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Guide for Selecting an Agent

Education districts use insurance to shield themselves, their employees and their board members against financial losses related to district operations. Unless a district has a qualified expert on staff, it should contract with an insurance agent/consultant of record to guide its insurance choices. This document reviews factors a district should consider in choosing such an agent.

To begin with, an agent should be trustworthy, knowledgeable and responsive. An agent also should be able to evaluate insurance companies to find the right one for the client. The evaluation should consider:

1. The insurance company’s ability to pay claims covered by the policy.
2. The company’s history and reputation for managing, defending and paying claims.
3. The qualifications of the company’s claims adjusting and legal-defense counsels.
4. The company’s ability to consult with the district and listen to district concerns regarding claims and lawsuits.
5. The comprehensiveness and price of the policy.

An agent’s services range from Basic to Enhanced, depending on factors such as the district’s size, type, budget, location and activities.

Sample Basic Services

In a Basic package of services, an agent will conduct the following activities:

• Review all district exposures.
• Identify and list all district real and substantial personal property, noting properties with actual and replacement values over $1,000. This activity covers buildings, vehicles, land and equipment.
• Compare property values with current coverages, to identify coverage gaps, and under- or over-coverage.
• Review insurance markets for best cost-benefit coverage options.
• Recommend placement of insurance business with reputable, solvent organizations.
• Review coverage documents for needed content, maintain documents and deliver a copy of all coverage documents to district.
• Submit claims to coverage adjusters.

Sample Enhanced Services

In an Enhanced package of services, an agent will conduct the following activities:

• Annually coordinate the inspection of all real and substantial personal property. Inventory the property, and establish actual and replacement values.
• Assist in claims processing and communication.
• Train and meet with the district safety committee.
• Advise on self-insured retentions, coverage strategies and risk transfer.
• Frequently communicate with district staff.
• Review and be familiar with all district operations for exposures to employee/invitee injury and property loss.
• Review loss histories and suggest management strategies and systems for reduction and elimination of future losses.
• Review district policies, including personnel policies.
• Review bond, crime, boiler and auxiliary exposures.
• Review all district contracts for coverages; execution; risk transfer, reduction and elimination; hold harmless; and indemnity issues.
• Advise on employee benefits programs (workers’ compensation, health, dental, vision, life, disability, retirement).
• Annually report on loss histories, risk management results and insurance schedules.
• Advise staff and board on risk management training opportunities.
• Review all coverage documents. Explain coverages and gaps, and advise on alternate strategies.
• Provide planning for disasters, emergencies, business interruption and other contingencies.
• Provide OSHA compliance advice.
• Perform loss prevention and control surveys and inspections. Recommend future actions.
• Assist in early-return-to-work programs.
• Expedite first-party claims adjustments.
• Analyze claims histories.
• Attend board and staff meetings as required.
• Provide motor vehicle reports.

Agent Disclosures

An insurance agent/consultant should provide any prospective client a written disclosure statement containing the following information:

1. A description of the nature of the work to be performed by the insurance agent.
2. The applicable occupational and educational background of the agent.
3. The area or areas of insurance in which the agent has particular expertise.
4. The fee schedule and any other expenses that the agent charges, and whether fees may be negotiated.
5. The name of any person, other than clients, that the agent represents.
6. Whether the agent will receive any commission or obtain any other compensation for services provided the client in addition to fees and other expenses paid by the client.

Disclaimer

The above samples of services indicate many, but not all, of a public entity’s risk management issues. This sample has been created for districts’ and agents’ use in determining a district’s reasonable expectation of agent services relative to its needs and a reasonable charge for such services. It is not intended to take the place of a district’s or agent’s professional judgment, a district’s responsibilities in managing risks of loss, or applicable Oregon laws.