Running a business is not easy. There is always a chance that something could go wrong, or that someone could make a mistake. In these events, a business becomes a risk to its own finances and its customers.
Insurance agents have a responsibility to offer the correct services to their clients. If an agent issues a policy incorrectly, it could threaten the the safety of a client. This could have negative financial ramifications on the company.
Insurance agents themselves need insurance. Errors & Omissions (E&O) insurance can help companies protect risks in case of mistakes.
What is E&O Coverage?
Errors & Omissions coverage means to help employers in case they make professional mistakes or recommend bad services.
E&O coverage can help you pay for claims of negligence, which means giving the incorrect services. It can also help in case those services personally harm a client. Also, it might help a business when errors bring harm to the establishment itself.
There is always a chance that insurance companies could offer bad services. An agent could incorrectly issue a policy, or improperly manage a client’s payments. Doing so could harm the clients. The clients could then request damages from the company because of this mismanagement. In these cases, E&O coverage could help you cover legal costs or other compensation you might owe a harmed client.
Extra Steps to Protect Your Business
Intentionally neglecting your operations could put you at a liability risk for your E&O insurance provider. As an agent, you should do everything you can to prevent E&O insurance risks within your agency.
Taking some of these steps can help you build a better, more trustworthy brand.
- Ensure that you only hire professional, licensed insurance agents. Maintaining a professional staff means you can cut the risks of mistakes. Most states require insurance agents to carry licensing to issue policies. Therefore, make sure agents have all proper qualifications.
- Require proper training in your staff. Make sure that they can properly adapt to the changing insurance industry as needed. Many insurance companies periodically review staff performance.
- Keep your office aware of any changes in state insurance requirements and regulations. Doing so will help ensure that you always issue policies correctly.
- Stay abreast of developments within the insurance industry. Companies often change policy practices. Ensure that you and your staff follows all changes to insurance policy offerings.
- Maintain transparent business practices. Have excellent oversight of your finances, business practices, and staff conduct.
An insurance agency should take advantage of E&O insurance to better protect its own risks in case of mistakes. However, the business should do everything it can to reduce E&O risks in the first place.
U.S. E&O Brokers can help you get an E&O insurance policy that best meets your own needs. Talk to one of our agents to get a fast, free insurance quote. Call us at (800) 460-6424 for more information.