In every business, mistakes happen. The same can be said about insurance agencies. Without E and O insurance for an insurance agency, you may be liable for costs associated with lawsuits and settlements due to errors. Here is what you need to know.
Why Invest in Coverage
The biggest and most simple reason to invest in E&O coverage is that everyone makes mistakes. Your agents may be professional and you may have strong risk management practices, but mistakes will, no doubt happen. When a mistake happens, you are liable. If you do not have E&O coverage, then you are taking a risk financially.
For example, say that you don’t suggest a certain insurance policy that your client eventually needs. If your client suffers a financial loss, he or she might choose to hold you liable. Even if you do not feel like you’re liable, you still have to fight it.
What E&O Coverage Covers
E&O policies cover a variety of costs associated with errors and omissions. The coverage is for settlements, defense costs and judgments. Even if there were no grounds to hold you accountable, you still have to spend money to fight the allegations.
When it comes to protecting your insurance agency, you need the appropriate insurance coverage. This is why every agency should have E and O insurance for an insurance agency. Never let a lawsuit catch you off guard.