Curtis M. Pearsall
by Curtis M. Pearsall, CPCU, AIAF, CPIA, President, Pearsall Associates, Inc. and Special E&O Consultant to the Utica National E&O program
For some strange reason, this is a common question among agency staff. For those staffers who have never experienced an errors-and-omissions claim, possibly it is hard for them to truly and totally comprehend the value of good quality documentation. Hopefully, the agency veterans can emphasize the significant value documentation provides related to the direction E&O claims can take.
An important element
Documentation is one of the most important elements of a quality E&O culture and commitment within an agency. However, for an agency staff member to state that he or she documented the conversation in the file may not be good enough. What does the documentation say? What story does it tell? A number of components are essential for documentation to possess its true value.
The documentation should be performed promptly
This does not mean at the end of the work day or “when I have a minute.” Ideally, it means as soon as the conversation has concluded. For those that can multi-task, documenting the discussion while you are having it is great as it enables you to accurately note the various items/topics being discussed.
The documentation should include details such as with whom you spoke, what was discussed, whether there are any open items and who has what responsibilities and duties moving forward.
The documentation should be professional
This may fall into the “common sense” category, but there is the possibility that the discussion was emotional in some manner. The agency staff should be careful to ensure the documentation does not reflect this emotion. The saying “don’t put anything in the file that you wouldn’t want a jury to read” comes to mind. For example, the following statements recovered from actual files did not help the agency’s defense: “I’m sorry I could not get back to you sooner” and “I’ve been too busy.”
The documentation should tell a story
If the customer calls back and the initial staff member is not available, the staffer helping the customer will be able to read the documentation, know exactly what was discussed and determine what any “next steps” are.
At times, the file should reflect some form of written communication (e-mail, letter, etc.) that memorializes the conversation. When a person documents a conversation, he or she is, in essence, documenting his or her version of it. Is it possible there was a misunderstanding or that the customer didn’t provide the information he or she thought?
This does happen, so documenting the details of the conversation back to the customer is a solid E&O loss prevention tool. The goal is to make the customer accountable for his or her insurance decisions.
Documentation is key
If agencies followed these straightforward concepts, there would be fewer E&O claims and a greater percentage of E&O claims that did develop would be closed for “no pay.” Unfortunately, this does not always occur and, invariably, the most important document in the E&O matter is the one that is not in the file. It involves those declinations/deletions of coverage and explanations or answers to various insurance-related questions.
It is amazing how at the time of an E&O claim, one of the parties (typically the insurance professional) will be adamant that he or she had a conversation with the customer and can almost recite “chapter and verse” details of that conversation. Ironically, the other party (the customer) will have a totally version of that conversation or may actually allege that he or she does not even remember the discussion ever happening. Therefore, is it to be assumed that this will happen and that everyone will have a different story? Perhaps. This in itself shows the value of good quality documentation.
Imagine an E&O claim has occurred and you are asked to produce various documents as is typically the case. As the agency producer/CSR on the file, you produce records of detailed conversations with the customer. Let’s presume that your customer, who will be asked to produce his or her various documents, has nothing. Who do you think will have more credibility in the eyes of the court? Showing a solid track record of providing consistent quality documentation will certainly enhance your credibility.
Now take the opposing perspective. You as the agency staff member comment that you remember explicitly the exact conversations you had with your customer. However, when you are asked to produce details of those conversations, you have nothing. A common phrase used by attorneys in E&O matters is “If it’s not in the file, it didn’t happen.” Your memory of those conversations will not carry the same weight as the necessary detailed documentation.
There have been a significant number of E&O claims where good quality documentation heavily determined the direction of the claim. In fact, many E&O carriers state year after year that they are closing 2 out of every 3 E&O claims for no payment. That is an impressive statistic which speaks to the quality of the defense counsel, the agencies the carrier insures and the agencies’ strong commitment to solid E&O loss prevention.
Unfortunately, there have been a significant number of E&O claims where the lack of quality documentation resulted in the agency being responsible for the damages when it probably should not have been. There were cases where the CSR stated that he or she was “just too busy” to do the proper job of documentation. Imagine being on a jury and hearing that!
Clearly, good quality documentation is the key. As Aristotle once stated, “Excellence is an art won by training and habituation. We are what we repeatedly do. Excellence, then, is not an act but a habit.”
Sounds like a pretty smart man.