alone policy. The Big
‘I’ Virtual Risk Consultant, exclusively available to members, includes
great sections on ISO policy endorsements and their uses which can help give
direction.
·
Follow
Your Customers Evolution - People and businesses change over time. It is this change that can lead to organic
growth. Think through the evolution of
the customer insurance life-cycle and the new exposures that are created and
offer coverage accordingly. Surprisingly
enough, your customer may not call you when their exposures change (i.e.: the
landscaper by summer that does snowplowing in winter)!
·
Use A
Coverage Checklist - Whether you’re new producer or seasoned agency owner,
using a coverage
checklist will help make sure you are offering expanded coverage
options. This helps get the most out of
every customer you work with.
·
Let the
Customer Decide - To grow you can’t fall in the trap of only offering the
coverages that the customer thinks they need.
You may not have legal duty to offer additional coverages but if you are
trying to grow it certainly makes sense to.
If the customer doesn’t want to pay for the additional coverages then at
least you’ll have it documented that you offered it when there is an uncovered
claim in the future.
Organic growth opportunities do exist within the agency if
you are willing to work to find them. Hopefully
the above considerations will help position your agency for organic
growth. Taking advantage of these growth
opportunities will elevate the agency’s professionalism in the eyes of
customers and decrease E&O exposure.
David Hulcher is AVP
of Agency E&O Professional Liability Risk Management for the Big “I”
Professional Liability Program. Visit
the E&O Happens website
for valuable agency E&O risk management information and tools.
