Wednesday, April 3, 2013

Errors and Omissions
Errors and Omissions
Historically 1 in 7 agencies will report an Errors and Omissions claim at some point in their career. Currently insurance agents rank fourth among professions in lawsuits filed against them. Only physicians, attorneys and accountants have more (Tillinghast Survey).

An insurance agent broker that is not adequately protected by Errors and Omissions is exposed to the possibility of being held fully responsible for the damages if a lawsuit is filed against them.

Insurance agents provide essential services to clients thru consulting them to locate and purchase proper protection. Some agents, however, never realize the exposure that is involved with the insurance industry. Advice that you make for coverage, either to buy or bypass, can return as a liability if a client feels that you were mistaken in your advice. Clients facing a major problem with an insurance policy, or lack of coverage, can file a lawsuit against you, threatening your agency, income and possessions.

== Reasons For Errors and Omissions ==

Errors and omissions insurance for property and casualty insurance brokers protects the broker from any claim, real or perceived, that arose from their personal involvement in the sale or servicing of an insurance product. Errors and Omissions tailor made to serve the small individual agents to large agencies selling P&C. With your coverage you get 24 hour protection from lawsuits as a result of negligent acts, errors or omissions arising from your activities as an individual agent or broker. Coverage is available for you as a general agent or broker and includes your non-licensed staff.

“We’re in an increasingly litigious environment,” says Claire Wilkinson, vice president-global issues, at the Insurance Information Institute, in New York. “There’s definitely an uptick in the number of agents buying insurance, in part because of the litigious environment. It’s essential for them to have adequate coverage.”

“At this agency, we wouldn't think of operating without suitable coverage,” says Jim Armitage, vice president of multi-lines agency Arroyo Insurance Services, in suburban Los Angeles. “In this litigious climate, people sue at the drop of a hat, and you need to have insurance protection.”

“We wouldn't even dream of doing that,” said Bernstein, vice president of TLB Insurance Services. “The risk is horrendous; it’s hard to believe anybody would operate in the insurance profession without suitable coverage.”

“Even if you could get away with it,” warns Mann of Fireman’s Fund, “it’s not worth it because you would at the very least lose your company appointment. But beyond that, you could lose everything including your house and your business if you get sued and have no E&O protection.”

“Litigation from hurricane, flood and other weather-related claims will clog up insurance company claims offices and courts on a long-term basis. Katrina claim cases will go on for years and years. It’s a flood of litigation, it’s here to stay and it’s only going to get bigger.”

Agents with inadequate professional liability coverage stand to lose their homes, their livelihoods and their collectible personal assets.

== Insurance Agents Risk May Be Greater Than They Think ==

“Agents need to understand their exposures might be much higher than they think they are. So they should buy as high a limit as they can afford. A $1 million limit isn’t adequate for agents in these litigious times.”

Henderson’s comments are especially true for agents in California, which is considered the litigation capital of the country. Given the rate of lawsuits combined with the high valuations of commercial and residential properties, carrying only $1 million in limits is shortsighted, Henderson says. Defense costs alone could run from $100,000 to $500,000 depending on the complexity of a case, he noted.

== Is Your Business Sufficiently Covered? ==

There are certain precautions you should take regarding your livelihood . In the first place, your profession as an insurance agent has a lot to do with the care you render your clients. When carrying out your obligations as an agent, you may commit an error or mistake. Your customers may decide to seek justice in court. If you’re not properly protected by an insurance coverage, you may end up bearing the full cost of the litigation process. You can protect yourself with E & O insurance for property and casualty insurance agents. This is a professional liability insurance instrument designed to protect insurance agents from whatever errors, mistakes or omission they may commit in the course of day to day business.

Errors happen in the course of your work as a property and casualty insurance agent. It can happen as a breach or negligence of a contract agreement. When an error occurs, a lawsuit may be initiated against you or your agency. If you’re adequately covered by error and omission insurance for insurance agents, you’re protected from bearing the entire expenses of legal defense for the claim that may be submitted against your agency as a result of the error or mistake that occurred or is alleged.

== Gaps In Professional Liability Insurance Coverage ==

Gaps in coverage are common in professional liability policies. A modest survey showed that many agents are unaware of what a gap in coverage really is or its dire results. For example several insurance agents mistakenly thought because they were not writing business during specific months, they did not need continuous coverage.

Professional liability insurance for agents is professional liability EO insurance designed to handle the risk exposure of property and casualty insurance agents brokers and agencies.

Insurance agents have very specific risks that increase with the volume of insurance they sell. We know professional liability insurance coverage for insurance agents and analyze your specific situation to ensure there are no flaws in your professional liability insurance coverage.

We understand that agencies are seeking to reduce costs without reducing protection. That’s where we come in. We completely analyze your agency and develop a solution specific for you. This often eliminates purchasing coverage you don’t need and replacing it with coverage that you do.

If you have a successful agency but only purchased general coverage, you may be opening yourself to more risks and liability. Have our team review your Professional Liability insurance policy, and we’ll analyze every angle to protect you and the agency you've built.

Since we have signed a large book of E and O coverage for insurance agencies, we have excellent relationships with our markets. As your agent, we can often arrange better contract with the insurance carriers and offer superior professional liability insurance coverage options.

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