Errors and Omissions Insurance Coverage
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Statistically one in seven insurance agencies will submit an E and O claim in their career. Insurance agents are 4th among professions for legal proceedings initiated against them. Only physicians, attorneys and accountants have more (Tillinghast Survey).
A broker agent not properly insured by P&C Insurance Agent E&O risks the possibility of being held fully responsible for the damages if a claim is filed against them.
Insurance agencies render vital services to customers through helping them to find and contract complete insurance protection. Many insurance agents, though, rarely contemplate the risk involved with the insurance profession. Guidance that you suggest for policies, either to obtain or decline, could come back as a legal claim where a customer claims that you were faulty in your guidance. Customers facing a financial loss regarding insurance coverage, or lack thereof, could lodge a legal action naming you, endangering your business, livelihood and property.
== Reasons For P&C Insurance Agent E&O ==
E&O insurance for insurance brokers covers the agency against any allegation, real or perceived, arising from their involvement in the sale or servicing of an insurance product. P&C Insurance Agent E&O tailored to serve the small individual agents to large agencies delivering property and casualty insurance. Get 24 hour protection against claims stemming 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 E and O insurance stand to lose their homes, their agencies and their personal possessions.
== Insurance Broker Agents Risk Exposure Is Higher Than They Believe ==
“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.
== Are You Properly Insured? ==
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 insureds. 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. You should help yourself with insurance agents errors and Omissions insurance. This is a business liability insurance device created to protect insurance agents from whatever errors, mistakes or omission they may commit while discharging their duties.
Mistakes may happen during your work as a P&C insurance agent. It may occur as a breach of a sales agreement. When such an omission happens, a claim may be submitted against your agency. When you are properly protected by E&O coverage for property and casualty insurance agents, you’re shielded from funding the complete cost of attorneys for any litigation that is leveled against you and your agency arising from any negligence that happened or allegedly occurred.
== Inadequate EO Insurance Protection ==
Gaps in protection are common in EO coverage. Surveys demonstrated that most professionals are lack understanding in what a gap in insurance really is or the regrettable outcome. For example several insurance agency owners wrongly assumed while they were not writing policies during specific months, they did not need continuous coverage.
EO policies for insurance agents is professional liability E&O insurance specifically designed for the exposure to risk of P&C agents brokers and agencies.
P&C insurance agents have very unique exposures that increase with the volume of policies they do. We understand E&O insurance coverage for P&C insurance agents and analyze your specific situation to ensure there are no weaknesses in your professional liability insurance coverage.
We are keenly aware that brokers are attempting to reduce overhead without cutting 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 professional and just bought a cookie cutter policy, you could be open to more exposure and liability. Have our team review your EO coverage, and we’ll review every angle and help protect you and the business you've built.
Because we own a large book of business, we have favorable working relationships with our underwriters. As your broker, we can often find more favorable policy terms with carriers while providing better EO protection solutions. niccomins.com/NICinsApp.pdf niccomins.com/NICinsApp.pdf
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