As a Marketer at Senior Benefit Services, I talk to independent insurance brokers about new products and, more importantly, the easy process in which they can get contracted with us. I’ll throw out statements like, “there are no appointment fees”, “we’ll need your state insurance license,” “…and a copy of your E&O,” assuming that the agent knows what I’m talking about. But when it comes to E&O Coverage, I can’t assume every agent knows what I’m talking about. With this in mind, I think it’s a great time for a quick review on E&O Coverage; as an explanation to anyone new in insurance and a refresher to everyone else.
What is E&O Coverage?
E&O Coverage, which stands for Errors and Omissions, is also referred to as a Professional Liability Insurance. The purpose is simple, to protect business and individuals against claims made by clients for inadequate work or negligent actions. Here’s what you can expect your E&O Coverage to pay for:
- Lawyer fees
- Court costs
- Administrative costs
Why Should an Agent Purchase E&O Coverage?
While we understand that, as an agent, you would never intentionally do anything wrong or have ill intent towards any of your clients, however mistakes can be made, and anything can happen. As an insurance agent, you offer coverage to your clients in case something happens, so why wouldn’t you protect yourself and your business the same way? When it comes down to it, you are better off paying for E&O Coverage than worrying about possible court fees.
But there is another reason you should purchase E&O:
Some carriers require it!
If you are selling Life and Final Expense Products most carriers will require E&O Coverage. If you are selling supplemental products, such as Medicare Supplements, not every carrier will require it, but there are some that will. Regardless of what you are selling, it’s best to have the coverage of E&O insurance. Plus, you won’t miss out on some of the competitive carriers that Senior Benefit Services has to offer.
(Want to know what carriers require E&O Coverage? Feel free to contact Marketing@SrBenefit.com and we’ll be happy to get you more information!)
Where Can Agents Find E&O Coverage?
Typically, most agents can search for an E&O Coverage carrier online. However, before you purchase your coverage make sure you know the answers to the following questions about the E&O Coverage you’re considering:
- What’s the cost?
- What’s the liability coverage?
- What’s the deductible?
- Do I have employees to cover?
- Does it require only ‘A’ Rated carriers
- Is it thru a carrier that I’m required to sell (i.e. BlueCross BlueShield)
Like other types of insurance policies, E&O Coverage can vary from company to company offering different benefits at different pricing.
From our experience we recommend that you get a couple quotes from different carriers to find the best E&O Coverage option for you. We also recommend you check out the website: Insureon. This website has a lot of content available to the public that answers many questions about E&O Coverage and what to look for. Warning, Insureon does want you to purchase insurance through them, but we still suggest you take a look at the free information provided on their website so you make an informed decision about purchasing E&O Coverage.
If you would like some recommendations of E&O carriers we’ve seen come through our Contracting and Licensing Department, check out our list below:
Other websites links you can find information are:
What’s the Average Cost?
Once again, the cost varies depending on the E&O carrier you select, the amount of coverage, and if you are providing coverage for your employees, but from what we have seen, agents can pay anywhere from $500+ a year.
E&O Coverage is optional for the independent broker. However, we do recommend that every agent purchase coverage to have insurance on their own business. It might seem costly, but what can be worse is the cost of a potential lawsuit.
We want to hear from you! If you have comments, helpful tips, or preferred carriers let us know below!
Staff, Investopedia. “Errors And Omissions Insurance – E&O.” Investopedia, Investopedia, 10 Mar. 2018, www.investopedia.com/terms/e/errors-omissions-insurance.asp.
“Understanding E&O Coverage.” Insureon, www.insureon.com/products/errors-omissions/e-and-o-coverage.
“Errors and Omissions Insurance.” Insureon, www.insureon.com/products/errors-omissions
Wells, Andrea. “How and When to Shop for Agency E&O Coverage.” Insurance Journal, 12 Dec. 2014, www.insurancejournal.com/news/national/2014/12/09/349291.htm.
Wells, Andrea. “Today’s Insurance Agency E&O Costs, Coverage and Claims.” Insurance Journal, 10 Jan. 2017, www.insurancejournal.com/news/national/2017/01/10/438287.htm