How to Conduct a Self-Audit

One of the most valuable E&O loss prevention tools an agency has is the self-audit. Each section of this guide includes an audit form that pertains to the various functions performed in the agency. These forms should assist you in performing regular quality control reviews of your internal agency operations.

In addition, use of the self-audit forms will allow you to focus your efforts on those areas most in need of improvement. A regular review of agency policies and procedures will also demonstrate to your E&O carrier that you are serious about loss prevention.

The most important thing to remember when conducting a self-audit is to be honest in evaluating how the agency is doing in each of the various areas of its operations. It is a good idea to have owners, managers, and staff members each complete the self-audit forms and then compare answers. Serious E&O exposures may sometimes be obvious to staff members who are actively involved in day-to-day activities, but less obvious to owners and managers who are more removed from the operational side of the business.

The self-audit consists of four important steps:

Step 1
Complete the self-audits contained in this guide (see Read This First for links to the self-audit forms for each section)

Step 2
Prepare an action plan based on the items with the lowest scores

Step 3
Review all current written policies and procedures and update them as necessary

Step 4
Conduct random, periodic reviews of client files to check for adherence to policies and procedures

Without a regular review of your internal procedures, inconsistencies will develop that can lead to an E&O claim. Your Quality Control Manager can take the lead in performing the self-audit. In addition to lowering E&O exposures, such a review will also improve your customer service, allow you to recognize cross-selling opportunities, and increase your revenue by eliminating gaps in the client’s insurance program.

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