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Statistics demonstrate one out of seven insurance agencies will file an E and O claim at some point during their career. Insurance agents rank 4th among professions for claims being filed against them. Only physicians, attorneys and accountants have more (Tillinghast Survey).
An insurance agent broker that is not adequately insured by EO Cost Apply Online risks the possibility of being held fully responsible for the damages if a claim is filed against them.
Insurance agencies render vital services to clients thru advising them to locate and purchase complete insurance coverage. Most agent brokers, however, never consider the exposure involved with the insurance industry. Recommendations that you suggest for coverage, either to obtain or turn down , can return as a law suite where a customer claims that you were faulty in your guidance. Customers facing a financial loss regarding an insurance policy, or miscoverage, can file a legal action against you, endangering your business, income and property.
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Reasons For Insurance Agent Errors And Omissions Insurance
Errors and omissions insurance for insurance brokers protects the agent from any claim, real or perceived, that arose from their involvement in the sale or servicing of an insurance product. Resource Link tailored to serve the small individual agents to large agencies selling insurance coverage. With your policy you get 24 hour protection from claims as a result of negligent acts, errors or omissions arising during your activities as an individual agent or broker or agency. Protection is available for you as a general agent or broker and includes your non-licensed staff.
“We’re in an increasingly litigious environment,” says Claire Wilkinson, vice president-global issues, at the Insurance Information Institute, in New York. “There’s definitely an uptick in the number of agents buying insurance, in part because of the litigious environment. It’s essential for them to have adequate coverage.”
“At this agency, we wouldn't think of operating without suitable coverage,” says Jim Armitage, vice president of multi-lines agency Arroyo Insurance Services, in suburban Los Angeles. “In this litigious climate, people sue at the drop of a hat, and you need to have insurance protection.”
“We wouldn't even dream of doing that,” said Bernstein, vice president of TLB Insurance Services. “The risk is horrendous; it’s hard to believe anybody would operate in the insurance profession without suitable coverage.”
“Even if you could get away with it,” warns Mann of Fireman’s Fund, “it’s not worth it because you would at the very least lose your company appointment. But beyond that, you could lose everything including your house and your business if you get sued and have no E&O protection.”
“Litigation from hurricane, flood and other weather-related claims will clog up insurance company claims offices and courts on a long-term basis. Katrina claim cases will go on for years and years. It’s a flood of litigation, it’s here to stay and it’s only going to get bigger.”
Broker agents without E&O coverage stand to lose their homes, their agencies and their personal possessions.
Insurance Agencies Risk Is Higher Than They Realize
“Agents need to understand their exposures might be much higher than they think they are. So they should buy as high a limit as they can afford. A $1 million limit isn’t adequate for agents in these litigious times.”
Henderson’s comments are particularly true for brokers in California, which is considered the litigation capital of the US. Given the rate of litigation in combination with the high valuations of commercial and residential properties, carrying only $1 million in limits is risky, Henderson says. Defense costs alone could run from $100k to $500k depending on the complexity of a case, he noted.
As An Agent Are You Sufficiently Insured?
There are steps you need to take regarding your livelihood . In the first place, your career as an insurance broker has a lot to do with the care you provide your customers. In the course of carrying out your obligations as an agent, you may commit an error or mistake. Your clients may decide to seek justice in court. If you’re not adequately protected by errors and omissions insurance policy, you may end up bearing the full cost of the litigation process. You can help yourself with insurance agents errors and Omissions insurance. This is a business liability insurance device created to protect insurance brokers from whatever errors, mistakes or omission that may occur while discharging their duties.
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Mistakes and errors happen during your work as a P&C insurance agent. It can occur as a breach of a sales agreement. When an omission occurs, a claim may be initiated against you or your agency. If you’re adequately protected by E and O insurance for P&C insurance agents, you’re protected from funding the full fees of the defense for the litigation that is submitted against your agency arising from any negligence committed or is alleged.
Gaps In E and O Insurance Coverage
Gaps in protection are common in Errors And Omissions insurance. A modest survey suggested that many agents are lack understanding in what a gap in coverage really is or the regrettable consequences. For example several insurance professionals wrongly believed since they were not writing business during specific months, they did not need continuous coverage.
E&O coverage for agents is professional liability E&O insurance specifically designed to handle the risks of insurance agents brokers and agencies.
Property and casualty insurance agents have very specific exposures that escalates with the volume of insurance they do. We know E&O insurance coverage for property and casualty insurance agents and analyze your specific requirements to determine there are no gaps in your professional liability coverage. visit the website
We understand that agencies are striving to reduce costs without sacrificing protection. That’s where we come in. We thoroughly review your business to create coverage specific for your requirements. This often corrects past unneeded coverage and replacing it with the insurance you require.
If you're a successful broker and just bought a cookie cutter policy, you may be opening yourself to more risks and liability. Have our team review your EO insurance policy, and we’ll analyze every angle to protect you and the business you've built.
Since we own a big volume of insurance agency business and no title , we have excellent relations with our providers. As your agency, we may be able to provide more favorable contract with providers and provide superior E&O insurance coverage solutions.
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