It's true, we spend a lot of webinar time and magazine ink repeating what we hope is a familiar refrain: Do not carelessly take on a higher duty to your customers than exists under your jurisdiction, most notably via website promises and marketing puffery. Why? A court may conclude, in one fell swoop, that you've both taken on a higher duty to your customer and failed to carry that burden to a successful conclusion.

From that message, some have drawn the inference that what we're saying is, “Be an order taker. Just sit at your desk and wait for an order to come in." On the contrary. There is a lot of territory between making impossible promises on a website, such as “the best coverage at the best price," and sitting on your hands. The middle ground is where you need to operate.

Broadly speaking, avoid substituting yourself for your customer in the decision-making process. In most cases, subjective judgments about coverages and limits require knowledge of the risk that surpasses your limited familiarity with the subject. That knowledge resides with your customer.

Who is more likely to know the value of a commercial building? The number of hours worked, residence address and working address of a customer's employees? The ultimate use of a company's products and the risks entailed in their use? Does the customer have assets that will be exposed to a judgment in excess of primary limits? Which individuals will be using the insured vehicles? How much have homes in the vicinity appreciated in recent years?

Even in a so-called order-taker jurisdiction, you can and should regularly ask questions that will bring changes to light in the risk since you originally wrote or last renewed the policy. The Big “I" offers some terrific sample checklists.

To the extent that your question exposes uncertainty, such as the current cost to replace a commercial building, be prepared to offer suggestions as to how your customer can find that information. Maybe they need to work with a third-party appraiser or contractor to arrive at a realistic valuation.

The answers to these questions should prompt you to ask more questions. Do you want to add the new warehouse to your policy? Do you want a quote for non-owned auto? You're insured for actual cash value now, but do you want a replacement cost quote? Do you want an umbrella quote? Coverage for the new driver? The new garage? The new addition? The new employees? The new roofing process? The new construction site?

This upselling is likely to generate one of three responses. The first is a straightforward, “Yes, please." You follow up promptly with a quote. If they opt to purchase, that's a win-win for your customer and your agency.

The second likely response is a request for more information. Your response should make it easier for the customer to arrive at their own thoughtful conclusion. If the line between educating and advocating is unclear to you, it certainly will be to your customer and their attorney. Take the time to offer sound, objective information that illuminates the decision your customer is facing.

The final possibility is “No." Every agency has a customer who reacts angrily to attempts to offer more coverages and higher limits, accusing you of just trying to “get in my pocket!" At Westport, we've seen this movie before—many times. Of all your customers, this one is the most likely to throw you under the bus if an underinsured or uninsured loss occurs because they trusted you to provide “full coverage."

Several benefits flow from upselling this truculent customer. First, if a subsequent claim arises from the absence of a particular coverage or limit, you can document that you both offered it and your client rejected it. Also, you may be eligible for a waiver of the deductible under your Westport or FSIC policy—up to $25,000—in connection with that claim.

But even if a claim does not arise from that particular coverage or limit, you will have shattered one of the most compelling arguments any errors & omissions plaintiff can make: “I trusted you. I purchased every coverage and limit you offered to me!" Except for this one. And this one. And this one … Just remember: Documenting your offer and the client's rejection is essential to making your defense work.

Offering a new coverage or limit is not the same as recommending, much less choosing it. That choice belongs to your customer. But you do have a decision to make when it comes to upselling. The choice is yours. Win-win or lose-lose?

Matthew Davis is a vice president and claims manager with Swiss Re Corporate Solutions and works out of the Kansas City office. Insurance products underwritten by Westport Insurance Corporation, Kansas City, Missouri, a member of Swiss Re Corporate Solutions.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re") and/or its subsidiaries and/or management and/or shareholders.

This article originally ran in the January 2022 issue of Independent Agent magazine.