Business Insurance for Insurance Professionals
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Errors and omissions (E&O) insurance for insurance agents and agencies

E&O insurance coverage, sometimes referred to as professional liability coverage, pays for legal defense costs related to the quality of your work. Insurance professionals may need this coverage to comply with the laws in their state or protect against damaging expenses.

E&O insurance covers mistakes and oversights

A simple mistake in your work or a breach of contract could lead to a client taking you to court. As an insurance professional, you know how devastating a legal battle can be. Fortunately, errors and omissions insurance can protect your business by paying for legal expenses related to accusations of negligence.

This policy provides coverage related to:

  • Oversights and mistakes
  • Breach of contract
  • Failure to meet industry standards

E&O insurance for insurance agents is crucial, as a mistake could lead to a client lacking important protection. In fact, coverage for insurance professionals is sometimes required by state law. For example, insurance producers in Rhode Island are required by law to carry a policy with minimum limits of $250,000 per claim and $500,000 in aggregate.

Every business that provides a professional service or advice should consider errors and omissions coverage.

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What coverage does E&O insurance provide for insurance agents and agencies?

While there are exclusions, such as intentional harm and bodily injuries, E&O insurance covers a broad range of potential pitfalls for agents and other insurance professionals.

Oversights and mistakes

Even experts can make mistakes. For example, you might fail to secure flood coverage for a homeowner in an area prone to flooding, when they specifically asked for full coverage.

If a client sues over a mistake or an oversight, you could face a costly judgment or settlement. E&O coverage for insurance agents helps pay for your legal fees, which can mount up even for a frivolous lawsuit.

Breach of contract

Insurance professionals often sign contracts with clients that outline their obligations and a timeframe for their work. However, it's always possible that something in your personal life could derail your work plans, leaving you unable to fulfill your duties.

For example, E&O for life insurance agents can provide protection if the agent is unable to respond in a timely manner to a client that is trying to update their policy, and that person decides to sue for breach of contract.

With E&O insurance, you can file a claim to cover the cost of the lawsuit, including a court-ordered judgment or settlement.

Failure to meet industry standards

As a liaison, insurance agents connect clients with insurance providers and lenders. Expectations are high, and if your business fails to meet certain standards, you could face a lawsuit.

E&O insurance for insurance agents, also called professional liability insurance, helps cover your financial losses, including court-ordered judgments or settlements decided out of court. Speak to a licensed Insureon agent for guidance on shopping for E&O insurance.

Why is it important to keep an E&O policy active?

There's one important fact you should know about errors and omissions insurance: it's a claims-made policy. You can only receive benefits if your policy is active both when the incident happened and when the E&O claim was filed.

That means you'll need to keep this coverage if you retire or switch from freelancing to a full-time job, if you want protection for your past work. Fortunately, when you buy an E&O insurance policy, you can set a retroactive date to cover losses stemming from incidents in the past.

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How much does E&O insurance cost for insurance agents?

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Insurance agencies pay an average of $45 per month for E&O insurance, but you could pay more or less depending on your risks.

Insurance costs for insurance professionals are based on a few factors, including:

  • Type of business
  • Business size and revenue
  • Insurance products purchased
  • Policy coverage limits
  • Deductibles
  • Claims history

Other important policies for insurance agents and insurance brokers

While E&O insurance covers potential fallout from a professional mistake, it does not provide complete protection. Other recommended coverage options for insurance professionals include:

General liability insurance: This policy covers expenses related to customer injuries, customer property damage, and advertising injuries, such as slander.

Workers’ compensation insurance: Workers' comp is required in most states for insurance businesses with employees. Even sole proprietors should consider this coverage, as it helps pay for medical expenses if you're injured on the job.

Business owner's policy (BOP): This policy combines general liability insurance with commercial property insurance, usually at a lower rate than purchasing the policies separately.

Commercial auto insurance: Insurance businesses that own vehicles need to carry this policy to comply with state laws. It helps cover costs if a work vehicle gets into an accident.

Cyber liability insurance: This policy helps insurance businesses recover from data breaches. It's recommended for small businesses that handle personal information.

Get free quotes and buy online with Insureon

Are you ready to protect your insurance business with an errors and omissions insurance policy? Complete Insureon’s easy online application today to compare quotes from top U.S. insurance carriers. Once you find a policy that fits your needs, coverage can start in less than 24 hours.

Verified errors and omissions coverage reviews

Hear from business owners like you who purchased E&O insurance.
Updated: May 16, 2023

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