If you have worked for an agency as a service representative or producer, you probably have not thought much about buying this coverage. As a new independent insurance agency owner, like many new things to think about, you want to think carefully about your E&O. This policy, not unlike most insurances, is one you hope you never need to use. If you do, the intention is to help indemnify the client for your mistake and keep your agency from financial ruin.
It is important to choose the right policy. Insurance agents should be careful when acquiring quotes to look at the policy language, specifically exclusions. Not all policies are created equal. If there is a policy that is 50% less than all the others, there is likely a good reason. They are typically missing coverages you may need.
E&O Classes and Courses. The courses that you likely have to complete every few years for your CE typically have a course option for E&O. This is a great time to take notes and retain them. These CE classes often give you information about how to lessen your risk for having a claim, and how to proceed if you do.
One key take a way as the agent who acquires this policy is to document, document, document. Today’s management systems and digital environment make this easier, but it’s always a good practice in the insurance business. Make sure that your conversations and communications are recorded, documented, dated, and time stamped. This may seem like extra work, but it could save time and money if a claims is filed.
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