By Louise Barron, Vice President, Senior Underwriter, Swiss Re Corporate Solutions*
Dad: I'm going to find out anyway, so you might as well tell me the truth.
How many times have we heard that before?
Sometimes agency management and staff can negatively resemble a family's reaction when it comes to admitting they made a mistake or an error.
The stern father slamming the door and yelling in frustration. A worried mother overresponding by coddling the wrongdoer. The sister teasing her sibling for “always messing up." The brother sneaking out of the room quietly because he knows he has made the same error.
The same way it strikes fear into kids, an aggressive response from management can lead to fear. Fear that they may be viewed differently because of the error, the loss of their supervisor's approval and, of course, employment repercussions. An overreaction will create a culture of fear and no one will want to admit a mistake or a concern again.
Overlooking the error of a high-producing agent, for example, will only delay correction until the next mistake. There needs to be consistency from management – from receptionist to lead producer; all deserve respect, understanding and fairness in this situation. Management needs to be willing to look inward to see if there was something they could have done to prevent the mistake. Was the error due to a lack of training?
The best approach is to have an open-door policy. Creating an effective open-door culture can have countless positive outcomes for your agency. This top-down management approach relies on senior leadership to promote open communication and transparency in the agency.
As it relates to your agency's E&O, a forthright and honest employee admitting an error is a requirement. It's necessary to create trust in this area. However, there are so many other benefits.
The agency becomes a workplace that owners and employees are proud to be a part of. Staff will be more productive – there will be good morale. The office will be a safe place to learn and grow by learning from mistakes. This culture increases loyalty in both management and peers.
Below are suggestions to create opportunities for conversations to discuss concerns, mistakes or obstacles that staff encounters.
- New employees should have an introduction to E&O as part of their onboard training. A new employee may not have any knowledge of what an errors & omissions insurance policy is and how it provides financial protection for the agency. They will need to know their part in abiding with this insurance contract.
Note: This is also the first opportunity for management to present their stance regarding the importance and value of the open-door policy to a new employee – a time to communicate that staff can reach out at any time to ask questions, make suggestions and address problems.
- Every agency employee should attend a risk management class sponsored by the agency's E&O carrier. E&O seminars are an excellent way to increase procedural and knowledge-based E&O risk management awareness to agency personnel. After class, regroup and ask if the employee has any questions about what they heard.
- Regularly schedule one-on-one meetings between a supervisor and employees. An employee feels most comfortable admitting an error or raising a concern privately.
- Office décor has an effect on both mood and morale in a workplace. Hang motivational art in the office with positive messages, including learning from mistakes.
- Agencies should have periodic internal audits and file review. It is important to have another set of eyes reviewing files to confirm staff is following procedures.
- Have an external procedures audit; an E&O audit brings an independent eye to reviewing an agency's operations, which can help reduce E&O exposures, improve customer service, increase sales opportunities, establish strong agency procedures and create a culture of E&O risk management awareness with agency staff.
You will know that you have achieved success with the agency's open-door policy when employees frequently come in your office to share successes as well as challenges and, yes, mistakes. Just like a parent responding to their family member admitting an error, a calm and thoughtful response is important as it sets the stage for future situations. When an employee owns up to an error, thank them for their honesty, don't overreact, and be empathetic. Ask what could have been done to prevent the error and make a plan to correct the mistake. And if appropriate, chalk it up to experience, then move forward.
This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group ("Swiss Re") and/or its subsidiaries and/or management and/or shareholders.
*Louise Barron is a Vice President and Senior Underwriter in the US Agents E&O Program of Swiss Re Corporate Solutions. She has been actively involved in protecting the errors and omissions of independent insurance agents for more than 20 years.
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