It is critical to get insurance right as an agent and business owner, but sometimes the specialty coverages become complicated. When you think about professional liability coverage, you may be confused about which coverages you need to have for your specific risks.
Employment Practices Liability Insurance, Errors and Omissions Insurance, and Directors and Officers Insurance are all important coverages to consider purchasing as a business owner, but which ones are the right insurance policies for your needs?
Read on to learn more about these specialty coverages, what they are designed to protect you against, which one you may need to consider, and how to purchase EPLI and E&O insurance policies.
EPLI or E&O – Which Coverage Do I Need?
As a business owner, you have many important insurance coverages to consider, including EPLI and E&O.
Employment Practices Liability Insurance (EPLI)
Employment Practices Liability Insurance, or EPLI, is important coverage for business owners with employees to have. It is a specialty insurance policy that provides protection for businesses against wrongful acts in employment practices. It can provide cover for such things as wrongful termination, discrimination in hiring, defamation, or failure to promote or evaluate fairly.
EPLI policies can provide protection against these risks for employees at all levels, including management, directors, and officers. Common exclusions found in the EPLI policy include intentional acts, bodily injury, and property damage.
EPLI policies, similar to E&O insurance policies, are often written on a claims-made basis. This means coverage is triggered when a claim is made against the policy, rather than when it occurred. E&O, EPLI, and D&O policies are usually written this way since there can be a gap between when incidents occur and are claimed.
Errors and Omissions (E&O)
Errors and Omissions Insurance (E&O) is a critical coverage for agents to have – and anyone employed in the business of giving advice should consider purchasing this insurance coverage. Like EPLI, it is a type of liability insurance. It is designed to protect professionals from claims made by a client for negligent acts and omissions.
An Errors and Omissions insurance policy is considered necessary for many professionals who give advice or provide a service for a fee. E&O is also referred to as professional liability insurance. Specialty forms of E&O insurance are available, like malpractice for doctors or Lawyers Professional Liability for attorneys.
What About Directors and Officers (D&O) Coverage?
Directors and Officers (D&O) coverage is another type of professional liability insurance that you may want to consider. D&O is designed to protect individuals who serve as officers or on boards of directors from claims made against them while serving in this director or officer capacity. It also provides some measure of cover for the business that employs these individuals in these roles.
Typical exclusions found in D&O policies often mirror those in other professional liability policies, including bodily injury, property damage, and intentional acts like fraud or misrepresentation.
How do I Purchase EPLI, E&O, and D&O Coverage?
Many carriers sell these professional liability policies, and you may be able to purchase a packaged policy with these and other coverages bundled together. Comparing your options between carriers is always a smart move since rates and conditions may differ between insurance carriers.
Final Thoughts
Protecting your business by having the proper liability coverage in place for your specific risks is important. A lawsuit could destroy your business, so it is important to understand the differences between the various professional liability insurance policies and which ones you need to have.
EPLI is designed to protect you against lawsuits related to your employment practices. E&O coverage helps protect you from lawsuits from clients alleging negligence or omissions in your professional advice. D&O is insurance coverage meant for directors and officers and protects these individuals as well as the business they work for.
The American Agents Alliance offers E&O coverage for agents. Our website has more details on how you can become a member of the American Agents Alliance to access all member benefits.
