A lot of insurance agents are helping enrich plaintiffs' attorneys by maintaining poor record retention guidelines and catastrophe planning procedures. The E&O exposures related to these issues are significant and growing, although many agency owners simply ignore that they exist. These two risks are far removed from the excitement of sales, so some owners are bored by them–just like they're bored by good IT management, which is another important key, as we'll find out below. This willful ignorance can carry a steep price.

Record retention
Good record retention loss control is all about consistency. Unfortunately, more than 90 percent of agencies I visit are consistent in the wrong direction–consistently mistaken or lax about their record retention policies. Two of the most common errors are using different policies for paper and electronic records, and keeping records for the wrong length of time.
Most often, agents keep paper records for a defined period, such as three, five or seven years. Meanwhile, electronic records are kept “forever.” Record retention policies must consistently address all records regardless of media, whether paper or electronic.

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