Errors and Omissions, E&O for Independent Insurance Agents
What is E&O Insurance?
Errors and omissions, otherwise known as E&O insurance, protects businesses from mistakes or errors in the professional services they provide. It is a specialized liability policy that protects a business against losses not covered by traditional liability insurance. It protects you and your business from claims if a client sues for negligent acts, errors or omissions committed during business activities that result in a financial loss.
Why does an insurance agency need E&O insurance?
E&O insurance is critical for businesses that provide a service. If your agency does not have E&O insurance, your agency could incur serious financial impact from a suit made by a client. All professionals in the financial services industry, and especially insurance agents, need E&O insurance. Independent agents are advising customers on how much and what protection they need in the event of their own financial loss. It is incredibly important to make sure you have coverage to protect yourself and your agency staff in case you make an error or are accused of making an error.
What insurance agents should look for in the Best E&O program
You want to look for a carrier with longevity in the marketplace. The professional liability marketplace is ever-changing—carriers entering and exiting the marketplace, changing rates, and fluctuating underwriting positions. Typically, the longer a carrier has been in the professional liability marketplace, the more stable it is when it comes to making changes.
Longevity also impacts a carrier's ability to handle claims effectively. Carriers that have been active in this line of business have established strong relationships with their panel counsel to advise on the potential defense of a claim. Further, the claim adjusters are more experienced in handling claims specific to insurance agents' professional liability, which typically will result in a more favorable outcome for the insured
Financial ratings give insight into a carrier's ability to pay claims, which, along with the potential of financial loss, are ultimately the reasons that businesses purchase insurance. However, insurance companies can only pay claims if they have the funds to do so. It is not uncommon for an insurance carrier to become insolvent, leaving it unable to pay claims. Additionally, beyond claims, an insurance carrier is responsible for costs associated with legal services required to defend a claim. Litigation costs today can amount to significant amounts that most businesses and consumers would be unable to pay without the financial backing of an insurance carrier. If an insurance carrier becomes insolvent, then it can no longer meet its policy obligations to pay loss costs or defense costs on behalf of its insureds.
Not all E&O insurance policies are created equally. You should closely review your policy form to be sure you have the broadest coverage available in the industry. Broad coverage includes, but is not limited to, first dollar defense deductible, expense cost outside the limits of liability, deductible waiver features and a broad definition of who is an insured. Also, you want to obtain limits of liability that will coverage your exposures. Not all carriers can offer high limits, so be sure you are accessing an E&O program that can provide your agency the limits that you need.
The best way to find E&O insurance for your agency
If you are in the market for an insurance agent E&O policy, you should reach out to your local Big “I" state association. The Big “I" has been providing E&O insurance to its members for over 30 years and represents carrier partners that have been offering this product for years.
Why you should consider securing your agency E&O insurance through the Big “I" Professional Liability program
For more than 35 years, the Big "I" Professional Liability Program underwritten by Westport Insurance Corporation, a member of Swiss Re Corporate Solutions (rated A+ Superior by A.M. Best), has been the premiere choice of IIABA member agents for insurance agents and brokers E&O insurance.
The Big “I" Professional Liability Program offers not just a policy, but a comprehensive program for insurance agents. With the participation of Big “I" members from 50 states and the District of Columbia, we've grown into the largest and most stable insurance agents E&O program in the nation.
Find your state association to learn more or receive a proposal.
Big “I" members may also access:
Research and surveys of successful independent insurance agencies: Big “I" studies classify top-performing agencies in six revenue categories, from small to large. These surveys help new and upcoming independent agencies tailor their operations and strategies for success.
Access to Independent Agent magazine: Big “I" members receive a monthly copy of this magazine and weekly digital articles, including market trends and analysis to help agencies succeed.
Assistance with hiring: Big “I" membership provides hiring tools, and it provides access to interview resources and job descriptions to help your new agency hire top talent for your team.
Access to Virtual University: The Big “I" Virtual University provides new independent agencies with a huge research library on numerous subjects, including certificates of insurance, commercial lines and personal lines. It also has experts standing by to answer tough coverage questions.
Insurance company contract reviews: Periodically, the Big “I" Office of General Counsel reviews and provides observations of key provisions of insurance company agent agreements.
Branding resources through a consumer brand, Trusted Choice®: Being independent doesn't mean going alone. Trusted Choice, the recognizable consumer brand from the Big “I," provides a host of tools, with a special emphasis on digital marketing and branding. You don't give up your agency's identity; instead, you co-brand your agency with Trusted Choice to explain to your customers what is different about independent insurance agencies.
Agency listing on TrustedChoice.com: Big “I" member agencies appear on the largest directory of independent agencies available to consumers. TrustedChoice.com has driven more than 30 million insurance shoppers to independent agents over the last few years.