Who needs E&O insurance? If you're a smaller insurance agency, you might wonder whether you should bother getting E&O insurance. However, the security that this insurance will give you will make your agency take a sigh of relief.
Do Small Businesses Need E&O Insurance?
E&O insurance is also called professional liability insurance, and it's vital for all kinds of businesses. If you're in the business of helping people, E&O insurance "protects your business against claims arising from your negligent acts or your failure to provide the level of advice or service the plaintiff expected," according to The Balance. As an insurance professional, those who work in your business are supposed to meet certain industry standards. If you fail to meet those standards or your clients perceive that you have failed to meet them, then your clients could try to hold you liable. It doesn't matter whether you are small or large; your employees could make a mistake, and your clients could sue your business.
Lawsuits Can Damage Your Business
According to Inc., "when a small business is involved in a lawsuit, an owner's concern can't only be about winning or losing — it also has to be about making sure the company stays on track." Worrying about lawsuits can become like a second job at your insurance agency. If you're involved in an actual lawsuit and you don't have the insurance coverage to pay for it, then your worry escalates to a whole new level. You become worried that this lawsuit could break your business.
Lawsuits are expensive. They'll cost you time spent preparing materials. They'll cost you potential clients and current clients. They can also cost you a settlement, if you are actually found to be at fault. All of these costs can be a blow to your business, and depending on the resources that you have to manage those costs, you may or may not be able to recover financially.
Getting E&O Insurance
While E&O insurance may seem like another expense for your business, it's invaluable because it allows you to focus on doing well, rather than on worrying. You know that you need to spend time focusing on your business practices to ensure that you're accurate and consistent. You know that you need to articulate issues and content clearly to your clients. When you have E&O insurance, you can spend time thinking about your best practices because you want to be a better business and less time thinking about how to avoid lawsuits. You can become a more proactive, rather than a reactive business.
Getting E&O insurance doesn't need to be painful. At American Agents Alliance, you can get discounted member rates as well. Consider it an investment in peace of mind at your insurance agency; invest in E&O insurance today.
Nobody is perfect. E&O lawsuits can happen when you make a mistake or when you articulate something incorrectly. They can also happen because your clients perceive you to be in the wrong. As a small business, you must protect yourself.