The Unexpected

If you’ve been in the business for a while, what you do comes naturally, right? So you probably don’t dwell on the complexities of your job and the countless opportunities you have to make a mistake. But bear with us for a minute while we remind you.

Think about the range of tasks you do in an average day. You meet with prospects for the first time to assess their needs. You put together illustrations to show prospects how their products work. You present recommended solutions and answer client questions about it. You deliver policies and review key provisions for clients. You handle service requests from insureds and their families. You meet with clients periodically to review needs and discuss new opportunities. And when investment markets are volatile, you speak with clients on the phone to allay their fears and concerns.

Now, consider for a moment how complex all those tasks are. They involve product design issues, regulatory concerns, tax questions, and of course, the mysteries of human nature, which are different for every person you deal with.

To make things even more complicated, think about how hard it is to communicate with another human being, even when the subject matter is relatively simple. When the subject matter is difficult, the ability of two human beings to effectively share ideas without garbling their  messages is limited, at best.

Takeaway? That it’s a miracle insurance agents and advisors communicate as well as they do and that more financial advisors aren’t sued for mistakes arising out of the complexities and disconnects that occur when people talk about financial matters.

Supporting this notion is the breathtaking range of errors that often lead to E&O insurance claims. According to one major E&O insurer, the most common reasons for E&O life/health insurance claims, in order of frequency, are:

  • Misrepresentation (25 percent)
  • Failure to provide (11 percent)
  • Failure to explain (11 percent)
  • Office error (11 percent)
  • Policy change (9 percent)
  • Business management (9 percent)
  • Suitability (6 percent)
  • Premium error (6 percent)
  • Tax loss (4 percent)
  • Due diligence (2 percent)
  • Beneficiary (2 percent)
  • Other (2 percent)

These and other mistakes produce serious financial consequences, according to the same insurer, with the average cost for a disability-insurance claim being roughly $149,000; for a pension product, $71,068; and for an individual life product, $40,000.

Bottom line? That given the complexity of your job, it’s incredibly easy to make a mistake, which can lead to highly damaging legal settlements. All it takes is one mistake to turn a client against you and ensnare you in a nasty legal proceeding.  And if the case doesn’t go your way, it’s all too easy to have everything you’ve worked so hard to achieve go up in smoke.

Don’t let this happen to you. Do business defensively and take steps to protect yourself against nasty client lawsuits by purchasing comprehensive, affordable E&O insurance from And if you’re already insured, keep your policy in force to avoid coverage gaps that can have equally damaging consequences.

Never miss a due date with our FREE renewal reminder. We’ll send you a renewal reminder when it’s time to renew your policy. Sign up now!

Insurance and financial professionals are typically required to buy errors and omissions insurance.  So the question isn’t whether they need to buy errors and omissions insurance, but rather where to buy it from. The answer for many advisors today is, which offers quality coverage, an easy purchase process, and extra benefits that promote their firms, while saving money. Let’s break this down further.

First, there’s no point in buying errors and omissions insurance if you don’t purchase quality coverage. What’s “quality”? A policy that covers the specific risks your business faces and provides sufficient limits so you don’t “run out of” protection when you need it most. And your E&O insurance should come from an A rated insurer with a low chance of becoming insolvent. hits these targets squarely. It provides four E&O coverage options based on your license type: life and health insurance, property & casualty insurance, registered investment advisor representative, and real estate brokers/owner. And its limits of liability are robust—$1 million per claim and potentially up to $3 million in aggregate (multiple-claim) protection, depending on your license type. Finally, EOforLess has partnered with top-rated insurers, including CNA (for life/health and RIA agents), Everest Re Group (for property & casualty agents), and Liberty Surplus Insurance Corporation (for real estate brokers/owners). In addition to the high quality coverage offered through, all life & health coverage options underwritten by CNA have a zero-retention (deductible) benefit when claims are filed.

Second, the ease of buying at is second to none. With our user friendly website, financial professionals can easily set up an account, apply for protection, and buy their insurance in just a few minutes. That’s because all purchase options are clearly displayed and the decision process and data input forms are logical and simple to navigate. In fact, with our unique “click-and-bind” process, you simply select the right level of protection for your needs, set up your account and payment method, answer a short list of underwriting questions, and then click “buy” for instant binding. You can click, bind and print your E&O certificate in just a few minutes. It couldn’t be easier!

Third, buying errors and omissions insurance from has an added benefit. Included in the purchase price is membership in the National Ethics Association, a professional affinity group dedicated to promoting ethical business practices in the financial-services industry. Your NEA membership provides ancillary benefits such as:

  • Credibility icons that accelerate the sales process—As an NEA member, you have full rights to use the “ Registered Member” logo on your website and/or marketing materials. This helps to build consumer trust and remove friction in the sales process.
  • An online membership profile—This helps to “brand” you as an ethical financial professional, while providing a back link to your firm’s website, which strengthens its ranking on Internet search engines.
  • The ability to demonstrate your commitment to full transparency—All NEA members can apply for a Certified Background Check. Members who pass our rigorous background screens qualify to use the highly regarded “Certified Background Check” icon on their websites.
  • Access to ethics and compliance learning opportunities—NEA maintains an extensive library of ethics and compliance content. This helps members stay on top of emerging compliance issues and to remain committed to the highest standards of ethical business conduct.
  • Free unlimited insurance continuing-education courses—Through its relationship with Success CE, NEA helps its members remain at the forefront of industry knowledge and effective business practices, while keeping their professional licenses in force.
  • Access to over 100,000 product discounts in 2,300 U.S. cities—NEA helps its members save big on the products and services they buy for their business or home, including from Staples, Sprint, Dell, Verizon, and Costco.

In summary, for all of the above reasons and benefits, thousands of financial professionals today have opted to buy their errors and omissions insurance online at Why? Because they like the protection, the convenience, and the savings of buying through EOforLess and the member benefits available from National Ethics Association. Won’t you consider joining them?

How Errors and Omissions Insurance Factors into Online Trust

Most insurance agents today understand how errors and omissions insurance lowers their risks of doing business. But they may not see how errors and omissions insurance builds online trust. Stick with us while we explain why.

For starters, it’s important to recognize that online trust is the foundation of nearly all business relationships. Whether you transact sales online or not, most of your prospects will head first to your website to check out your background and offerings. If they like what they see, they’re more likely to agree to a meeting . . . and to buy. If they don’t, they will either refuse a meeting or be a hard sell later. Thus, your website factors heavily in establishing the trust you need to grow your business.

In fact, the Pew Research Center’s Internet & American Life Project has shown just how much consumers rely on websites to make sound purchase decisions. According to a 2010 Pew study, 58 percent of Americans have done research online before purchasing a product or service. And on an average day, the study found that 21 percent of adults researched vendors online, compared with 9 percent in 2004. These numbers are likely to be even higher today.

Trust Formula: Authority, Credibility, and Responsibility

What are prospects looking for when they come to your website? We call it the A-C-R formula, which stands for Authority, Credibility, and Responsibility.

First, they want to see that you have the skills and knowledge—the authority—to help them solve their financial problems. Accordingly, your website’s content must convince them you know your stuff and can deliver the goods. The more your site showcases your credentials and expertise, the more powerfully it will establish your authority. Here’s how to speed this process:

  • Make sure your website has a detailed “About Us” page. And don’t just use the same boilerplate everyone else does. Talk about your experience and professional competencies, your core business practices, your education and designations, and the types of clients you serve. The more detailed and personal you can make this discussion, the better.
  • Don’t just claim authority; prove it! Fill your site with as many proof statements as you can: specific insurance/financial strategies you’ve used with clients, testimonials from satisfied customers (if your license allows it), blog articles you’ve written that demonstrate your insights about today’s financial markets and “hot-button” client concerns.
  • If you’ve written articles for industry trade journals, given speeches, or appeared on television or radio, list those experiences on your website. The goal: to demonstrate you are an industry thought leader—i.e., someone who sets the pace for your competitors.

Consumers Look for Credibility

Second, prospects look for credibility—i.e., to see that you are a person of integrity and believability. Since credibility derives from everything you say and do, especially in front of your customers, always operate from a place of total truth and client alignment Here are a couple things that should help:

  • Pay extra for your own Internet domain name. This means your website and e-mail address will display your company name, rather than an Internet service such as Yahoo or Google.
  • When conducting initial and presentation interviews, don’t use fear or hype to arouse attention or motivate purchase. These tactics tend to spark doubt and create less persistent business than do legitimate fact-finding and a thorough discussion of features, benefits, and objections.
  • Also, when speaking about yourself, don’t exaggerate your education, credentials, or past jobs. Stretching the truth is a sure credibility killer, perhaps not right away but always in the end.
  • Follow the Stanford Guidelines for Web Credibility. To further enhance your believability, adhere to the research-based Stanford University model. Two of its recommendations: make it easy for prospects to verify the claims on your site, while making your business tangible by including office and staff photos. For Stanford’s full list of credibility recommendations, go here.
  • Finally, align yourself with third-party organizations that rate firms based on performance or customer satisfaction. Examples are the Better Business Bureau and MacAfee SECURE. The National Ethics Association, sponsor of, gives its members rights to use its “ Registered Member” badge, as well as its “Certified Background Check” logo for those who pass a comprehensive screen. By posting respected credibility badges on your website, you convey not only your commitment to ethical business practices, but also your standing with respected third-party organizations.

Responsibility Is Key

Third and finally, convey on your website that you are a responsible insurance and financial professional—that your business practices are sound—and that you stand behind your work. Here are three tips to get you started:

  • Showcase all third parties on your site that are key value creators and/or protectors—your FMO, broker-dealers, and RIAs; your product providers; your clearing and third-party custodian firms; your Internet security consultant, etc. In short, you want to show that you have a team of outside experts dedicated to keeping your clients’ personal data and money safe.
  • Review your business practices—explain that your recommendations derive from rigorous fact-finding, that you perform comprehensive due diligence on products offered, that your insurance and investment strategies are mainstream and reputable, and that your operations and procedures are well designed and executed.
  • Finally, explain that you practice what you preach in terms of protecting your own business against unexpected losses. Assure clients you have backstops in place should one of your product providers fail, a client gets hurt while visiting your office, or you make a mistake—or fail to do something—that financially harms them. Then explain all of the protections that apply: SIPC coverage for investments, state insurance guarantee funds for life insurance and annuities, commercial liability insurance for your firm, and errors and omissions insurance for your professional duties.

In summary, if you want to accelerate your company’s future growth, fully leverage your website for trust building. Make sure it conveys the points covered in this article. And if you haven’t done so yet, take advantage of your National Ethics Association membership. This will allow you to leverage its two trust badges and benefit from its extensive ethics and compliance content library.

Following the Authority, Credibility, and Trust (ACR) formula will not only send the right message to your prospects and clients, it will solidify your position as a market leader. Good luck!

How to Build Your Business with and

Most insurance and financial professionals today have access to the same products. They position themselves roughly the same way. Their customer service is comparable. And they’ve largely earned the same industry certifications, so their knowledge bases are similar. How can an agent or advisor stand out? By building stronger customer relationships based on trust. The good news: not all agents are equipped to do this. If you can, you’ll have a leg up on your competitors.

Where does trust come from? Simply put, it comes from:

  • What you say and do,
  • What your clients say and do,
  • What prospects and customers see when they visit your website or read your marketing materials, and
  • How much credibility you project into the marketplace.

Let’s go over each of these elements. The starting point for creating trust: words. You must always strive to speak from a place of deep authority. Know what you’re talking about, and project that expertise in every consumer interaction, whether personal or via your website. Authority comes from years of study and experience and is conveyed through facts, not hype. If you know your craft, you don’t have to exaggerate what you bring to the table. You just have to speak the truth.

The quality and credibility of your words must emerge in every phase of the sales cycle. When you call for appointments, your words should be totally above board, never misrepresenting what you do or what you sell in order to get an appointment. When you score an interview, you should never sell through fear or misrepresentation. And when you present a solution, you should strive to clearly and accurately explain all product features and benefits. If you don’t, you will not only erode trust, but also plant the seed of future client disputes and E&O insurance claims.

Your actions are also pivotal. Everything you do speaks volumes about your trustworthiness. Whether you follow up with the information you promised during an interview. Whether you return phone calls promptly. Whether you meet the deadlines you committed to for completing a transaction. Whenever you break a promise, you create a trust deficit. When that mistrust grows, every aspect of moving your business forward becomes harder. If your deficit grows too large, you will soon be treading water . . . and ultimately sink.

What clients say is also crucial. Because let’s face it. If you drop the ball with a client, that person will complain about it to many others, both face-to-face and online. But when you impress a client as a professional with integrity and unquestionable competence, he or she will talk you up to their friends, post favorable reviews on Yelp and Google, and perhaps even agree to write a testimonial for you on your website (assuming you’re not an investment advisor).

Client actions come into play when they refer you to a friend or recommend you to a professional group to which they belong. When clients act positively on your behalf, you know you have won the trust battle.

The final credibility element has to do with images or optics. When a prospect visits your website, does he see an attractive, professional page design that projects strength, reliability, and conservatism? Will she see photos and videos that portray you and your team as highly impressive professionals? Will he notice your marketing brochure is well designed and informative? And will she take note of your affiliations with highly credible business groups, especially your financial-services designations and trade association memberships?

Also important is belonging to organizations that can highlight your commitment to ethics and compliance. Two important ones are the Better Business Bureau (BBB) and the National Ethics Association (NEA). Financial professionals belong to the BBB to show they’re consumer friendly and to resolve complaints (using the BBB’s complaint-resolution process).

NEA differs from the BBB since it advocates for ethics in the financial-services industry, educates producers about ethical and compliant business practices, and provides tools for advisors to showcase their integrity. By joining NEA, agents and advisors can:

  • Stamp their business with an ethics seal.
  • Enhance their credibility by passing a Certified Background Check.
  • Be listed at as a Registered Member.
  • Advocate for transparency by providing access to industry regulators directly on your profile.

The items above are powerful trust icons that eliminate friction in the sales process, speeding your prospects’ journey to the close. But there’s another trust-building feature of NEA membership that producers should consider: the ability to buy NEA-sponsored E&O insurance from its affiliate, Think about it. When you protect your business with E&O insurance, you are basically telling the world you are a responsible professional—that you stand behind your words and deeds 100 percent. Consequently, in the unlikely event something goes wrong and a client suffers a financial loss, you will have the financial means to make things right.

In summary, if you’re looking to build your business on a foundation of trust, consider doing the following:

  • Be careful about what you say and do,
  • Give your clients multiple reasons to say positive things about you,
  • Make sure your marketing vehicles are confidence builders, and
  • Show that you’re responsible by purchasing E&O insurance.

And if you can save money and time by doing the last item at, all the better. Good luck!