Your insurance agency needs insurance. Yes, you need insurance for your building just in case there's a flood, fire, or other disaster. However, you also need E&O insurance: insurance to protect you from the errors and omissions that can occur as part of your regular business day. Why do you need E&O insurance, and how can you get it?
What is E&O Insurance?
Have you ever made a mistake? Of course you have. Have you made a mistake at work? Chances are if you've been at the same job for a while, you've not only made a small error, you've also made a mistake that required some follow up with a client. Whether you forgot to write down an address correctly or you signed someone up for the wrong insurance product, your mistake could have been inconsequential or it could have had a serious impact on someone's life.
E&O insurance is there for those mistakes. If you or your staff unintentionally make an error or an omission that leads to problems for your clients, those clients could sue your business. In turn, this could cause problems for your business. A small error could lead to very large ramifications. According to Entrepreneur, you must consider "the inherent risk of the kind of work you do" when you're looking for E&O insurance. Since a small mistake in the insurance field can lead to big problems for your clients, you need E&O insurance.
How Does E&O Insurance Help?
E&O insurance helps this problem by ensuring that you are covered in case of risks: the risk of a mistake. While many people are understanding, some of them are not, and others can suffer financial problems themselves due to your business error. E&O insurance covers you for the costs. These include lawyer's fees, administrative costs, court costs, expert witnesses or consultants, and the cost of a settlement as well.
I'll Get It When I Need It
If you work with a smaller number of insurance clients, some of whom ask for E&O insurance, then it's tempting to look for insurance only when you feel that you need it. However, if you hop onto and off of E&O insurance, it can be more difficult to get insurance. Also, you need to have the same E&O coverage when you do a transaction as you do when a claim is filed. Make sure that you have consistent E&O coverage: it's the only way to ensure that you're actually protected.
Is Insurance Too Expensive?
If you're just starting out in your business, everything looks expensive. However, you're at even more of a risk of errors when you're just starting up all of your systems. Start in the manner that you intend to continue.
Don't let a small problem become huge. Look to E&O insurance to manage your risk. Get a quote today.
At American Agents Alliance, we're proud to support independent insurance agencies across the country. Are you curious to see how you can grow with our many membership benefits? Contact us about benefits such as E&O insurance today.