Statistics demonstrate 1 out of every 7 brokers will file an E and O claim in their career. Insurance agents are 4th among professions in number of legal proceedings being filed against them. Only physicians, attorneys and accountants have more (Tillinghast Survey).
An insurance agent not properly covered by Errors And Omissions Insurance risks the possibility of being held fully responsible for the damages if a claim is filed against them.
Insurance agencies render vital services to individuals, families, and businesses by advising them to find and contract adequate coverage. Most independent agents, though, do not contemplate the risk involved with retail insurance sales. Recommendations that you provide for insurance, either to purchase or decline, may come back as a legal claim where a customer decides that you were wrong in your guidance. Customers facing a financial loss regarding insurance coverage, or improper coverage, may lodge a claim naming you, endangering your career, livelihood and property.
== Reasons For Errors And Omissions Insurance ==
Errors and omissions insurance for property and casualty insurance agents covers the agent against any allegation, real or perceived, arising from their involvement in the sale or servicing of an insurance product. Errors And Omissions Insurance tailored to serve the small individual agents to large agencies delivering P&C insurance. With your policy you get 24 hour protection against claims arising from negligent acts, errors or omissions arising during your activities as an individual agent or broker. Protection is available for you as an 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 errors and omissions insurance stand to lose their homes, their businesses and their personal possessions.
== Insurance Broker Agents Exposure To 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 $1,000,000 limit isn’t adequate for agents in these litigious times.”
Henderson’s comments are especially true for agents in California, considered the litigation capital of the country. Given the rate of litigation combined with the high valuations of commercial and residential properties, carrying only $1,000,000 in limits is shortsighted, Henderson says. Defense costs alone could run from $100k to $500k depending on the complexity of a case, he noted.
== As A Broker Are You Adequately Protected? ==
There are certain steps you need to take in dealing with your agency. Your career as an agent broker has a lot to do with the care you provide your customers. In the course of carrying out your functions as an agent, you may commit an error or mistake. Your clients may decide to recover damages 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. However, you can help yourself with errors and Omissions insurance for insurance agents. This is a business liability insurance device tailor made to protect insurance agents from whatever errors, mistakes or omission they may commit while discharging their duties.
Omissions can occur anytime while you work as an insurance agent. It may come up as a breach of a sales agreement. Anytime an omission happens, litigation may be submitted against you. When you are properly protected by E and O coverage for property and casualty insurance agents, you’re shielded from funding the full fees of the defense for any lawsuit that is filed against you arising from any negligence committed or allegedly occurred.
== Inadequate E and O Insurance Protection ==
Gaps in protection are common in E and O insurance. Surveys suggested that most professionals are lack understanding in what a gap in insurance really is or the harsh consequences. For example several insurance agency owners incorrectly believed since they were not writing policies during specific months, they did not need continuous coverage.
E and O coverage for insurance agents is professional liability errors omissions insurance specifically designed for the exposure to risk of P&C agents brokers and agencies.
Property and casualty insurance agents have very unique risk exposures that increase with the volume of business they write. We understand E and O insurance coverage for property and casualty insurance agents and analyze your specific situation to ensure there are no gaps in your professional liability insurance coverage.
We are keenly aware that agents are attempting to cut expenses without sacrificing coverage. That’s where we come in. We thoroughly review your business to develop a solution specific for you. This often eliminates purchasing unneeded coverage and replacing it with coverage that you do.
If you’re a successful broker agent and just bought a generic policy, you could be open to more exposure and liability. Have our team review your Errors and Omissions coverage, and we’ll review every angle and help protect you and the business you’ve built.
Because we have a large book of E and O coverage for insurance brokers, we have favorable working relationships with our underwriters. As your advocate, we can often negotiate more favorable terms with carriers while providing better E and O coverage solutions.
Errors & Omissions Insurance For Insurance Agents and Brokers
Errors & Omissions Insurance For Insurance Agents and Brokers