Let’s Get Rid of those Knowledge Gaps in Insurance

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 When underwriters are presented with half-baked information regarding the identity of the Named Insured, nearly all of them will just roll along with it and not ask any questions.  They will issue the policy exactly as the application indicates.  Depending on their policy wording, this could literally result in no coverage because the “Named Insured” doesn’t qualify for any definition of Who is an Insured.  How embarrassing would that be?

I assume that if underwriters and agents understood the intricacies of organizational forms, dbas, and corporate relationships, they would want to place and issue policies correctly.  But the underwriter who shared Example #2 with me has a more cynical outlook.

Roll back to the PLUS D&O Symposium a couple of weeks ago —

I was on that most hallowed of all insurance ground (in a bar) discussing some policy language subtleties with an underwriter, and he commented that his company was currently embroiled in an unexpected claim because a policy issuer had typed up the Named Insured exactly as it was shown on the application, not as it was quoted, and didn’t recognize that red flags were being raised by what was on the application.  The quote was for Acme Corp., and the application showed the Named Insured as “Acme Corp. and related entities.” (emphasis added)

So, in spite of the fact that the “related entities” had not been identified, scheduled, underwritten or rated for, they ended up on the policy.  Sure enough, one of those related entities had a claim, and the carrier is on it. 

I floated the idea of basic business law training to the underwriter as a concept that would establish a baseline of knowledge for staff, even from the policy and endorsement issuers’ level. 

First, he said that would be way too expensive.  I’m thinking — not really.  Something like three to six one-hour sessions in-house would do the trick.  And that would be a lot less expensive company-wide than this claim alone!  If the employer doesn’t have the in-house expertise, heck, they could call me, and I’d put on webinars for a small but reasonable fee.  They could even subscribe to refresher archives at a low monthly rate.

His second objection was that I was placing too much confidence in the staff by assuming that they would be capable of learning these concepts, or even motivated to do so.

Okay.  That shut me up.  On the outside, anyway. 

What kind of industry are we in when a somewhat senior person in a well-known carrier has that attitude toward training, the importance of building blocks of knowledge, and that little faith in the people in his company and in the industry?  Who does he think is going to be running the joint in 10 or 20 years?  And shouldn’t he be identifying at least a handful of them that he feels are worth mentoring? 

Does he think no one wants to learn?  Does he have a way different definition of doing ones job right than I do?  Does he think it’s okay to have staff that understands their work only from a transactional and superficial level with no knowledge of the “why” behind any given action or process?  Does he not want them to grow into their work to where they can exercise some judgment?  Does he think the staff will just take the information and run?  (Maybe that is a distinct possibility, but in large part employers have only themselves to blame for that kind of culture.  It doesn’t take much to cultivate loyalty in ones workforce.  That would be a whole other series of posts.)

I am beyond disappointed to hear this attitude, but there you have it.  This gentleman is probably not unique, which is a sad commentary.  Other than that, the play was fine. <sigh>

I am now adding to my list of Things to Do to Change the Insurance Industry the development of a baseline of business law knowledge, and instruction on same, including how it applies to everyday professional liability insurance situations, and a way to deliver that content to anyone and everyone in the industry who wants it.  Because you know what?  If underwriters and agents can’t depend upon their employers or existing training courses to give them what they need to do their jobs right, then by golly they can depend on me to do it.   It’s the least I can do.

I’ve got a few other things I need to publish first, but this will be pretty high up on the list.  I may even make some online videos about it – on-demand and affordable — in case the learner prefers videos to text.  Gotta love technology.

If business law concepts that should  be included in such a course of learning occur to you, let me know, and I’ll do my best to incorporate them.

And if you think of some other area that needs a similar treatment, please feel free to share your thoughts.  When I see a common or persistent thread, I’ll create a solution.

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