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3 Things You’re Doing Wrong with Insurance Documents

By not handling documents in the best way possible, many insurance agencies waste time, lose documents and even make themselves susceptible to fines for noncompliance. Learn how to avoid the three most common mistakes.
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In the insurance industry, countless forms and documents must be properly filled out, filed and managed. But what if someone told you that you were doing it wrong?

The truth is that many insurance agencies aren’t handling their documents in the best way possible, and, as a result, are wasting time, losing documents and even making themselves susceptible to fines for noncompliance.

Here’s how to upgrade your document management system and avoid the three common mistakes many agencies make:

1) Keeping documents in physical format. If your agency’s insurance documents are on physical paper, you’re setting yourself up for several risks and drawbacks:

  • Wasted time. The manual tasks associated with keeping documents in physical format take a lot of energy—gathering forms, filing them, finding them when they’re needed, printing updated versions and other time-draining activities. That’s time that could be spent working with clients or growing your agency.
  • High costs. Not only do you have to deal with the cost of paper, but you must also pay for everything associated with having those physical documents, which includes filing cabinets, printer toner and ink, storage space and postage and envelopes for sending out paperwork to clients.
  • Security issues. Even if your agency has a strong security system, physical documents are easily compromised. Anyone with access to your filing room can copy, steal or alter documents for any of your clients. This is a serious liability issue.
  • Loss from disasters. If your office has a sudden fire or a burst pipe, you could lose every single document. In a matter of seconds your agency’s entire livelihood can literally go up in smoke.

Electronic storage is a simple and less risky alternative. Technology makes it possible to safely and securely store your clients’ insurance documents in a cloud-based document management system, which eliminates the risks and drawbacks of paper. This form of document storage also gives you the added benefit of being able to access files from remote locations, increasing your agency’s productivity.

2) Using a manual workflow. Every document must be passed from one member of your agency to another until all necessary steps have been completed. Depending on the specific item, the process may be lengthy, which often cause hang-ups, slowdowns and outright errors. If you don’t streamline processes with an electronic workflow, the chances for having such issues increases significantly.

Many of the risks associated with manual workflows are closely related to those associated with storing your documents in physical format. However, some agencies that store their files electronically continue to use cumbersome manual processes and open themselves up to drawbacks:

  • Compliance issues. Manual workflows can often make compliance more difficult. This is because there is less security and more room for error. If you want to avoid compliance issues, avoid manual workflows.
  • Slower workflow. Just like paper will slow you down, so will the manual workflows associated with it. Dropping files on people’s desks is not only less efficient, but it increases your odds of lost or misplaced documents, and it is a serious security risk.
  • Outdated paperwork. Clients may need to provide you with updated paperwork in order to keep their account in proper order. With a manual workflow, your ability to update and distribute the appropriate files is limited.

An electronic workflow solves these issues when used with electronic document management. Use a system that allows you to instantly forward documents and move on to the next step in the process, as well as set reminders for when outdated documents need to be updated. This ensures your clients’ insurance documents are handled securely and efficiently.

3) Sharing files by email. You’re probably thinking, “But if storing and processing documents electronically is the best option, shouldn’t I be sending them electronically too?” Yes, you should—just not by email.

Email is generally considered a safe and efficient way to communicate electronically, and for personal communications, it is. However, if you’re sending documents that contain sensitive client information, like personal information, financial data or health history, email doesn’t provide enough security.

A few of the risks associated with sharing sensitive files over email include:

  • Susceptibility to hackers. Even an amateur hacker can break into most email accounts, and most email messages are not encrypted. It’s easy for cyber thieves to steal information off the documents you share with your clients.
  • Multiple file versions. When a document is undergoing multiple rounds of revisions, you’ll be sending and receiving several variations of the same file. If you happen to get confused or forget to clearly mark the versions, you could end up with an outdated document or accidentally work on the wrong file. The more people involved in the revision process, the more likely someone will slip up.
  • Paperwork bottlenecks. Email inboxes get full and sometimes messages get missed, holding up the entire process. Additionally, you may need to resort to snail mail when you need a final signature, as email typically does not integrate with electronic signature software.

Instead of email, use secure client portals. These programs allow you to electronically collect legal signatures and share documents with clients instantly, but in a way that is encrypted and protected from hackers and other cyber threats.

Making just one of these three errors can impede your agency’s growth and prevent you from reaching your full potential. No agency wants to waste resources, compromise data security and risk compliance-related issues. Electronic document processing systems will help you steer clear of those pitfalls and set you on the path of success.

Jesse Wood is the CEO of eFileCabinet, an advanced document management system that improves the lives of people, small to enterprise-level businesses and their clients. This article was originally published on the eFileCabinet blog.

Tuesday, June 2, 2020
Agency Operations & Best Practices