Why Do Insurance Agents Need E&O Insurance?
What is E&O Insurance?
In case you’re new to this, E&O insurance is errors and omissions insurance. As an insurance agent, it is especially important to have this type of insurance coverage. It is a type of liability insurance, but goes into more depth than your typical general liability insurance policy. General liability insurance usually only covers bodily injury, property damage, personal injury, or advertising injury claims. Since making a mistake on an insurance policy or claim rarely leads to any of these, a general liability insurance policy wouldn’t do an insurance agent much good. An E&O insurance policy helps to protect professional advice and service-providing individuals and companies from being responsible for the full cost of defending against a negligence claim made by a client. This insurance also protects from any damages awarded as a result of the lawsuit.
Why Do You Need E&O Insurance?
No one is perfect, and we’re all bound to make mistakes. Of course, no one makes mistakes on purpose, and this is exactly why insurance agents need to be insured against them. Your job is to help clients, and you do your job well. However, sometimes these mistakes happen--and they can cost clients dearly. A negligence claim could be filed by a client as a result of an alleged failure to perform on the part of the agency or a financial loss caused by an error or omission in the service or product sold by the agency. If a client decides to file a civil lawsuit, E&O insurance would help you pay for your legal defense, and if damages are awarded, it will help to pay for those damages as well.
What to Look For in a Policy
Just as with any type of insurance, a stripped-down policy will get you a stripped-down price--you get what you pay for. The best policies are offered by companies who lead the business and have been rated well. If an agency offers defense costs outside the limit of liability, offers coverage for agents with less than three years experience, can offer limited EPLI (employment practices liability insurance) coverage, and has an option to reduce the deductible after holding a policy for a certain amount of time, that’s the type of agency that you want to do business with. As an insurance agent, it is especially important to have this type of liability insurance coverage to protect yourself from potential lawsuits. Don’t leave yourself out in the cold by neglecting to be prepared for the unexpected. Take a look at our affordable, broad coverage E&O insurance program right here E&O insurance program.