For the first time in history, five generations work side-by-side in an increasingly complex organizational environment. According to the 2023 Best Practices Study, the weighted average producer age (WAPA) was 49.6 years in 2023, an increase from 48.6 in 2021. The elephant in the room is that many agents are heading for retirement.

No matter your agency's size, finding and retaining agency staff is a strategic imperative. In today's competitive job market, experienced customer service representatives (CSRs) and producers can entertain a number of attractive offers. Often, smaller agencies cannot compete against larger agencies that offer richer benefits, remote work and higher salaries. Additionally, increasing mergers & acquisitions often induce seasoned employees to join the job hunt because tenured employees find the M&A transition process and its aftermath disconcerting.

Principals must focus on recruiting top talent at a price they can afford. Further, with more business going to surplus lines carriers, the need for employees who can provide exemplary customer service while also parsing numerous policy terms and conditions only grows. Agents also face tough competition—from the agent down the street to the direct writer pitching the lowest price on television and social media.

While all agents want to provide the best customer service, something as simple as reminding a direct bill client of a pending cancellation or agreeing to review an insured's contract without stating review parameters can open the door to an errors & omissions claim.

As the challenges of agency management only grow, here are some key areas where you can focus your training and administrative efforts to reduce E&O exposures as the independent agency channel strives to perpetuate:

1) Provide robust onboarding and support. Newer employees may flounder, even if they have experience in the industry. Don't expect all employees to be self-starters, especially in regard to technology. In the multigenerational workplace, employees with fewer technology skills may need a tech-savvy employee to guide them.

Encourage employees to ask questions and provide them with internal mentorship and ongoing training. Also, don't forget to provide special recognition to your employees who mentor. This encouragement and acknowledgement can reinforce their willingness to continue guiding others.

2) Offer access to self-service resources. Questions about certificate issuance are a top concern for today's personnel. The Big “I" Virtual University (VU) website offers many articles and videos on the proper issuance of certificates of insurance, as well as other educational materials. From the use of the word “blanket" to complying with lenders' requests for additional insurance-to-value documentation.

3) Update your agency procedures manual. Ensure all employees follow your guidance. This way, all boats row in the same direction. And when something changes, revise your agency's procedures manual and ensure that all employees understand the new process. You never want to see your procedure manual used as a litigation exhibit if your employee failed to follow that process. The VU offers a sample procedures manual if your agency doesn't have one or it is rudimentary.

4) Don't rely on the carriers. This is especially true for surplus lines brokers. With agency and carrier employee churn and the number of inexperienced employees only growing, your staff must ensure policy accuracy. Check and double-check new policies and renewals to ensure they match what you requested on the application. Review endorsements that may contain new exclusionary language and point out these exclusions to your insured. Also, watch for endorsements with vague titles and clarify with underwriters what those endorsements mean.

5) Keep internal meetings brief, organized and informative. Use an agenda and seek employee input prior to departmental meetings. Use these meetings to update carrier changes or offerings, and drill down on at least one E&O tip. People's attention spans can be limited, and quick bursts of training can be effective. Also, remember to encourage your employees to contribute to meetings or they will eventually shut down.

With many generations working together toward common goals—profitability combined with managing the agency's risk—some key objectives seem clear. However, don't focus solely on developing and managing your A+ performers. Those B-list employees, the ones who are dependable and have a positive attitude, are just as important to your agency's success as your rainmakers.

Focus on talent procurement with an eye toward training. You can no longer assume you'll find seasoned talent. Instead, agency managers should focus their talent searches on individuals with skills such as strong communication, an ability to think critically and a learning mindset. With those skills, management must then invest in their training and mentorship.

Your agency's value ties directly to your employee bench strength. With training, compassion and proper procedures, your agency can outperform your competition and continue to prosper in today's hard market while avoiding an E&O claim. 

Nancy Germond is Big “I" executive director of risk management and education.

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. 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 Big “I" Virtual University offers a variety of tools, including coverage declination forms, training videos, the Ask an Expert service, a sample procedural manual, form letters and more. In partnership with our E&O carrier, Swiss Re, E&O Guardian also offers many more tools for Swiss Re policyholders.