Evidence laws are pretty standard in most states. There are six requirements for the admissibility of the evidence. In order to give your agency the best chance in winning a judgment, you must comply with the following practices:
The files must be the Primary Source of Information.This only becomes a problem if you have a dual filing system, for example – paper files and electronic files. When maintaining dual files system, both files must be exactly the same. In other words, if a phone conversation is noted in the Paper File, it must also be noted in the activity log of the electronic file. My recommendation is that you maintain one or the other.
Thedata contained in these files must be Input in the Normal Course of Business. This means that CSRs or other agency personnel while performing their agency duties enter data into the files.
The Agency Relies on the Accuracy of the Record. The information contained in the files must be accurate and that agency personnel rely upon that fact. This applies whether or not you are maintaining manual (paper) or electronic files.
The information must be Input By Competent Personnel. The employee must be properly trained to the extent that their job requires. Your agency should set-up a training matrix for each job description to insure that the staff is properly trained.
The agency has written, implemented and enforces Standard Written Procedures. Not only does this provide the agency with E & O defense, it also provides for consistent processing and customer service. I have been told by several E & O carriers that written Workflow Procedures will be required in the future to purchase or renew E & O coverage.
The final requirement is to establish Audit Procedures for Verification of Accuracy. In other words, it is necessary for management to periodically audit each person’s work to determine whether or not the individual is complying with the agency’s procedures.
Only by adhering to the above listed steps can an agency truly provide evidence in court that the agency has and maintains systems to limit and prevent Errors and Omissions losses.
Jack Fries has over 46 years of experience with both companies and insurance agencies. Fries & Fries Consulting is an automation, sales and management consulting firm aimed at improving agency profitability and customer service by implementing "Non-optional" procedures designed to also eliminate exposure to errors and omissions losses. In this capacity he has trained personnel in over 500 agencies.
Jack is an approved Errors and Omissions auditor for all major insurers.
Jack has authored several manuals including: Workflow Procedures Manual, Operations Manual & Employee Handbook, The CSR Manual and The Agency Business Planning Guide.
Fries & Fries Consulting
151 S. Locust Hill Drive
Lexington, KY 40517
Phone: (859) 317-9094
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