What is the best way to reduce your exposure to EPL suits and DOL investigations? Employ fewer people. I received an email newsletter from a national law firm summarizing the new employment laws in each state. These laws are going to make employment so fair that, especially with Chat AI, employers will simply find alternatives to employees. That will take time. What can you do now? Employ fewer people. Employing fewer people means fewer exposures to suits and investigations a

I began working with some of my long-term clients, agencies with whom I've been working with for decades, when I was hired to conduct voluntary E&O audits. The proactive leadership exhibited by these agency owners to take definitive steps to protect their agencies and to make them better is the foundation of these long and wonderful relationships. Many, probably most, agency owners look at the cost of an E&O audit and decide they will take their chances. It is hard to believe

"The thing to be known grows with the knowing." Nan Shepard, "The Living Mountain" Ms. Shepard wrote this now famous mountaineering book in the mid 1940's, though it was not published until the mid-1970's. It takes place in the Cairngorm mountains of Scotland. The quote above succinctly summarizes knowledge, any kind of knowledge, but is specific to people who are conscientious enough to continue to learn purposely. Learning purposely causes a person to realize how much more

I watched a documentary about the late writers Jimmy Breslin and Pete Hamill. I was too young and too distant (my local papers did not often carry their columns) to read their work in their heydays. However, when I later read some of their writings, even when I completely disagreed with their perspectives, I admired their work, especially Jimmy Breslin's writing. I appreciated how he enjoyed fighting for regular people and what was right. I often disagreed with what he though

The property insurance situation in some coastal states is in a crisis. With another big hail season and/or fire season, much of the South and Intermountain West may see the property market freeze. For those in more northern climates, the property market is comparatively much better. Many of these problems are self-inflicted and the solutions can be provided by the industry. The self-inflicted part is that the industry has made too much insurance look easy, and appearances in

I recently read the Opinion of an Idaho Supreme Court case that reversed a lower court ruling which favored the Defendant, an insurance company. The issue involved UM/UIM coverage. The situation, as I interpreted their ruling, was pretty simple. The Plaintiff carried minimum UM/UIM limits of $25,000. They were hit and injured by another driver who carried minimum liability limits of $25,000. The at-fault party's insurance company paid $25,000. The Plaintiff then turned to the

I was talking to an agency client (and quite a few clients have told me the same story, this was just the most recent) who had failed to gain a good-sized commercial account. He was frustrated because the insured went with an agent who offered a price that was 50% less than his price. He asked for a review of his competitor's proposal. The prospect was kind enough to give him the proposal. He went through it and after choking back his vomit because of how much necessary cover

Everyone has likely heard the saying, "Damned if you do and damned if you don't." Insurance agents who try to do the right thing (not the sloppy, incompetent agents who are only interested in making a sale, even if it is the wrong sale) are so often caught between these rocks and hard places. They try to advise their client they truly need additional coverage and lose the sale because that is not what the client wanted to hear and some other agent offered them a lower price w

I was talking to a friend with extensive insurance industry experience ranging from underwriting to actuarial to system design, and he asked this question. "Are insurance rates legitimate?" Subsequently, I was talking to a carrier executive who expressed his frustration with a competitor who lost billions (yes -- literally billions) over the last ten years because his company insisted on pricing that at least makes a modicum of profit, but as a result lost business to another

The future of insurance distribution is becoming extremely clear to me. A huge push is underway to generate as much in sales as possible, with literally zero regard for insureds' actual coverage needs. I am seeing this push with specific carriers within and outside of the independent agency channel. I can easily see this within the Insurtech distribution models, and it is absolutely crystal clear some agencies are planning to grow larger quickly, both with and without Insurte

Do You Believe Your Work Makes the World Better? I read a book review recently regarding a deep study of the workplace environment as it has evolved from hunting and gathering to typing into a computer. The author pointed out that people now have hobbies that used to be considered work as a balance to work that is not necessarily enjoyed. He also noted that people spend so much time working, it is next to impossible to not realize some form of self-identification, who we are,

Do Not Hire a Great Salesperson as Your CEO Let's define success: Success is a strong organic growth rate that exceeds industry inflation by at least two full points (Premiums grow by approximately 3.5% annually, so successful organic growth is at least 5.5% for agencies. For carriers, the 5.5% must be measured on a DWP basis to avoid the reinsurance effects/machinations that effect NWP.), and a profit margin based on operating ratios for carriers no higher than 92% and 20% f

And Why Professional Agents Should Take Advantage of Amateur Agents A recent Wall Street Journal article covered the disappointment, frustration, and resulting lawsuits pertaining to water damage claims that were incurred as a result of the deep freeze and energy debacle in Texas this past winter. The article did not address the latest black-eye reputational damage to the industry and, unfortunately, did not report a single good claim outcome. Interview after interview was co

The Proper And Improper Use Of Deductibles In Designing Insurance Coverages I recently read an article written by Mike Brown on the website "meetbreeze" regarding how little cash a large proportion of people possess. The study showed that 24% of Americans did not have enough savings to cover an emergency expense of $250 and 47% could not cover a $1,000 expense. The data was based on a study of 1,500 Americans. Those numbers correlate with common deductibles in personal insura

"When hiring a management consultant firm, ...clients do not know what they are getting in advance, because they are looking for knowledge that they themselves lack. They cannot measure the results, either, because outside factors, such as quality of execution, influence the outcome of the consultant's recommendations." Clayton Christensen of Harvard Business School as quoted in The Economist. As a consultant, I completely agree with Mr. Christensen's assessment. As a consult

Insurance distributors have worked hard and have been coached hard to appear as professional as possible without actually crossing over to the "professional" standard of care for E&O purposes. I do not believe this approach has served the industry well, though it has allowed pretenders to proliferate and make good money. The pressure to be an amateur agent is greater today than ever before and from a new direction -- cost. You often will see the pressure to be an amateur camo

Predicting a partnership breakup is pretty easy to do. Look at a partnership and identify whether one person is disproportionately responsible for the work/success and/or compensation is disproportionate to value. If balance does not exist in both areas, a significant partnership dispute is just a matter of time. The only questions are when and how volatile. I believe just about every set of partners I have ever met that have been in this situation but were not ready to have

E&O claims are rare because most of the time almost no one has a loss, and if customers don't have losses, it is really difficult for an agency to incur an E&O claim. The math works like this: There are around 330 million people in the U.S. Many people have multiple homes, and often multiple people live in one house. Let's assume three people per home or 110 million homes. There are around 9 million homeowner claims annually. This means somewhere around 8% of homes will incur

Maybe you've been tempted to call yourself a "Risk Manager." A couple of sales consultants have charged agencies tens of thousands of dollars advising them to change their producers' titles to "Risk Managers" and the agents have sucked it up like a problem drinker who hasn't had a drink in the last six months. The agents think no risk exists in changing their title to "Risk Manager," and it is not in the sales consultants' best interest financially to tell them otherwise. Rea

E&O claims will increase because private equity is funding plaintiffs' suits. It is really pretty simple. Many people and attorneys cannot afford to bring suits using only their own financial resources. Additional funding can greatly help them bring suits. More businesses have suffered losses, not necessarily insurance claims, due to the economic shutdown than any time since the Great Depression. A lot of pain exists. A lot of anger exists. If someone gives you a lifeline, yo