Most insurance business owners have heard of E&O insurance for insurance agents, but they may not understand why they need to have errors and omissions coverage themselves. Whether you own a large or small insurance company, here is some basic information that you should know about errors and omissions insurance.
What Does Errors and Omissions Insurance Cover?
Most professionals realize how important E&O insurance coverage is for protecting their business from claims of professional errors. Sometimes claims may be unfounded and sometimes they may be legitimate, but your company will always be responsible for any costs associated with litigation. E&O insurance for insurance agents is typically designed to cover settlements, judgments and defense costs. Even if claims end up being completely unfounded, your business will unfortunately still be stuck with all costs related to defense.
Why Do You Need Coverage?
Whether you are a brand new insurance agent or an experienced agent, everyone is susceptible to mistakes. Some mistakes may be larger than others and may cost your clients financially. If this happens, they may come after your business by filing an errors and omissions claim against you. That is why it is always wise to have E&O insurance coverage to give your business a financial buffer for legal costs.
To find out more about how errors and omissions insurance can offer financial protection to your insurance business, talk to your trusted insurance company.