How can you reduce your insurance agency’s expenses? While it’s not advisable to eliminate your errors and omissions insurance for insurance agents and brokers, you can work to reduce the cost to your agency. That way, you can protect your insurance agency and ensure that you are not paying too much for your E&O insurance.
The Cost of E&O Insurance for Insurance Agents
How much does E&O insurance cost? That depends on a large number of variables. According to The Hartford, “Average costs for E&O coverage are usually $500 to $1,000 per employee, per year.” However, numerous factors such as your location, business type, and claims history can change the rates that you pay.
Although E&O insurance will be costly within your budget, the cost of neglecting this insurance can be much higher. If you don’t have E&O insurance, your business could be liable for many thousands of dollars in claims from clients.
E&O insurance can protect your agency financially from mistakes that result in client losses, accusations that you have failed to deliver a service, and allegations of negligence or breach of contract.
Better Practices Lead to Savings on E&O Insurance
Fortunately, there are many ways to save on E&O insurance. The first way is to improve the practices at your insurance agency so that you can reduce your E&O claims. That way, you can decrease the cost of insurance due to past claims. These practices include:
- Workplace practices that involve quality control to reduce errors
- Safety practices to reduce the risk of inadvertently sharing private information or being hacked
- Communication practices to ensure clear communication with your clients, hear their needs, and set expectations
Other Ways to Save on E&O Insurance
What are some other ways to save on E&O insurance?
- Look for insurance discounts. For instance, joining a group like the American Agents Alliance can allow you to access discounted insurance rates.
- Seek out bonuses. Can you get free cyber liability insurance along with your E&O insurance? Is it possible to combine some of your policies to get better rates?
- Examine the deductibles and discounts on deductibles. For example, you might only need to pay a deductible on damages awarded, or you could be eligible for a zero deductible after a certain number of years if your business doesn’t have an E&O insurance claim filed against it.
- Look into discounts for certain types of staff or certain kinds of professional designations. There may be different rates for new agents or staff with designations such as CIC designations.
Know Your Claim Limits
Before you purchase discounted E&O insurance, make sure that it provides you with adequate coverage. Insurance that is inexpensive but has higher deductibles and a low amount of actual coverage will likely not be as beneficial in the long run.
Looking for E&O insurance? Talk with us at the American Agents Alliance. We have options for your insurance agency, and we’re able to give you options that can reduce your costs. Contact us about E&O insurance today.