Will someone lose the infamous post it note already?

August 7, 2007

When will we ever hear the last of the infamous  post it “sticky ” note? You see, it’s become quite the talk in lawsuits and insurance articles since Katrina. Together, let’s find a way to bury the use of the dern practice.

First of all, a little history on the real intention of post it notes by claim managers.

There was one school of thought that said you shouldn’t use sticky notes on claim file jackets because “if it’s not in the activity log …….it didn’t happen”. The problem is that sensitive adjusters didn’t like being critiqued in a claim file where their errors were pointed out. You see files are always pulled later for various management surveys and they did not like the perception others would have that they didn’t understand their job or were error prone on file requirements. Managers that dared to use the logs to properly document their review activities faced the risk of being unpopular which could lead to negative comments on the much dreaded employee opinion surveys where adjusters rate their managers. Carriers often require management log notes be written in a dedicated color thus the term “red ink” in the file. It stands out  as if to say “wrong wrong wrong” and adjusters just don’t like it. Adjusters often felt the need to then “duke it out” in the file to justify their activities which is never pretty in an activity log.

The other side of the fence used to use them as it was more “adjuster friendly” to avoid critiquing an adjuster’s work product in the file while you gave them a first opportunity to correct the error of their ways unless you found trends with the same mistake often repeated. First of all, this practice is wrong as management reviews are an important aspect of the claim process to make sure all coverages are addressed and that files are properly documented. By using a post it note, they could easily detach from the claim jacket and a manager risks the possibility that the adjuster will throw out the note hoping for a less particular manager to review and approve the file while their boss was on vacation or while multiple managers are assisting with file reviews during a storm. Anyone in management knows the adjusters who circumvent their file authority and run over to another manager to see if they’ll approve it. We are all too busy to have to review claim files  multiple times  especially during a catastrophe operation. A manager shouldn’t have to go back through an entire file to verify the errors are then later  corrected especially with a volume of claims during cat season. They should be able to review their prior log entry and then be able to go right to the pertinent items in question to assure that the necessary corrections are made. Another reason the practice of sticky notes should be avoided is because it became all too convenient for the manager type who lacked the confidence to make a call on a tough decision in the file. Rather than be questioned later by their middle manager for a call they made during an audit, they’d give the adjuster instructions outside of the file on a post it note. Great- just great! Where does this leave the adjuster if a case went to suit over a coverage decision they handled at the request of their manager? I know I nor the adjusters I came up the ranks with appreciated a spineless claim manager type who wouldn’t support their decisions in a file.

So I continue to ask myself- what could they have been thinking with this infamous little sticky note? You mean you haven’t seen it? Here it is as shown in numerous articles……..

The importance of avoiding the use of post it notes becomes quite apparent when viewing the following news stories and litigation complaint allegations. We are not picking on this one carrier as we are sure this isn’t the only firm who has ever used a post it note while providing instructions for the reasons listed at the beginning of this blog.

The sticky note shown above comes from this article by ABC News. You’ll also see it blasted in the press in this article about MS Gene Taylor’s testimony at a house subcomittee hearing . How about the fact it’s traveling the political blog circuit such as Ana Maria’s A.M. in the Morning blog here. If it hasn’t made the nationwide circuits enough in the news, how about the fact it’s appeared in this document presented by MS Attorney General Jim Hood as part of his testimony before another house subcommittee(see page 34 of pdf document). It seems no one is exempt from having to testify about this as shown in the deposition of Ms Deputy Insurance Commissioner Harrell who was even asked about it as shown in this Scruggs Katrina group pdf document of Harrell’s deposition on page 98.

We can’t pretend to understand why such an important comment was made on a sticky note as we have no idea. The fact this sticky note is making the rounds through Katrina litigation speaks volumes about the perception by those writing about it. You read the postings and you decide what those perceptions are and I don’t think you will find them a positive reflection on our industry.

You should avoid the use of  post it notes in all cases. Electronic activity logs in the ever increasing use of electronic claim management systems hopefully will decrease the use of such practices. This wouldn’t help resolve the verbal instructions some managers may give you. Hopefully, you can use this blog entry to open dialogue in your firm to address  how serious it is that all pertinent documents and instructions be placed where they belong in activity logs. Adjusters need to make sure their managers are willing to “go out on a limb” when instructing them and they need to make sure their files hold up under file review so the use of instructional management comments aren’t necessary. If you are having trouble with a  manager unwilling to log their comments, you might approach a manager with your adjusting firm and share this blog with them  so they can then pass this information on to someone with the carrier so you aren’t the subject of such blog entries and discovery material.

Log notes are an important part of the discovery process. For example, it is not appropriate or good claim handling practice to put the common first contact entry as “called insured, made appointment for X date”. There should be much more discussed in your first conversation such as severity code issues which might involve the need for additional living expense advances, temporary emergency repairs to tarp a roof, and much more. If you are not familiar with requirements for good activity logs to protect yourself and the carrier you serve, you might be interested in Activity Log Self Study Guide, File order, and electronic document naming suggestions to improve your activity log submissions. There are generally accepted guidelines by carriers you need to be familiar with. Not only will good log notes improve the professional file appearance but will  also improve the timelines often used in court against adjusters by logging all appropriate entries in the proper format. It is very difficult to recall the specifics of your meetings and discussions years later should suit be filed on a case as with the multitude of Katrina cases now going to court two years after the fact. Just ask yourself reviewing your log if it is a complete chronology of file events and if it supports the claim file decisions as a stand alone document from initial coverage review through your final settlement recommendations without the need to refer back to another single document in your file.

We thought along the lines of many of you that you could merely assume log note entry training could get a mere mention in your training sessions. That is not the case. During our online 40 hour Fundamentals of Claims class, we have mock claim scenarios set up with sample activity logs and trainees must complete activity logs based on the circumstances in the stated scenario. I can assure you having taught this class for the past 1.5 years, it is not a simple matter of common sense. Without your training and instructions as adjusting firms and carriers, it is not unusual to see even the most experienced adjuster skimping on their activity logs. As we teach the new adjusters, you will see many improper logs when reviewing reassigned files that may have made it through the channels during peak storm activity. The Katrina suits and links above clearly show we need to all improve training in this area. 

Good log notes are one aspect of the file that differentiate a great adjuster from the average.Managers recognize who is  capable of handling complex claim issues thus they are selected for clean up duty to handle reopen files. Any adjuster who has stayed behind for clean up can attest to the fact that it is very difficult to follow behind an adjuster on  reassigned files when they did not document authority extended, pending items, coverage issues and other important discussion details.

Please help us end the improper use of post it notes and other verbal instructions so we never have to view this topic in the perception of the public again! As NIKE says “just do it”…….if it happened log it…period.

Watch for our future  blog on the limited file review practice consisting  only of  a random sampling of closed files being reviewed that will track along with other file requirement discussions showing a smart carrier will not just decrease managers to save on expenses when the reality is it is just moving the claim expense elsewhere in the adjustment expense ratio to defense costs for bad faith claim handling suits…..or is it? We’ll explore the topic and report our findings soon.