Audit Your Agency – Here's Why

Why is it vital for you to audit your agency regularly? Auditing will help you identify errors in your files and help ensure your staff is adhering to agency policies and procedures while maintaining a high level of documentation quality.

• This can help to reduce agency’s exposure to E&O claims while improving efficiency and customer satisfaction.
• You can identify areas where employees may lack understanding and provide them with additional training.
• It demonstrates to the staff that they will be held accountable if they are not adhering to agency expectations. Employees not meeting the agency’s expectations increase the potential for an E&O issue to arise.

Who should conduct the audits? This will largely depend on the size of the agency and quantity of files to be reviewed. However, individuals should have sufficient experience with the material they will review and have been provided with training on the audit process.

How many files should be reviewed? This will vary depending on the work performed and the frequency of the audits. A benchmark of 10% is a place to start – but you must consider what makes the most sense for your agency. For newer or less experienced staff, a higher number of files should be reviewed. This will help identify areas where additional training may be needed. However, even experienced staff members can make errors, so include them in the process.

How often should files be reviewed? Perform audits monthly, if possible, to quickly identify any emerging issues or need for additional training.

What areas of the agency should be audited? Because your agency likely consists of numerous disciplines – such as marketing, customer service, sales, accounting, etc. – ensure that each of these areas is reviewed. Each has procedures that, if disregarded or not performed properly, could cause problems for the agency.

Analyze the results for individual employees and for the agency once the audits have been completed. Do specific areas/individuals stand out? Do your policies and procedures need modifications for clarity? Is additional training necessary? Advise employees who performed well and thank them for their efforts and commitment. For those that are not performing well, meet with them to better understand the reasons and help them improve.

There are two ways to find out if your staff isn't meeting the job expectations: perform audits or wait for an E&O claim to develop. While performing audits takes commitment and time, it is more cost effective than the alternative.

8 Steps to Take When Auditing Your Agency

1. Determine the workflow or process to be evaluated.
2. Identify the steps in the workflow or process as it is intended (make it fit your organization).
   1. Match to your policy, or
   2. Match to information expected to be gathered on new accounts, or
   3. Non-compliance with an established process
3. Determine the review period. You may choose to begin by reviewing 30 files or 10% of total volume for an initial sampling. For best results, perform the workflow review regularly.
4. Identify if there are any reports that can be run within your agency management system that can assist with your auditing process.
5. Have a staff member who’s removed from the process evaluate the steps in the process. Click here for a sample audit template.
6. Analyze results. Identify gaps in which the actual practice did not meet the intended workflow.
7. Provide real-time feedback to employees on their performance and any gaps in expected performance identified in the audit.
8. Develop an action plan to improve any areas of non-compliance.

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E&O Tip: Claim Example – The Importance of Documentation

The agent obtained a signed application from the client for property coverage. The agent advised that the client indicated they had a sprinkler system in place. After a loss, it was discovered that they did not have a proper sprinkler system in place. The client claimed they had not indicated there was a sprinkler system. While the agent had obtained a signed application, they were unable to produce it. The agent had scanned the app to file in their image system and then shredded the original. It was discovered that there was a scan error that prevented the document from filing properly. Since this document was not available, the E&O carrier paid $180,000 to resolve this claim.

Lesson: When filing documents, check to ensure that they are scanned and filed correctly in your imaging system.

Learn more about documentation in our The Good, Bad, and In-Between of Documentation flyer.

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Sign up for our online Customer Care Center so you can:

• Review billing and make payments
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• Access our risk management site
• Get contact information and read our FAQs

CLICK HERE for details on our risk management resources and how to sign up to access Customer Care.

Ready to Help

Are you looking for risk management guidance on a particular topic? Reach out to Tabitha DeGirolano of our E&O team for help at tabitha.degirolano@uticanational.com.

This information and any attachments or links are provided solely as an insurance risk management tool. They are derived from information believed to be accurate. Utica Mutual Insurance Company and the other member insurance companies of the Utica National Insurance Group (“Utica National”) are not providing legal advice or any other professional services. Utica National shall have no liability to any person or entity with respect to any loss or damages alleged to have been caused, directly or indirectly, by the use of the information provided. You are encouraged to consult an attorney or other professional for advice on these issues.