As insurance professionals, we at U.S. E & O Brokers understand the unique challenges and responsibilities that come with running an agency. One question we often hear from our peers is whether errors and omissions (E&O) insurance is truly necessary for every insurance agency.
What Is E&O Insurance and Why Does It Matter? 
E&O insurance, also known as professional liability insurance, can help financially protect insurance agencies from claims of inadequate services, such as incorrect advice, negligence, operational mistakes or other shortcomings. Even the most diligent and experienced agencies can be involved in misunderstandings or make mistakes that lead to financial losses for a client. Fortunately, E&O coverage can help cover legal defense costs, settlements or judgments if a client alleges that your agency made a professional mistake.
Is Coverage Required?
In Texas, E&O insurance is not legally required for all insurance agencies. However, certain carriers, industry associations or partners may require you to carry this coverage as part of contracts and business agreements. Additionally, having E&O insurance can demonstrate professionalism and a commitment to financially protecting your clients and other stakeholders.
Risks of Operating Without E&O Coverage
Choosing to operate without E&O insurance can expose your agency to significant risks, including the following:
- Costly out-of-pocket costs arising from client lawsuits alleging mistakes or subpar services
- Damage to your agency’s reputation and credibility
- Fewer business opportunities with carriers or partners who may require you to maintain a policy
Protecting Your Agency and Clients
At U.S. E & O Brokers, we understand that E&O insurance is a vital part of a complete risk management strategy for insurance agencies in and around Houston, TX. If you have questions about liability protection or want to learn more about E&O coverage options, our team is here to help.
Contact us today to discuss your agency’s needs and compare personalized quotes.
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.