An insurance agency puts a lot on the line in their daily dealings. Their reputation, their business, and the well being of their clients is often at stake. First and foremost they must protect their clients and the relationships they have built, but they must also protect their book of business, and their reputation in the community they serve that they have worked so hard for. One way that agency owners protect themselves and their business is by purchasing agency errors and omissions coverage.
E and O insurance for insurance agents is truly a valuable product. Most independent insurance agencies and brokerages purchase coverage today because of the protection that it provides. Most agency owners buy agency E&O coverage to protect the assets of their agency, and this is necessary because statements are made that can be potentially damaging in a court of law.
Language on an agency website can cause potential harm
As is often the case, an agency website may state that the agents are “experts” and “specialists” and that they will make sure that the property values listed are updated each and every year. But what happens when a deal goes awry? The client may point to these statements, which were taken as fact, and say that this wasn’t accurate in how their particular situation was handled.
The agency website may also indicate that the company’s agents provide a wide variety of risk management services, and the agency producer may also make various verbal comments on their expertise saying that they will make sure that the customer is properly insured. Protecting an agency’s assets, both financial and reputational assets, is why most agency owners choose to carry an E&O policy. If an agent makes a mistake in anything that they do on behalf of a client, the insurance company ends up being responsible for it.
Most agencies understand the need for E and O insurance for insurance agents to avoid paying out those large losses which could result in bankruptcy; otherwise they would likely have to sell their book of business, or some portion of their book of business, or even their entire agency, in order to pay those types of claims if they didn’t have adequate insurance.