Since you work in the insurance world, you know the risks that professionals take every day.
Professional liability insurance protects clients in case they make a professional mistake. It is your job as an agent to guide your clients as they choose professional liability coverage.
Everyone makes professional mistakes. They may give bad advice, or make errors in processing that lead to monetary losses. Often, these mistakes are easily fixed. However, in some cases, a professional mistake can lead to financial losses for a client. Someone may even sue the client for damages.
You should explain to clients that there can be differences in professional liability policies. Professional liability policies may not cover everyone in a business in the same way.
For that reason, director & officer (D&O) coverage may be a necessary part of a policy. This type of coverage can protect parties that play heavy advisory roles when it comes to employee decisions.
These policies can cover members of managing bodies. These might be bodies like governing boards for companies and non-profit institutions.
The policies can also cover a higher-level manager who directs general decision-making within the business. Blame for a mistake may lie beyond just the person who committed the actual offense.
One of these people may give bad information to an employee, who then passes the bad information to a client. That failure in management can lead to financial losses for your clients.
Therefore, a company’s officers are at risk of claims against their management styles. Poor management may make officers more liable than their surrogates.
If a company has officers in decision-making capacities, D&O coverage may be appropriate. You want to make sure that your policyholders have the correct coverage. Always make sure that you understand a company’s structure before writing a policy.
As you prepare to offer policies, contact U.S. E & O Brokers to learn more about D&O insurance choices. You can also call us at (800) 460-6424 for additional information.