What is the Best E&O Insurance?
Errors & Omissions insurance from carriers like Calsurance or NAPA protect insurance agents (and other professionals) from any actions that might make them liable against claims of negligence or failing to perform their duties. An important question to ask is, what is the best E&O insurance? The purpose is to protect you and your assets from lawsuits should a claim ever arise. Examples of what an E&O policy could cover are:
- Work Mistakes and oversights
- Undelivered services
- Accusations of negligence
- Missed Deadlines
- Customer injuries or property damage
- Employee Injuries
- Employee discrimination lawsuits
- Damage to Business Property
- Attorney costs & Damages awarded to plaintiff
Some things that may not be covered are circumstances where an agent willingly was fraudulent or deceitful. Essentially, as you could imagine the policy will not cover any type of illegal activity. One thing to note is E&O also does not cover any penalties regarding unapproved marketing materials. If you decide to utilize custom marketing pieces that are not previously approved, make sure to reach out to Pinnacle’s compliance team to assist with getting materials approved by a carrier or CMS.
Things to Know Before Choosing Your Policy
There are different types of coverage required for agents depending on the types of products you offer to your clients.
Life & Health Insurance Agents E&O: Errors & Omissions insurance is for those who offer life and health policies, including disability insurance coverage. These E&O plans can be further broken down into coverage for newly licensed agents and experienced agents.
Medicare Only Life & Health Agents E&O: If an agent specializes in offering only Medicare insurance plans—such as Medicare Advantage, Medicare Supplement insurance, and/or Medicare Part D prescription drug plans—Errors & Omissions coverage can be purchased for this area only, which can help to keep the premium low and prevent you from paying for coverage that you do not need.
Property & Casualty E&O: This coverage is not required for any products Pinnacle offers but is another option that agents should be looking at as a lot of our agents do offer these products. Calsurance & NAPA both offer this coverage.
How Much E&O Insurance Protection Do You Need?
When choosing an Errors & Omissions policy, it is important to determine how much coverage you may require. In doing so, you should first examine your current financial situation in terms of the assets you own, along with the income you earn. In this case, consider what you could stand to lose in the event of being sued by a client.
It is also important to consider the services that you perform, and approximately how many transactions you do each year. For instance, if you perform the same action(s) for many years—not knowing that it was wrong—and then you get sued by multiple clients, how much could you lose in total? In this instance, be sure that you factor in this additional potential risk.
Pinnacle’s Discounted E&O Coverage for Agents
Pinnacle has taken the time to shop E&O carriers for you and negotiated the best discount available through Calsurance. In most cases the discount Pinnacle has setup for their agents should be the best deal you will find. In certain instances for brand new agents or agents who are within their first two years and are earning less than $100,000/year in commissions NAPA has a program that may be a little more affordable. Calsurance has been the most common choice for most agents offering Medicare & Life products. Their 1MM/1MM policy is only $400 per year and covers the standard requirements for most carriers and products. You can browse the specimen policies and different coverage options on Pinnacle’s site here. If you need any assistance in enrolling or choosing the correct policy for your needs reach out to your Pinnacle Marketer today!
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