Knowledge by Folklore
Credit must go to Bill Wilson at InsuranceCommentary for this great line, "Knowledge by Folklore." These three words sum up, so perfectly, how coverage knowledge is transferred and how underwriting rules are learned.
The comedies and tragedies that result are protected by confidentiality agreements. Otherwise the Greek comedies/tragedies would have serious challengers for the genre. I am not exaggerating. Some of the stories are so comedic and others ruin lives.
Here are some examples (and zero are fictional):
I do not need to read the form because I learned all about ISO forms at my CE class (the form wasn't an ISO form).
Is XYZ covered under the homeowners form? (The producer did not identify which homeowners form.)
"John" once told me the CGL form provided coverage for XYZ. Does it?
I figured the underwriter would include coverage after the fact if a claim was actually incurred. I heard they sometimes did that.
Do you mean some forms provide that coverage and others do not?
How do I know what coverages are in a policy?
Aren't all auto policies the same? The comparative rater does not tell me about any differences.
Are not all workers' compensation policies and coverages the same regardless of the state?
Is it really important to know which state the employees are working? I was told it did not matter.
The broker told me they would add liquor liability so I told my client they had it. Then the broker decided to not add it and my friend at another brokerage told me that was okay.
You probably get the picture. Many readers are probably insisting that I made these up but I did not. These come from many sources including E&O audits following major E&O claims where the producer was operating by folklore.
I know for a fact in many instances the problem is not just one of laziness and competence. I would argue laziness and incompetence is usually the cause of operating by folklore, but not always. What I have learned over time is some people have specific reading issues.
I am not a doctor but some people have disclosed diagnosed reading issues. They did not share specific diagnoses but I suspect some may have dyslexia. For others the situation may be more complex. For those people, reading policies, understanding what they are reading, understanding the context and how in a real claims situation what those words really mean is a true struggle. Maybe they just dislike reading. Maybe they are just not quite adequately intelligent. Maybe reading long insurance policies just is not something they have the patience or ability to sit still long enough to do.
I can understand this. If this is the case, then as the employer or maybe it is yourself, how do you change the learning environment to overcome these situations and avoid the fallback position of learning by folklore? Changing the learning environment is absolutely the only solution for those that are not lazy but sitting down and reading is not a realistic solution.
The answer varies by person. At my firm, we have developed a process for training on coverages that changes the environment. It works well for many people. It will not work for everyone, especially if they have a diagnosed reading disability because reading forms is absolutely essential to providing the right solutions to your clients. But by changing the environments in which the forms are read can make all the difference for many people.
For the lazy ones, what is the best solution?
Getting rid of lazy employees relative to reading and understanding forms actually helps motivate others to improve their skills so sometimes the new learning environment and elimination of deadweight go hand in hand. If the person who will not learn coverages is a really good producer, then maybe the solution is to create a team approach rather than allowing the producer to learn by folklore. The team approach can be an extremely constructive approach although it likely requires a reduction of producer compensation.
If you are interested in learning more about coverages and forms, I strongly recommend reading Bill Wilson's new book, "When Words Collide." It is a book all serious students of coverages need to read, especially if you want to put your clients' best interests at the forefront of coverage knowledge. If you are also interested in different learning environments and processes for your employees, please contact me.
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.