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Errors and Omissions Insurance (E&O) for Insurance Agents

Advising individuals about their insurance needs has its inherent risks. Even seasoned insurance agents can make mistakes or be targeted by unscrupulous customers. That's why it is important for insurance agents and brokers to invest in errors and omissions (E&O) coverage, enabling them to manage the risk of unexpected malpractice claims.

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What is insurance agents' errors and omissions insurance?

  • Errors and omissions (E&O) insurance, also called professional liability coverage, insures professionals against client claims of error, omission, or negligence in the performance of their professional duties.
  • E&O insurance for insurance agents and brokers provides protection against the following common client claims: that the customer was unfairly denied coverage, provided inadequate, inappropriate, or financially unsound coverage, or not properly informed about coverage changes, limitations, or termination.

Why is insurance agents' E&O insurance necessary?

  • Most agents and brokers are required by their insurance markets to carry E&O insurance.
  • General businessowners policies do not include professional liability insurance, covering losses and legal expenses resulting from client claims of error or negligence.
  • Lawsuits against insurance agents and brokers are increasing.

What else should I know?

  • Pricing and coverage for E&O insurance policies varies. Factors include the agent's or broker's size and location, the services provided, and the business's classification.
  • Successfully defending an errors and omissions case requires documentation. Agents and brokers should always maintain detailed records.
  • Not all client claims against insurers feature a clear-cut error or omission. Unfortunately, these claims still can be difficult and costly to defend.
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