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Debunking Common Myths about E&O Coverage
Debunking Common Myths about E&O Coverage
02.24.20141. I document all my
business transactions so I’m protected should a claim arise.
Although you may utilize a traditional or online filing
system, many agreements or promises made regarding the sale of an insurance
product are completed verbally, by telephone or in person. Often times, these
conversations, or portions of the conversation, remain undocumented. As a
result, a large number of E&O claims become a “he said, she said” scenario
that can result in losses for an agent. In this instance, E&O insurance
would help agents pay for legal or settlement fees associated with a claim,
lawsuit and/or litigation.
2. E&O insurance
is not necessary because I never make mistakes.
Agents with a
perfectly error free business history have experienced claims “out of
the blue” from clients for a number of reasons. Regardless of the whether or
not the agent is at fault, the agent must respond to the claim and spend time
and money resolving the claim. E&O insurance reduces the time, effort, and
cost of dealing with a claim, allowing the insurance agent to continue focusing
on selling policies instead of responding to a claim.
3. I no longer sell
insurance so I will never have a claim brought against me in the future.
It is possible for a client to bring a claim against an
agent even after the agent has retired. Many scenarios occur in which a client
finds a coverage error or omission after the agent who sold the policy has
retired or moved on to a different career path. Because insurance agents are
always susceptible to claims, even after retirement, continuous E&O
insurance protection is necessary to help reduce loss and mitigate costs
associated with an E&O claim.
4. E&O insurance
is too expensive and I probably won’t need it.
E&O insurance coverage can be affordable and
comprehensive for insurance agents who know how to find the right policy for
the business they conduct. By selecting insurance coverage that is customized
to an agent’s individual needs, agents not only receive E&O protection, but
they also only pay for the coverage they truly require. Agents can’t predict
when or if they will experience a claim in the course of their career. Because
of this, no agent can say with certainty that E&O insurance is something
they will not need in the future. In fact, some agents experience an E&O
claim for the simplest errors he or she had never realized making. As a result,
E&O insurance becomes the most affordable way to stay protected from
potential loss associated with E&O claims.
All information provided in this blog is for informational
purposes only. The sources used are presumed accurate. CalSurance Associates,
Brown & Brown Program Insurance Services, Inc. and Brown & Brown, Inc.
will not be liable for any errors, omissions, losses, injuries or damages
arising from its display or use and will not assume responsibility for any misguided
information. No guarantees are implied.
Written by
CalSurance Team
Published February 2014
