The last year has been challenging for insurance agents in many ways. You have had to find new ways to work and live. We’re all doing more business virtually and have become comfortable with taking Zoom calls in our living rooms alongside our learning children and working spouses.
One result we have seen over the last year is E&O cyber incidents are on the rise. This trend looks like it may continue, so it is important to understand more about why errors and omissions cyber incidents are increasing and what you can do to mitigate your risk.
Read on to learn more and become a member of the American Agents Alliance for access to more helpful information.
Errors & Omissions Cyber Incidents are Increasing
Cyber incidents, in general, have been on the rise. High-profile ransomware cases, such as the recent attack on the gas pipeline, are often featured in the news. With pandemic-related restrictions since early 2020 changing the ways we do business, it is no surprise to see the increase in errors and omissions cyber threats.
Security Failures
Data breaches are a common type of cyber incident. Since insurance agents often collect and store a lot of personal information about their customers, they are particularly at risk for data breaches. Security failures or other errors can lead to lawsuits due to the exposure of personal data about your clients. With employees having to shift to working from home at the start of lockdowns, security failures increased due to vulnerabilities in home systems.
New Technology is Not Covered
With pandemic changes, many new technologies were introduced to make work easier and more efficient – but these new products and services could introduce risk that is not covered by your current E&O policy. It is a best practice to review your policy whenever any major changes happen with your agency.
Clients Find They Have No Coverage
Cyber incidents are on the rise for all kinds of businesses, which means your clients who have purchased commercial insurance from you in the past may face breaches. If they did not have cyber liability coverage on their policy, they may file an errors and omissions claim against you for failing to advise them of their risks and need for this coverage.
This is becoming more common as businesses are discovering the gaps in their traditional policies that were common pre-pandemic. This type of event was not anticipated by most, and coverage fell short when many clients thought they had coverage. Once they are denied by their carriers, E&O claims may begin to emerge.
Final Thoughts
You already know your Errors and Omissions insurance policy is critical to your success as an insurance agent. With cyber incidents on the rise, make sure your E&O policy offers you protection from these risks. The American Agents Alliance can offer you competitive E&O coverage with an included cyber liability extension.
How Do I Learn More?
If you don’t have a quality errors and omissions policy, or if you want to look into increasing your E&O coverage, you can get started right away. It’s easy to get a quote from the American Agents Alliance. Contact us to learn more about our E&O insurance for insurance agents.
