Insolvency coverage is an important element of an insurance agent errors and omissions program. Many insurers will include insolvency in their plans, however not much attention is paid to it. Some have found out too late that they are not covered for insolvency due to certain requirements that they have not met. There are important factors that agents should be aware of in regards to their insolvency coverage.
They Differ for Each Insurer
Some individuals mistakenly think that all insolvency clauses are the same. It is important that an agent checks to see the particular parameters of the plan they are in or are considering. Most plans today do have them, however there are still those that do not.
Each insurer has specific company rating requirements that can affect an agents insolvency coverage. Some require that the rating come from certain companies and that it is calculated utilizing a particular scale. Furthermore, the qualifications may be specific to the sign, meaning if a company requires an A rating, an agent with an A- rating could not qualify.
Along with rating requirements, companies may also have size requirements. Again, this will vary according to the companies set precepts, as well as organizational requirements.
It is important that agents know what stipulations are in place regarding their insolvency coverage. Before committing to an insurance agent errors and omissions program, one should make sure that it provides all the right coverage.