Why Your Client File Notes Should Not Look Like A Grocery List

May picDocumentation is the most important key to your defense when your E&O carrier has their Claim Department or an assigned law firm handling an E&O claim.

What is your documentation process?  Do you have a routine process?  Are having meaningful file notes something you think you should have but don’t commit to practicing?

It’s very important to train yourself and your staff to routinely document every conversation that you have with your clients and prospects.  If you are not paperless, make a specific form that you use just for this purpose and give it a title; even consider using a different color paper so these notes are easily accessed.  If you are paperless, take the time to update your file notes so that your files tell a detailed story.

Your file notes should start at the beginning of the relationship and explain how you met your client.  You may not always remember what it was that brought your client to you or you to your client – have it written down.  And, so the story begins.

You’ll note the type of insurance you discussed and who was part of that discussion.  Was it one person, a couple, were they led to you because of a suggestion from their CPA?   Did you speak with their CPA or attorney?  Were any children brought into the insurance discussion?

Did your involvement with your client also include telephone conversations?  Many times that is where the connection started. You need to document phone conversations to show the date, time and content.  You might want to avoid texting with clients unless you have a way to maintain a record of the texts and content so that they are merged with your file.

As you compose your notes, the same day you met or spoke with a client or any person related to the sale, make sure they don’t read like a grocery list because should you have an E&O claim years later and have to go back to those notes, you want them to support your actions. If you made more than one product offering to your client to select from, you want a clear path as to why they selected one insurance product over another.

Build your sales story through file notes that incorporate in-person meeting notes, phone conversations, emails and letters that you send to your clients and prospects to reiterate any points that you feel they may not have understood or to clarify what the insurance product will do for them.  Applications don’t tell a story.

If you ever have an E&O claim, you will quickly realize that the time you spent routinely documenting the sales process served you well.  A consistent and well-documented client file could certainly make the difference between having a strong, solid defense against groundless allegations made by a client versus your Errors & Omissions insurer having to pay out a settlement because you were unable to provide a clear path for them to follow when they tried to defend you.

Don’t be thinking, “I pay for E&O Insurance so that I will be defended, my Errors & Omissions Insurance Company can handle that part on their own”.  Rest assured, that your file will probably be the first source of information that the E&O Claim Department will request.  Make sure your notes don’t read like a grocery list!

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