Q: What kinds of claims does E&O Insurance cover for insurance agents?
A: Errors and Omissions Insurance for insurance agents covers lawsuits in which your clients claim your business made an error or failed to fulfill its professional obligations. Common E&O lawsuits for insurance agents include…
- Failing to procure or renew coverage.
- Miscommunications and unclear explanations of what is really covered by a client's policy.
- Failing to identify a client's risks (and recommend suitable coverage).
- Failing to file a claim with a carrier or filing an inaccurate claim.
Insurance agent E&O can cover each of these lawsuits, paying your legal bills and covering settlements and judgments you may owe your clients.
What isn't covered by an E&O Insurance policy?
Every Professional Liability Insurance policy will be different so make sure to check what exclusions are listed in your policy. The nice thing about working with insureon is that our agents specialize in insurance for other insurance agents. They'll be able to walk you through what is and isn't covered by each policy in your free insurance quote.
Past and present claims: what's covered by E&O?
Does Errors and Omissions Insurance cover lawsuits about policies you sold years ago? It depends. Errors and Omissions Insurance is a claims-made coverage, meaning it only covers lawsuits about mistakes you made while your policy was active.
If a client sues you because you misrepresented the coverage in their Property Insurance, your E&O policy will only pay for the lawsuit if these mistakes occurred during the life of your E&O policy. If you sold them Property Insurance while you had E&O, your claim will be covered.
Unfortunately, this means that if you have a gap in your coverage history, you'll lose coverage for anything that occurred before the gap. As soon as you stop your policy, you'll lose coverage for past mistakes. For this reason, it's important for insurance agents to keep their coverage active and continuous.