Every Customer Counts       630-954-1414

Insurance Agents E&O

Insurance professionals provide critical and essential services to individuals, families and businesses throughout the country. Agents help protect personal, family, and corporate assets through insurance and risk management. Often when a client or business has a claim or problem, the agent is the first to respond. 

The question is:  Who insures the agent if they make a mistake?

Coverage recommendations can often come back as a liability issue. Insurance agents are at risk on a daily basis from giving and providing advice to customers. 1 in 6 agents will be involved in an Errors and Omissions (E&O) claim during their career. The average E&O claim cost now exceeds $25,000. An insurance agent should be properly covered by E&O insurance.

At ECC, we have brokers specializing in agents E&O insurance, with extensive experience in retail and wholesale brokerage. Our experience allows us to view your business from your point of view.  ECC offers both standard/admitted and non-standard/non-admitted coverage to meet your individual needs.  Backed by companies with “A” ratings and financial stability, ECC provides the most up-to-date coverage available in the marketplace. 

Common Sources of Agents E&O Claims

  • Failure to add coverage
  • Failure to procure coverage
  • Incorrect explanation of benefits or terms
  • Enrollment issues
  • Incorrect certificate
  • Failure to review or explain coverage, or advise clients about it
  • Failure to obtain excess coverage
  • Gap in coverage
  • Stating coverage exists when it does not

Eligible Risks

  • Insurance consultants                                   
  • Wholesale
  • Retail
  • Life and P&C agents
  • Managing General Agents
  • Program Administrators

Claim Examples

A regional agency received a call from a client requesting that a high valued pump be added to his policy. The insured was responsible for transporting the pump ($15,000 value) 120 miles. The pump was totaled during transportation. The agent failed to have the proper coverage on the policy to cover the pump in transit. The client sued, won and then fired the agent. An agent sold a commercial account based on the insured’s current policy terms and conditions. At the next renewal, the policy terms changed and the agent did not notify the client. The client ended up having a claim that was uninsured, but would have been insured under the previous policy. The claim was settled for 75,000, and the agent lost the client

A high net worth client and agent were good friends. In fact, the agent was invited to the client’s home for dinner more than once. The client was proud of his collections including one piece of art worth $15,000 which he showed everyone. The client suffered a break in and many items were taken including the expensive artwork. The agent had not modified the policy or even asked the client about personal property limits. The claim was settled for $10,000.

Agent Tools

E&O Risk Mitigation – Here are a few actions we’ve suggested to our agent clients to lower or reduce their E&O exposures:

  • Provide training to all staff
  • Document every conversation
  • Date every page on proposals and summaries
  • Develop written account handling procedures
  • Maintain consistent file management
  • Use checklists for every renewal and new client
  • Audit files annually
  • Use disclaimers on policy summaries

Provide written documentation to client on coverage they decline