Insurance agents can become targets for litigation for the same exact reason they’re in business in the first place; to provide a service to individuals, families and companies looking to find and obtain proper insurance protection for their essential needs. Many insurance agents, however, underestimate the amount of risk that’s involved with their profession, which is the main reason that errors and omissions, or E and O insurance for insurance agents is such valuable coverage to have.
Because, as part of their job they make suggestions or recommendations on the types of policies they feel will benefit their clients, or they feel they should bypass, this can come back to haunt them (in the form of a liability) in the event a client feels that they were erroneous in their judgment. If a client faces a major problem as a result of an insurance policy they did or didn’t purchase they might decide to file a lawsuit against the agent, which could possibly endanger the agent’s career, income and possessions.
Why do insurance agents need E&O insurance?
Statistics illustrate that nearly 1 in 7 insurance agents will, at least once during their career, be involved in an E&O claim. Insurance agents are ranked fourth on the list of the most often sued professionals, which might be alarming to some. An agent not properly covered by an insurance policy for professional liability issues risks the possibility of being held fully responsible for any damages if a claim is filed against them.
E and O insurance for insurance agents will help protect the agent against any claim, whether or not there is merit for the claim, that may have arose from their personal involvement in the sale or servicing of an insurance product. This coverage serves against claims arising from negligent acts, or errors or omissions arising from any business-related activities as an individual agent or broker.
Coverage is available from local insurers, many of who are experienced in professional liability coverage concerns. This is easily the most important policy for insurance agents to carry, and no agent can afford to offer his or her services without having E and O insurance for insurance agents in place.