An insurance agent’s job is to ensure that their clients are protected from any and all possible risks. However, while agents are busy servicing their clients, their own insurance needs may fall at the wayside. Errors and omissions (E&O) insurance is crucial for protecting business, and that includes insurance agencies. It takes years of hard work for an insurance agency to build a solid reputation and just one error or omission made by one employee to tarnish it. A mistake as simple as a miscommunication with a client can lead to serious – and potentially costly – claims.
Insurance agents never plan on making a grave oversight, but if and when a mistake happens, E&O coverage is there to protect against such claims. These three key measures can help agents ensure their own protection against errors and omissions claims.
1. Partner with a reliable insurance carrier.
Most insurance carriers and wholesalers offer errors and omissions coverage, but that does not mean that any old E&O policy will cater to the complex needs of an insurance agency. Look for a carrier that specializes in safeguarding insurance agencies from errors and omissions claims and offers comprehensive E&O coverage that includes defense expenses and/or attorney fees in addition to covering settlement amounts. American Team Managers (ATM) offers an exclusive program for Insurance Agents Errors & Omissions coverage, which includes in-house underwriting, experienced staff, fast turnaround, competitive pricing and more.
2. Buy insurance before you need it.
Don’t wait for a mistake – or even just a close call – to decide it’s time buy insurance coverage. If a mistake was made before an E&O policy was acquired, even if the claim was submitted after coverage took effect, it likely will not be covered. The longer an agency is without E&O protection, the more they expose their agents and themselves to risk. Just as agents advise their clients to buy insurance well before they need it, insurance agencies should make sure they are covered from day one.
3. Create a plan for addressing claims.
Even with comprehensive errors and omissions coverage, insurance agents should have a solid plan to address any claims that may arise, as well as strategies to reduce the chances of a mistake happening. Clear communication with clients through all stages of the insurance buying process and in-depth training for agents are two ways that agencies can try to mitigate E&O claims.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.