Chris Burand is one of the top insurance management consultants in the country. Below is an important article that appeared in the May 2020 issue of “Burand’s Insurance Agency Adviser” newsletter. If you own or work at an agency or are a marketing rep for an insurer, I would encourage you to subscribe to his newsletter.


I see consultants selling and agents/producers buying what is really just junk all the time under the name of “Risk Management” and TCOR (Total Cost of Risk) and ERM (Enterprise Risk Management). 90% of the time, it is all worse than junk. What is being sold is a con and it is being sold to people that should know better but are looking for easy, sexy sales solutions.

These are strong words and it is easy to prove I am right. How can anyone on God’s green earth be a risk manager if they have no idea which coverages they should be selling much less what coverages are even contained in the forms they have sold?

Many people have bought into the sales programs without understanding the whole picture and those selling the programs have nothing to gain by explaining the true complexity of a true TCOR, true Risk Management, and a true ERM program. True programs are a lot of hard work and take far more time to develop. Agents want silver bullet sales solutions rather than solutions that are real.

The fact too is that some agents don’t care. Some agents could care less if their clients get the right coverages, provided they get the sale. To these agents I say, may the E&O Gods do what they may and plaintiff attorneys find the list with your names.

I have completed E&O audits and interviewed many of these faux risk managers, both the just ignorant ones and ones who knowingly don’t bother. Their E&O exposures are some of the worst I have seen because when a person offers these services under these titles, all else being equal, their E&O standard of care goes to the highest level possible (the consultants selling the lite version of these programs always seem to fail to mention that point). E&O is often a matter of luck so may fortune be with you. Either way, E&O claims take time to develop between when a policy is first sold, often many renewals, and then the claim development.

Risk Management, TCOR, and ERM must begin with writing the correct coverages because risk management’s most fundamental element is the transfer of risk. The transfer of risk never occurs if the right coverages are not sold. The right coverages absolutely cannot be sold if the “risk manager” does not know his/her coverages AND does not know the form he/he is selling. We have polled producers in our education classes as to whether they have read the policies they are selling and I estimate 80% have not (prior to our program where they read many forms thoroughly). We don’t even ask if they know the coverages. In my experience, many of the producers taking these fake Risk Management sales programs, fake TCOR programs, and fake ERM programs are at a near 95% failure rate. Therefore, not only do they fail to manage their clients’ risk, they exacerbate their own agency’s risk profile.

I am an accredited E&O auditor, certified instructor, expert witness, etc., and I see E&O statistics and claims. Failure to offer the right coverages is a leading cause of E&O claims. When a person is a “Risk Manager,” they have to meet a far higher standard of care for offering clients the correct coverages all the time. Risk Managers have a duty to discuss coverage options, and if they do not know their coverages, they can’t meet this standard. They arguably must also manage all risks — not just the insurance portions of risk.

I will not even get into the math problems that affect those selling TCOR and ERM, but they don’t know how to do the mandatory math required for both of these sales systems to actually work. (I can hear it now, and I’m not being sarcastic, “You mean, math is required for TCOR and ERM?” I’m not being sarcastic because the consultants who train producers on these methods often never mention the required math because they know most producers do not like to do math.)

If you really want to do true risk management, TCOR, and ERM you absolutely must do the following:

  1. You must learn your coverages deeply or have someone on your team who knows coverages deeply design the insured’s coverages.
  2. You must be able to discuss coverages deeply and constructively with clients.
  3. You must know the math.
  4. You must be able to do the math.
  5. You must do all the other risk management too!

Otherwise, sooner or later, you will have E&O claims. While the true practitioners of ERM, TCOR and risk management are limited, when the fakes finally compete against one, they will be embarrassed because their client will see them for the con.

Where do you go, for the few willing to invest the time to become true professionals? This is a profession where becoming truly good requires extra investment. A few good coverage programs remain. While self-serving, I believe my program, in many ways, is the best coverage program available for most people today. Coverage knowledge is where it starts.

TCOR and ERM education is much, much tougher to find. In my experience, at that level, some customization is required to find the program that is the best fit. In some ways, it is kind of like being a doctor deciding what kind of doctor to be. I’ve helped many agents understand and develop the math involved, which is where many programs fail even though math is foundational. Then, depending on one’s emphasis, a person can hone their skills with programs specific to their niches.

You can take a fake degree that will help with sales built on false premises or do the real thing. It is up to you.


Reprinted with permission from the May 2020 “Burand’s Insurance Agency Adviser” Vol. 25, No. 4, Copyright 1995-2020 by Chris Burand. All rights reserved.

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Chris Burand is president and owner of Burand & Associates, LLC, a management consulting firm that has been specializing in the property/casualty insurance industry since 1992. Burand is recognized as a leading consultant for agency valuations, helping agents increase profits and reduce the cost of sales. His services include: agency valuations/due diligence, producer compensation plans, expert witness services, E&O carrier approved E&O procedure reviews, and agency operation enhancement reviews. He also provides the acclaimed Contingency Contract Analysis® Service and has the largest database and knowledge of contingency contracts in the insurance industry.

Burand has more than 30 years’ experience in the insurance industry. He is a featured speaker across the continent at more than 300 conventions and educational programs. He has written for numerous industry publications including Insurance Journal, American Agent & Broker, and National Underwriter. He also publishes Burand’s Insurance Agency Adviser for independent insurance agents.

Burand is a member of the Institute of Business Appraisers and NACVA, a department head for the Independent Insurance Agents and Brokers of America’s Virtual University, an instructor for Insurance Journal’s Academy of Insurance, and a volunteer counselor for the Small Business Administration’s SCORE program. Chris Burand is also a Certified Business Appraiser and certified E&O Auditor.

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information