E&O insurance provides coverage to insurance agents if they find themselves at the end of a claim accusing them of being negligent in providing professional services. Before deciding on buying an E&O policy, there are a lot of things to consider.
Such factors might include the coverage itself, exclusions, conditions, and endorsements regarding the policy. Even when you are renewing your policy, these factors need to be taken into account. Here we look at some of these essential elements to consider when procuring E&O insurance for insurance agents:
Policy limits The policy limits for every E&O insurance might not be the same. On average, the policy limit of an E&O policy for insurance agents is $1 million per claim. You might require a larger policy limit than the industry average, so shop around for E&O coverage that offers a larger policy limit.
Deductibles A deductible is an amount that a policyholder will pay out of their pockets before the carrier will pay for any expenses. The most common deductibles for E&O insurance range from $2,500 to $5,000 per claim. If you can afford to pay a higher deductible, it will help you lower premiums.
Products covered The last thing you want is to buy a policy that doesn’t cover the services you provide. E&O insurance should help to cover losses that result from a claim made by your client. Some policies offer the list of products that are covered; thus, you should carefully review such listings to get the best coverage for your agency.
Retroactive date Insurance agents might think that E&O insurance will cover for claims made before the retroactive date of the coverage. However, an E&O policy is available on a claims-made basis. So, any claims that are made before the retroactive date are not covered.