Why Agents Need Errors and Omissions Insurance

Why Agents Need Errors and Omissions Insurance

Insurance agencies more than any other profession realize the need to protect their firms, agents and producers from litigation in the event of an error or omission in the course of providing their services. In fact, insurance carriers require proof of insurance agent errors and omissions (E&O) insurance before appointing an agency.

 

E&O insurance is specifically designed to offer protection to agency professionals for the array of emerging exposures they face and can help protect the firm against losses resulting from negligence, errors, and also omissions in the performance of professional services. The policy, depending on the level of services provided can be tailored to fit the business needs of agencies both big and small.

 

Many insurers provide comprehensive risk management services

 

In addition to the actual coverage, the policy is also designed to assist in proactively mitigating many liability exposures. The majority of the lawsuits that are associated with insurance agents have arisen out of allegations that agents failed to properly instruct clients on the type of coverage they may require, or failed to provide accurate quotes for the amount of coverage needed. Many times a lawsuit is filed because the agent or seller accidentally left out information, regardless of their good intentions.

 

If an agent is concerned about a deal not going through, and fails to provide services or products that protect their clients’ interests, then they are doing a disservice to that client; after all, if a client makes a decision based on erroneous information, then they are purchasing insurance options which they may have otherwise declined.

 

Agents should make a point to go over all options carefully, since the facts that may affect the desirability of coverage. Under no circumstances should agents hide any information (that may be crucial to the decision-making process) from a buyer. Every agent has an obligation of honesty and good faith toward the buyer, which includes the duty to disclose any and all information.

 

Always conduct meetings properly

 

While the notion of being an expert in the field of insurance services is something that every prospective client looks for, it is important for the agent to stand by the information being given in order to be certain that the product fits the needs of the buyer. Insurance agents errors and omissions insurance is the right policy for dealing with allegations or issues of failure to disclose pertinent information.

 

photo credit: USDAgov cc

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