Taking a break from the 20-year-old reports in front of him, former homicide detective Louis Scarcella looks outs from the witness box in a Brooklyn courtroom. A row of indignant men wearing hats with the words “Wrongfully Convicted” printed on them look back at him. These men, who are now exonerated, are the same ones he helped arrest and imprison decades ago for crimes they did not commit. As it were, the men were framed.
As Mr. Scarcella testifies at the wrongful conviction hearing, one of the victims of the failure of justice, Derrick Hamilton, can’t help but voice his sentiments. It really bothers him, Mr. Hamilton says, that Scarcella hasn’t been arrested, while he and many other wrongfully convicted men are forever labeled as criminals.
Situations like this and other forms of professional liabilities are not limited to the forensic industry, though.
No matter what business you put up or what industry you specialize in, there will always be risks that stand in the way of your path to success. These risks include honest mistakes that can damage your reputation or ruin your livelihood. But such risks also include accusations of making an error and compromising your clients.
Despite the potential negative feedback and other fallout, though, you still need to take risks for your business to stabilize and flourish. Protect the business from negative outcomes and costly legal action through errors and omissions insurance (E&O), otherwise known as professional liability insurance.More...
Why Is E&O Insurance Coverage Important?
Business grows if you understand your risks just as clearly as you welcome progress. You have to be ready for all possible situations and this is where different types of insurance come in.
When working with individual clients, one of the best ways you can protect your agency, if you have one, and yourself as an insurance agent is through errors and omissions insurance. It covers claims against negligent actions and inadequate work. Provisions under this coverage may include defective products, faulty services, and delivery delays and failures that lead to financial loss for the third party.
There are many ways you can put E&O insurance to work. It serves as protection of a company or its workers against seemingly minor mistakes — like missing a waiver of coverage or experiencing client miscommunication — that may actually result in serious claims and catastrophic consequences.
Why wait for errors to occur before you think of ways to address or prevent them?
We all know that mistakes happen. And whether these are honest mistakes, mere accusations can compromise a client and cost an insurance agency a lot of money. For this reason, more insurance carriers require E&O to protect both their client’s reputation and the insurance business.
In fact, a growing number of insurance marketing companies now require this type of insurance for protection and security. While carriers have different requirements, the bottom line is that E&O insurance is valuable for insurance agents and agencies, as well as for their clients.
Participate in our E&O Program for a discounted price. Get Your E&O now.
Which Insurance Carriers Require E&O Insurance? (And Which Don't)
Insurance companies offer different types of policies based on each client’s needs. Agents typically present these coverage options to the client based on what different carriers offer. Before agents can even make an offer to a potential client, however, they might be required to have errors and omissions coverage – for their own protection, as well as for the agency they represent, if any.
These are the different insurance carriers that require and don’t require E&O coverage from agents:
Carrier Name | Is E&O Required? |
|---|---|
Aetna (AHLIC/ALIC/ACI/CLI/Aenta Medicare) | No |
American Amicable (Occidental/Pioneer American/Pioneer Security) | No |
American Equity | No |
American Financial Security Life Insurance Co | Yes |
American General (AIG) | Yes |
American National Insurance Company (ANICO) and American National Insurance Company of Texas (ANTEX) | Yes |
Americo | Medicare - Yes, FE - No |
Ameritas | No |
Assurant | No |
Assurity & Assurity Worksite | Yes |
Athene Annuity and Life Company | Yes |
Atlantic Coast Life Insurance Company | Yes |
Baltimore Life | No |
Bankers Fidelity | No |
Capitol Life Insurance Company | No |
Central States Health & Life Co. of Omaha (CSO) | No |
Central States of Indemnity Life (CSI Life) | No |
Cigna | No |
Combined | No |
Companion | No |
Equitable National Life | No |
Everest | Yes |
EquitTrust | Yes |
Fidelity & Guaranty Life Insurance Company | Yes |
Foresters | Yes |
Gerber Life | Yes |
Gerber Life (Medicare) | No |
Government Personnel Mutual of Life Insurance Company (GPM) | No |
Great Western (GWIC) | No |
Guarantee Trust Life (GTL) | No |
Heartland | No |
Humana | Yes |
Independent Assurance Company (IAC) | No |
Kemper | Yes |
Liberty Bankers (Life) | No |
Liberty Bankers (Medicare) | Yes |
Lifeshield | FE - Yes, Protection Plus - No |
Lumico | No |
Manhattan Life | No |
Medico | Yes |
Mutual of Omaha | No (Yes for some products) |
Mutual of Omaha Medicare Advantage | Yes |
Mutual Trust Life | Yes |
North American | Yes |
Oxford | Yes |
Nassau Life | Yes |
Prosperity Life Group | Yes |
Protection Plus Life | No |
Royal Neighbors of America (RNA) | No |
Sagicor Life Insurance Company | Yes |
Sentinel Security Life | Yes |
Shenandoah Life | Yes |
Sons of Norway | Yes |
Standard Life & Accident (SLAICO) | Yes |
Thrivent | Yes |
Transamerica (Trans Premier/Monumental/Stronebridge) | No |
United Health Care (UHC) | Yes |
United Home Life (UHL) | No |
WellCare | Yes |
Western United Life Assurance | No |
These insurance companies highlight the significance of errors and omissions coverage in protecting the agent as well as the other parties. Nevertheless, insurance policies are not created equal. Some E&O policies pay for defense expenses but not losses; some policies do not even pay for attorney’s fees. For this reason, be mindful when selecting an E&O coverage policy. Make sure it caters to your concerns and meets your specific needs.
Additionally, be mindful of the type of coverage policy that insurance carriers offer. Look for one that addresses the needs of your specific industry and evaluate all carrier options under that industry before choosing an E&O policy to protect you, your assets, and your reputation.
Participate in our E&O Program for a discounted price. Get Your E&O now.
Who Are Often on the Lookout for Errors and Omissions Insurance?
We’ve established what errors and omissions insurance is. But, what type of coverage does it provide?
Carriers provide different E&O policies based on each client’s risk profile, priorities, needs, and concerns. For example, an online business may require coverage for cyber liability risks while a content publisher may look into coverage for intellectual property claims. Liability limits and deductible levels differ, too.
The best way to find a policy that works is to gather quotes from multiple sources and have an agent explain the benefits of each one. Of course, the agent must help look for policies that are most suitable and beneficial for each client’s nature of business.
Professionals in these industries are the ones who most often need E&O insurance:
Doctors and Medical Professionals.
For example, 36-year-old Stephanie needs calf implants for reconstructive surgery. She visits a plastic surgeon recommended by one of her closest friends, who looks better than ever after a non-surgical procedure from the same doctor. But for some reason, there was an accidental switch and Stefanie got buttocks implants instead of calf implants.
Stephanie can file a negligence claim for this malpractice and the E&O insurance can help the plastic surgeon pay for the legal expenses.
Lawyers and Legal Professionals.
Let’s say that 26-year-old Andrew is on trial for second-degree murder, which he claims he did not commit. The evidence against him is not solid, but the judge gives him a jail sentence and he has to serve 45 years in federal prison. Then, it turns out the lawyer missed a crucial bit of information that was not initially available and that could have turned the case around.
Lawyers and legal firms can protect themselves from misrepresentation and negligence claims through E&O insurance.
Architects and Engineers.
A building may collapse due to a strong earthquake. But the building owner or administrator may file a claim against the group of architects and engineers who designed and built it, claiming that the incident could have been prevented if they had the proper foresight. In this case, E&O coverage protects such professionals against heavy monetary consequences.
Accountants and Business Consultants.
Let’s say a digital marketing company has worked with a specific accounting firm for two years now. The company trusts the accountants to audit what needs to be audited and to make sure their financial health looks good. But the company suffers a financial loss and files a professional negligence claim against the firm, saying it is due to the accountant’s actions or oversight.
An E&O policy may protect professionals, accountants and the accounting firms from claims like this.
Error and omissions insurance is not a legal requirement. Nevertheless, it is a requirement of many independent contractors and businesses especially like the professionals cited above. Protection against malpractice and professional liability proves useful in cases of wrongful accusations and honest mistakes, as well as errors, overall.
When Should You Start Looking for E&O Protection?
Insurance agents always advise their clients to buy insurance to guard against financial risks and to be financially secure into the future. Similarly, insurance agents have to be proactive when it comes to selecting errors and omissions insurance coverage. The longer you go without an E&O policy, the longer you expose your agency and yourself to risks like professional liability claims.
Cover all your bases by getting E&O coverage before you open your doors to insurance clients. Also, maintain an E&O policy for at least one year after resigning or retiring as an insurance agent. This way, you stay protected from anything that may arise from your last year in business operations.
But what if you already have E&O insurance?
It is not enough that you secure E&O insurance coverage. Regularly evaluate your coverage to make sure that you have the right type of protection for your current situation.
Additionally, devise a plan that prevents errors and omissions in your field of work. This plan may include having written contracts, discussing potential enhancements and recommendations with your clients, and asking them to sign waivers when they opt out of insurance coverage.
Participate in our E&O Program for a discounted price. Get Your E&O now.
Key Takeaways In This Article
- E&O Insurance is important to your career and business. Don't wait.
- We strongly suggest that you purchase your own comprehensive E&O coverage. Ask us about our E&O program.
- No one plans for a claim to actually happen against errors and omissions, they just do.
Over to You
We'd love to hear your thoughts in the comments below on:
- Have you or someone you know experienced errors and omissions claims against them, what was the story?
- If you believe in selling insurance to protect others, don't you believe you should protect yourself, first?
- Do you currently have E&O coverage?
If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!
