Errors and Omissions Insurance for Insurance Agents: All You Need to Know
As an insurance agent, you provide professional advice and services to your clients. If you happen to make a mistake, you can be liable for any financial damages caused to them. A client might also accuse you of making a mistake, which means you have to defend yourself in court even if you didn’t do anything wrong.
Consequently, you need what’s called errors and omissions insurance for insurance agents (or E&O for short). Also referred to as professional liability insurance, errors and omissions insurance for insurance agents can keep you from having to pay large out-of-pocket sums related to liability and lawsuits. It’s an essential form of coverage, and in this guide, we’ll explain what it is and how it can work to protect you if someone makes a claim.
What is Insurance Agents E&O Coverage?
A type of insurance for businesses, insurance agents E&O coverage protects you from three main types of insurance agent mistakes, errors, or omissions:
- Unfulfilled duties. For example, if you agree to file paperwork related to a new policy or an insurance claim and fail to do so, your client might suffer financial damages. If so, they may file a lawsuit to have you compensate them for those damages.
- Negligence. Let’s say you forget to inform a client about essential coverage that they need, and consequently, they have a coverage gap. If later, an incident occurs and that gap means they’re not covered, and they have to settle the financial obligation themselves, they’ll likely ask the court to require you to reimburse them.
- Errors. You’ve completed all the forms to purchase insurance for your client, but you made a mistake on one of them, and it hurts them financially. Consequently, they may sue you.
Even the most experienced and careful insurance agents commit errors or omissions from time to time. You’re only human, after all. Planning to just be “extra careful” in everything you do rather than maintaining insurance agents’ errors and omissions coverage is a very risky—and potentially costly—strategy. Taking that approach is especially unfortunate when considering that insurance agents’ errors and omissions insurance is very affordable and, in the long run, could save you a significant amount of money and a costly legal battle that could be very stressful and unnecessary.
What Other Professions Need Errors and Omissions Insurance?
What are some examples of other types of professions that might benefit from having insurance agent errors and omissions policies? Well, they don’t use “insurance agent” in the name, but people in finance, real estate, accounting, and related professions can benefit from E&O insurance.
Errors in these fields can be costly to resolve. Simply having coverage similar to an insurance agent mistakes policy in place from day one can remove stress that could be created as a result of an accidental error.
It’s typically recommended or even required that professionals in any of the above or similar industries get proper errors and omissions coverage through their employer or independently.
Get a Quote to Understand the Cost of E&O Insurance for Insurance Agents
We’d be happy to discuss any questions you might have about errors and omissions insurance for insurance agents. Just give us a call or talk to us online.
You can purchase E&O insurance for insurance agents from biBERK for as little as $400 per year in some cases. You can determine your specific cost by getting a fast, free, self-service E&O insurance quote online. This small cost can help protect you from cliams in the event you make a mistake at work.
All you have to do is provide a little information about your business, and in a matter of minutes, you know what you’ll pay to protect yourself from unexpected financial burdens—the type that can quickly put an insurance agent deeply in debt or out of business altogether.
Understanding Retroactive Dates in Errors and Omissions Insurance for an Insurance Agency
A helpful feature of errors and omissions insurance for insurance agents is that it can include coverage for mistakes the agency made before the policy went into effect—provided that they didn’t know about the error when purchasing the policy. This is based on what insurers call a retroactive date.
For example, imagine that you purchase errors and omissions insurance, and it’s in effect as of July 1 of last year. Your insurer may allow you to set the policy to cover mistakes made by the agents in your agency back to, say, January of last year. So, an error made in March—four months before the policy was active—may be covered.
Insurance Agent Errors and Omissions Coverage: What Isn't Covered?
As with every policy, errors and omissions insurance for insurance agents doesn’t cover certain things. These exclusions will vary from one policy to the next. Typically they include things like illegal acts, employee injuries, damage to your company’s property, and injuries to clients or others who visit your place of business.
The common denominator with these exclusions is that the causes aren’t related to your professional advice or services. When you purchase errors and omissions insurance from biBERK, our licensed insurance experts can clearly explain what types of claims are excluded if you have questions. It’s crucial that you, as the policy owner, and anyone covered by the policy understand the exclusions. It’s not a good use of your team’s time to report a claim that the policy clearly states will not be covered.
Is Insurance Agents E&O Coverage Required?
Requirements for E&O coverage vary by location. However, even if insurance agents E&O coverage isn’t required where you are, it’s a good idea to have it. The peace of mind that comes from knowing that an error or omission doesn’t have to damage your business financially is truly priceless. And operating your business confidently tends to impress your existing clients and help you attract new ones.
Plus, not only is it fast and efficient to get a quote online, but it’s also easy to purchase coverage on the biBERK website. The same is true of reporting a claim and managing your other biBERK small business insurance policies—like workers’ compensation insurance, commercial auto insurance, general liability insurance, and more.
biBERK takes the hassles out of properly protecting your business so you can focus on running it effectively.
We’re part of the Berkshire Hathaway Insurance Group, which has provided consistent and high-quality insurance coverage for many happy customers over the last 75 years.
If you have any questions concerning your errors and omissions insurance policy or would just like some help getting any type of business insurance online, contact one of our friendly representatives online. We’re always happy to help.