Importance of E&O Coverage
Professional Liability Insurance is a necessity for you as an agent. Your clients have high expectations of you. Without proper coverage, you could end up with costly out of pocket expenses.
Debunking Common Myths about Errors and Omissions Insurance
1. I document all my business transactions so I’m protected should a claim arise.
Although you may utilize a traditional or online filing system, many agreements or promises made regarding the sale are completed verbally, by telephone or in person. Often times, these conversations, or portions of the conversation, remain undocumented. As a result, a large number of E&O claims become a “he said, she said” scenario that can result in losses for an agent. In this instance, E&O insurance would help agents pay for legal or settlement fees associated with a claim, lawsuit and/or litigation.
2. E&O insurance is not necessary because I never make mistakes.
Agents with a perfectly error free business history have experienced claims “out of the blue” from clients for a number of reasons. Regardless of the whether or not the agent is at fault, the agent must respond to the claim and spend time and money resolving the claim. E&O insurance reduces the time, effort, and cost of dealing with a claim, allowing the agent to continue focusing on selling instead of responding to a claim.
3. I no longer provided services as an agent so I will never have a claim brought against me in the future.
It is possible for a client to bring a claim against an agent even after the agent has retired. Many scenarios occur in which a client finds a coverage error or omission after the agent has retired or moved on to a different career path. Because agents are always susceptible to claims, even after retirement, continuous E&O insurance protection is necessary to help reduce loss and mitigate costs associated with an E&O claim.
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