You’re an insurance agent, so you know how important it is for people to have proper coverage. But, you’re in the insurance business. You need coverage yourself.
Insurance agencies strive to run trustworthy businesses in their communities. Having insurance protections should be a no-brainer. Proper insurance can protect your agency in case of accidents involving the business.
Even the process of protecting others’ risks can come with risks itself. Insurance agents often deal with sensitive information. They run the risk of making mistakes, however accidental the mistakes may be.
Many insurance agents invest in a type of insurance called errors and omissions coverage (E&O coverage). In a nutshell, this insurance can help protect your business from inadvertent negligence claims.
What is E&O Coverage?
Let’s say that you are writing a policy, and neglect to properly file the policy. You might neglect to give an auto insurance customer the proper levels of coverage.
The driver might have an accident and find out that their insurance is no good. The driver might allege that you failed to properly cover their vehicle. He or she might sue you for negligence.
Errors and omissions coverage is sometimes called professional liability coverage. This coverage generally protects your business from claims of negligence or professional failures. If you issue a bad or incorrect policy, this insurance could help you if you face a claim of negligence.
Important Aspects of E&O Coverage for Agents
E&O coverage is multi-faceted and can cover many different types of negligence. Many aspects of E&O coverage make the policies beneficial to insurance agents.
- Alleged or Actual Negligence Coverage: This coverage typically protects you in case of claims of mistakes or errors in your professional duties.
- Claims from Past Services: Some insurers will cover you for claims that someone makes for past services. These are services that you gave before you bought the policy. Make sure that you have past service coverage. If you don't, your policy may only cover claims made after the policy's start date.
- Defense Costs: Costs can arise from defending a negligence suit in court. Some E&O policies will cover the legal costs associated with suits.
Also, E&O insurance might cover copyright infringement claims, worldwide claims and personal injury claims.
However, these policies won’t cover every aspect of your business. E&O policies will likely not cover fraudulent acts, property damage or false advertising.
Even so, it is important for you to buy an E&O policy that is appropriate for your agency. Each policy varies in what it does and does not cover. You never want to risk your reputation by making negligent mistakes in coverage. However, if an unfortunate mistake does occur, you can protect the business.
Learn more about our E&O insurance for insurance agents here, and call U.S. E&O Brokers today at (800) 460-6424 to start coverage.