How hybrid work can increase broker E&O risk

Workplace flexibility, one feature of a hybrid workplace, has proven to be a selling point to attract younger brokers. But the hybrid office makes it difficult to supervise newly recruited brokers to make sure they’re doing things correctly, broker E&O experts observed during CU Live presentation on LinkedIn.

“I’d say it’s tougher after COVID not having the experts around you whom you can bounce ideas off of and learn from, if you’re working from home,” said Danish Yusuf, CEO and founder of Zensurance.

“If you’re in the office, you can walk around and ask somebody. On the flip side, if you are the expert sitting on the floor [in the office], you might overhear people talking and be able to give on-the-spot coaching to people, if you don’t think they’ve done a proper job.”

A March 2022 CU online survey of more than 650 P&C industry professionals showed more than 80% of the industry was working three or fewer days in the office at that time.

At the time of the survey, 25% of the P&C industry was working remotely (zero days a week in the office). A total of 57% were working in the office for any combination of three days (21.2%), two days (20.6%), or one day (15.4%) a week.

Hugh Fardy is senior vice president of professional liability (Ontario Region) at Arthur J. Gallagher Canada Limited. He noted the hybrid office, with all of its advantages, is reducing opportunities for the younger recruits to learn from what he calls ‘osmosis learning.’ This is often how knowledge gets transferred from experienced brokers to new recruits, adds Josée Trottier-Turcotte, underwriting specialist and vice president at Victor Canada.

“If you’re a new broker and you don’t have the benefit of listening to your colleagues, bouncing ideas off of them, or just turning to them and asking them for advice on how to handle a certain situation, you know that is an [E&O] exposure,” Trottier-Turcotte said.

“If you’re in the office, around experienced colleagues, you can hear how they’re handling certain situations. That helps to [imagine] putting yourself in the same position and saying, ‘Okay, if I had to deal with this certain client in this manner, then I’ve heard my colleagues speak to them this way.’ You know these are the things you should be focusing on or speaking about.”

Apart from knowledge transfer, in-person supervision also has a risk management, or ‘policing,’ aspect to it. Mistakes can be caught and corrected quickly, compared to someone working from home by themselves and ‘flying blind,’ as the expression goes.

“Clients…are catching mistakes that were made months before, and that [brokerage owners and managers] could not catch without doing a deep dive on every transaction. You cannot police people like that [in a remote-work environment],” Fardy observed.

“In the office, some of that policing takes care of itself. You don’t have that new person who thinks they know how to do it and, instead of waiting for someone to get back to him, goes ahead and does it. And then [the owner or manager] discovers [a problem] six months later, when there’s an accident and the auto policy wasn’t properly written, or the endorsement wasn’t properly done.

“I’m hearing more of those anecdotal examples all the time.”

 

This story is excerpted from one that appeared in the May print edition of Canadian Underwriter. Feature image by iStock.com/whitebalance.oatt