Errors and omissions (E&O) insurance, also known as professional liability insurance, is designed to help protect insurance agents from the financial consequences of mistakes or shortcomings. While most agents strive to provide accurate and ethical service, even minor missteps can lead to costly claims. Understanding common pitfalls is essential for minimizing risk and maintaining client trust.
7 Possible Errors to Consider 
E&O claims often arise from misunderstandings, oversights or miscommunications during the insurance process. Consider the following possible allegations:
1. Failure to explain coverage limits—Clients may assume they are covered for certain risks unless clearly informed otherwise.
2. Misrepresentation of policy terms—Inaccurate descriptions of coverage, exclusions or deductibles can lead to disputes.
3. Inadequate documentation—Not keeping thorough records of client communications and decisions may weaken an agent’s defense in a claim.
4. Delayed policy changes—Failing to process endorsements or cancellations promptly can result in uncovered losses for which agents may be blamed.
5. Incorrect coverage placement—Placing a client in a policy that doesn’t suit their needs or circumstances may lead to financial harm.
6. Failure to recommend appropriate coverage—Omitting key coverage options, such as flood or cyber insurance, may expose clients to unexpected risks.
7. Lack of follow-up—Not confirming that a client received and understood their policy documents can create confusion and liability.
How Can E&O Insurance Cover These Situations?
E&O insurance may help cover legal defense costs, settlements or judgments resulting from claims of professional negligence. While coverage varies by policy, it can generally offer financial protection when an agent is accused of being negligent or making a mistake, omission or misrepresentation. Agents should review their E&O policy carefully and consult with their insurer to understand what scenarios may be covered.
Learn More
At U.S. E & O Brokers in [zy_surrounding_areas], we have extensive experience with E&O coverage and can help businesses retain appropriate policies. Contact our team today to discuss your situation and explore available options.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.