Have you purchased or renewed your E&O coverage this year?
As an insurance agent, you’re probably familiar with a type of professional liability insurance called errors and omissions (E&O). Many insurance companies require agents to hold an active E&O insurance policy in order to represent and sell their products. E&O helps protect individuals and companies from paying the full cost of defending against potential negligence claims. Mistakes happen. An agent might fail to disclose important information, communicate poorly, or make a simple clerical error. If the mistake results in litigation, and a judge orders the agent or company to pay the plaintiff, E&O coverage can mitigate personal costs significantly. Fortunately, overall E&O claim rates are pretty low.
Whether renewing, shopping or around, or brand new to the industry, the variety of options for E&O coverage can be overwhelming. Price is important, but there are several other items to consider (just like assisting clients with selecting the health insurance coverage that best fits their needs).
A notable difference is that many insurers offer a variety of coverage limits. E&O insurance policies typically show these amounts in “limits each claim”/”agent aggregate.” So, if a policy is for $1 million/$1 million, it will cover up to $1 million per incident per policy term and up to $1 million total, for the agent/agency, over the course of the policy term. Larger coverage amounts are offered depending on an agent or agency’s needs. Other E&O policy features to consider include the provider company’s longevity, ease of use, payment plan options, and flexibility with deductible options.
If you are in the market for an errors & omissions policy, AmeriLife Marketing Group has partnered with CalSurance to provide a couple of excellent options. Plus, if you submit five active policies to your marketer, you get coverage free of charge. Through CalSurance, we offer two product types, both with $1,000,000/$1,000,000 coverage amounts. Level C (a $321 value) covers Medicare Advantage, Medicare Supplements and Final Expense. Level A (a $456 value, free with 10 active submitted policies) covers the same product lines, but also includes Mortgage Life, Long-term Care, Fixed and Indexed Annuities, Disability, and most other life insurance products.
It is important to keep track of dates for the E&O policy’s term. Be sure to mark your calendars. A lapse in coverage may have unintended consequences including monetary penalties. Another thing to consider: certain E&O providers place caps on agent’s earnings in order to qualify for their policies. CalSurance does not.