Errors and Omissions (E&O) insurance is a form of liability insurance for professionals that protects them against claims made by clients who believe the services or products offered were incorrect or led to a financial loss. E&O insurance can help provide coverage for expenses related to the claims, including legal settlement costs. Whether you are an independent insurance broker or own a big insurance agency, you will undeniably benefit from this type of insurance. Today, we’ll take a look at why insurance agents need E&O insurance.
Mistakes and Errors
Insurance agents and agencies sometimes find themselves at risk of legal action due to mistakes and errors. For instance, a minor professional error that results in a client experiencing a loss could cost you a significant amount of money. Suppose your clients sue you to recover their losses. In that case, E&O insurance coverage can help you pay for the legal fees or any amount a civil court compels you to pay that you otherwise would have paid out of pocket.
Undelivered Promises
As an insurance agent, connecting your clients with the right insurance carriers and policies can come with high expectations. With a single mistake, your clients’ plans can be interrupted. Moreover, when you fail to offer the services you promised, your client may sue you. E&O Insurance also provides coverage for this type of scenario.
Negligence
If you fail to meet the minimum industry standards while working with your clients, they may sue you for negligence. For instance, your client could claim that you gave them advice that led to inadequate coverage. Fortunately, when your client files a lawsuit to recoup their financial losses, E&O insurance helps cover legal expenses, including the cost of hiring an attorney.
Client Trust-Building
Your clients want to know that you are a true professional. This means that you maintain a high standard in terms of how to handle your duties and take responsibility for your mistakes. When you do these things, you can instill trust among clients. And purchasing errors and omissions insurance is the perfect way to show them that you take responsibility for your actions and have a plan to make them financially whole in case your agency causes them any financial harm.
If you want to find out more about E&O Insurance or are ready to protect your insurance business, contact Western Marketing today.