Commercial Insurance Update – Communication Or Lack Thereof

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June 2009

Communication Or Lack Thereof

By Jeffrey W. Cavignac, CPCU, ARM, RPLU, CRIS © 2009 Cavignac & Associates – All Rights Reserved

Communication, or the failure to communicate effectively, is often the reason there are problems or disagreements in both our business and personal lives. It is amazing how two people can leave the same meeting, or end the same conversation with such different perceptions on what was said or agreed upon. Although we spend most of our waking hours communicating in one fashion or another, most of us have not had any formal “Communication” training.

From a business perspective, communications are often unclear from the beginning and critical decisions and discussions are poorly understood and documented. If a misunderstanding or problem arises, each party will try to piece together what they thought was discussed and agreed on in order to make their case. If the disagreement is in the form of a lawsuit often the party with the best documentation will prevail. Despite the importance of effective communication surprisingly very few companies or organizations have formalized “Communication Protocols.”

Lousy contracts and misunderstandings cause confusion. Confusion costs companies money. It takes time, effort and resources to resolve such issues. The impact poor communication can have on your Total Cost of Risk is the reason it is the subject of this newsletter.

A Communications Protocol or Best Practices lays out in writing the minimum standards for communicating and documenting communications within your company. Cavignac & Associates has drafted our own “Communications – Best Practices” document.* Our communications philosophy is pretty straightforward:

– If it is even remotely important, it needs to be documented in our Agency Management System (the system). If it isn’t in writing… it didn’t happen.

– Never put anything in writing you would not want the person you are writing about or anyone else to see. Nothing is confidential and everything is discoverable.

– Before you hit “send,” re-read your e-mail, make sure you “spell check,” and check the recipients.

Although our Communications Best Practices document goes into detail on each aspect of how we communicate, if we just remember these three axioms alone, our ability to communicate effectively and protect our company in the event of a dispute will be enhanced significantly.

An effective “Communications Protocol” will address the following issues.

Oral Communication

The most common form of communication is oral. You can’t document everything you say and you should not document everything you say. If an oral communication (face to face or on the phone) includes any of the following:

– An agreement or commitment

– A notification, or

– A request for action or follow up

Then it should be documented. If appropriate, these would be in writing to the other party or at a minimum a written note to file. Your company may choose to go into a little more detail as far as what should be confirmed with the other party as opposed to a note to file. Regardless, the distinction should be clear. When in doubt, err on the conservative side and confirm it with the other party.

Voice Mail has its own set of challenges. Sometimes a spontaneous comment left on someone’s Voice Mail can have unexpected consequences. Voice Mail lends itself to one-sided documentation and it can be unreliable since usually there is no documentation or record of the actual message. Be sure to confirm it with the other party.

To effectively manage your Voice Mail communications:

– Leave a clear message on your Voice Mail if you are going to be unavailable for longer than half a day. Indicate when you will be back and who the caller can speak to in your absence.

– Pre-plan your Voice Mail messages (all verbal communications should also be pre-planned if possible)

– Use the 3 G’s: Get in, Get done and Get off. Don’t leave exhaustive messages if you can help it.

– Respond promptly to Voice Mail messages you receive, and confirm in writing any points of significance, corrections, or clarifications.

Written Communication

Written communication takes many forms, but one of the most critical from a business perspective is “The Contract.” A Contract is a communication tool which outlines what each party to the contract is supposed to do (Scope of Services) and spells out other terms and conditions which affect the agreement such as timing, indemnity, dispute resolution and payment.

It is important to make certain that the contract accurately reflects each party’s responsibilities at the onset of an agreement. If it doesn’t and there is a dispute, you could spend hundreds of thousands of dollars if not millions to have someone else (i.e. a judge or arbitrator) figure it out for you.

In the course of the business day we are constantly communicating. As mentioned above, if a communication involves any form of agreement, commitment, notification or a request for action or follow up it should be documented in writing and filed where appropriate according to your Communication Protocol. Your Protocol should be clear on where things are to be filed. Consistency is critical, and everyone in your company should file their documentation the same way. This process should be reviewed for Quality Control on a regular basis.

E-mail and Other Written Forms of Communication

Electronic communications are prevalent in our working lives. Managing e-mails alone can drive one nuts, and the sheer numbers of e-mails received and sent presents a huge risk management challenge.

Outgoing e-mails should always:

– Be reviewed for content prior to being sent

– Be spell- and grammar-checked

– Be double-checked to make certain it is being sent to the right people (have you ever hit the “send” button too soon?)

Your company’s Electronic Communications policy should address not only e-mail, but also Extranets, chat rooms, text messaging, Twittering, instant messaging, news groups, bulletin boards and any other electronic media being used.

Electronic correspondence needs to be filed and archived in a consistent manner (outlined in your Protocol) and all information should be backed up and duplicate copies should be kept off site.


Communicating effectively is critical to our success both personally and professionally. The ability to understand the other party’s point of view and convey a clear understanding to them is a skill worth developing. This is the skill set on which Stephen Covey’s Habit #5 is based (The 7 Habits of Highly Effective People):

“Seek First to Understand… Then to Be Understood”

An effective Communications Protocol or Best Practices document can help you improve the quality of communications in your company. It will clarify what needs to be documented and where it should be kept. Ultimately this can reduce your company’s cost of risk, and drive dollars to your company’s bottom line.

* Contact our Director of Human Resources, Sandee Rugg, if you would like a copy of our Communications Protocol. Although this document is specific to our company, it can serve as an example of what such a document might look like. ±

Disclaimer: This article is written from an insurance perspective and is meant to be used for informational purposes only. It is not the intent of this article to provide legal advice, or advice for any specific fact, situation or circumstance. Contact legal counsel for specific advice.


Risk Management Seminars 2009 Series

450 B Tower, 450 B Street, Suite 1800, San Diego, CA 92101-8005

– Sexual Harassment Prevention Training Satisfies AB1825 requirements

Friday, June 19, 2009 — 8:00-10:30 a.m.

– All You Ever Needed to Know about Unemployment, Disability and Family Leave Friday, June 26, 2009 — 8:00-10:30 a.m.

– Cal Trans Flagger Training

Friday, August 21, 2009 — 8:00 a.m.-2:30 p.m.

– Creating an Employee Handbook (to Publish in January)

Friday, August 28, 2009 — 8:00-10:30 a.m.

All training sessions available to our clients Reserve early / seating is limited! *

For more information about upcoming seminars Contact Darcee Nichols at or 619-744-0596


Stay Healthy, Men!

National Men’s Health Week is June 15-21! It is celebrated each year the week leading up to Father’s Day as a reminder to stay informed about preventable health problems and to encourage early detection and treatment of disease among males.

Men need the following exams every year:

– Prostate screening

– Testicular exam

– Skin cancer check

– Eye exam

– Dental exam (twice a year)

– Colorectal exam (if there is a family history of cancer)

Men should ask their doctor for the following tests at a minimum of every two years:

– Body measurement

– Blood pressure

– Fasting blood sugar (age 45 or older)

In addition, a cholesterol screening should be performed at least every 5 years – more frequently if the doctor recommends it – and a hearing test should be given at a minimum of every 10 years.

For more information on men’s health issues and ideas for promoting Men’s Health Week, visit: ±


FYI from the FBI

According to the Federal Bureau of Investigation (FBI), e-scams are in full swing and you should be mindful of any unsolicited e-mail asking for any of your personal information.

Here are the latest scams the FBI is warning about:

– An e-mail claiming to be from former CBP Assistant Commissioner Thomas S. Winkowski states that the CBP (U.S. Customs and Border Protection) has stopped someone carrying a shipment to be delivered to your residence. The package supposedly contains millions of dollars that you are receiving as an inheritance. The e-mail then asks for your personal information in order to deliver the shipment. Delete the e-mail and do not respond. The CBP will never send you an unsolicited e-mail.

– An e-mail claiming to be from The Oprah Winfrey Show notifies you of your nomination for the “Oprah Millionaire Contest.” To participate, you are asked to submit your personal information, and then to purchase airfare and a ticket to attend The Oprah Winfrey Show, and are then promised another seat for the show on a future date. Delete the e-mail and do not respond. If you have any questions regarding e-mails from or about the show, you can visit to verify legitimacy.

Be aware that the details within the e-mails may change slightly as the word gets out. Never give out your personal information, including date of birth, Social Security number, bank account information, passwords, and/or your mother’s maiden name.

If you have received either of the above e-mails or any other suspicious e-mails asking for your information, the FBI encourages you to file a complaint at For up-to-date information on the latest scams, visit ±


The Benefits of Chocolate:

Who Says It’s All Bad?

Think chocolate is the evil monster lurking in the night, ready to tempt you after a fulfilling dinner? Well, this delicious treat is not so bad after all — it’s actually good for your health!

In a recent study, six weeks after participants ate a daily dose of cocoa, their skin was smoother, more hydrated, and less prone to sun damage.

Cocoa Also Benefits the Heart!

The Kuna Indians of Panama drink cocoa made from lightly processed beans on a regular basis, and blood pressure rarely rears its ugly head. The flavonoids in the cocoa bean widen and relax the blood vessels in the heart. They may also activate an enzyme in the body that assists in lowering blood pressure. Cocoa has also been found to improve blood flow, fight bad cholesterol (LDL) and improve cardiovascular health.

Which Type Do You Choose?

Opt for dark unadulterated cacao containing 70% or more cacao. This will give you the healthy dose of antioxidants that you need to have beautiful skin and a healthy heart. Remember, though, if you choose to get your chocolate fix in candy form, do so in moderation. ±


Hot Allergy Tips!

Got Allergies?

Try adjusting your washing machine’s heat setting, according to the American Thoracic Society. By washing laundry in water 140°F or hotter, you can kill all dust mites lingering in your clothing and bed sheets.

Researchers found that the “warm” setting, or 104°F, only killed 6.5% of dust mites. The hotter water temperatures are more effective in eliminating dog dander and pollen, as well.

If you are looking to achieve these results but do not want to raise your utility bill, another efficient option is to wash items at a lower temperature (between 86°F and 104°F) and then rinse them twice with cold water at three minutes each, according to Yonsei University in Seoul, Korea.

Also remember you will want to dry all laundry in the dryer as opposed to outdoors, where it can collect more pollen and other irritants. ±