Quality of E&O Insurance Is Key

Buying E&O for insurance agents online has become common of late. But just because it’s possible doesn’t mean you’re assured of getting quality protection. You still need to do your homework. This involves understanding your needs and checking out potential providers before making a decision.

We can’t stress enough the importance of evaluating your needs before purchasing E&O for insurance agents. This involves asking some tough questions about your customer base:

  • Do they accept your recommendations or frequently second-guess you?
  • Do they cut you slack in the rare event you make a mistake or hold grudges?
  • Have they been litigious in the past?
  • Do a substantial number have cognitive impairments due to illness or age?
  • Have they been clients just briefly or for a long time?
  • How affluent are they? Would losing a lawsuit involving your largest client account wipe you out financially?

Considering these questions will help you select adequate coverage limits in order to shield your assets from legal attacks. And if you’re not sure about the right amount, always err on the high side. That’s because the added cost of purchasing more insurance will pale compared to losing a big hunk of your assets due to an adverse court judgment.

Once you know how much insurance you need, turn your attention to selecting an E&O insurer that will serve you capably. To this end, consider:

  • the firm’s track record in the E&O insurance market,
  • its reputation on the street, and
  • its financial solvency grades from the major rating agencies.

No Deductible E&O Insurance Is Essential

Once you know how much E&O insurance you need and from whom you’d like to purchase it, request a specimen policy. Read this document as if your financial future depends on it. Pay special attention to the insuring clause and exclusion list to make sure the protection will be there when you need it most.

No deductible E&O insurance is important, as well. As with many other forms of insurance, E&O policies typically require insureds to absorb a certain level of financial loss before their coverage kicks in. In other words, if they get sued, they will pay a portion of their legal fees until they satisfy their deductible. However, at EOforLess, life and health insurance agents benefit from our no-deductible feature. Because our strategy of doing business only with low-risk financial advisors has produced a customer pool with favorable claims experience, our insurer can eliminate deductibles for all. So again, always look for no-deductible E&O insurance as you research your purchase.

The experience and strength of your E&O insurer, appropriate coverage limits, and no-deductible E&O insurance —all combine to produce affordable, high-quality protection. Is your current E&O policy meeting this standard?

Print Your Own E&O Insurance Certificate

Quality is just one piece of our value proposition. Convenience is the other part. When you buy E&O insurance at EOforLess.com, you can literally shop for and purchase the protection you need in minutes. Compare this to the old method of buying through professional liability brokers and you’ll see why thousands of financial professionals today prefer the online alternative.

Take a look at our pain-free shopping experience:

  1. Visit EOforLess.com.
  2. Decide on the type E&O insurance you need—for life agents, P&C agents, RIAs, or Real Estate Brokers—and then click “see plans” to select the appropriate policy form.
  3. Determine an adequate coverage limit. Life/health agents who sell only those plans can choose base coverage. But if you also sell annuities, variable life/annuities, or mutual funds, upgrade to a higher protection level. Then click “buy now” to begin the payment process or “view coverage details” to read the policy provisions.
  4. Review the list of policy features and benefits, along with further information. We also highly recommend you download and carefully read the specimen policy.
  5. After scanning the details, click “buy now” to finalize your purchase. Then fill out the form to establish your account and determine your payment and billing-frequency options. After you finish entering the information, click “Pay & Proceed To Bind Your E&O”.
  6. If you are able to answer “no” to all the underwriting questions, click “pay” to bind your coverage.
  7. Ready to print E&O certificate? Just hit “print” to output your E&O insurance certificate.

The last step reinforces the power of buying E&O insurance online. In the “old days,” to get an E&O insurance certificate, you needed to contact an E&O insurance broker, go through a lengthy sales process, and then wait days or weeks for insurers to respond with premium quotes. Then you’d have to meet with or speak to the broker again to select the best policy and fill out a paper application. Finally, after much waiting, you would receive your E&O insurance certificate.

If you needed that document right away to pursue a sales opportunity, you’d be out of luck. The process simply took too long. However, if you had purchased your E&O insurance from EOforLess, you would have been able to print an E&O certificate in 5 minutes or less. It’s easy to see why thousands of insurance agents and financial advisors prefer to buy their E&O insurance at EOforLess.com. It’s simply a quicker, better way to buy.

In summary, if you’re shopping for E&O insurance for the first time—or switching to a new insurer—visit EOforLess.com now. We help busy insurance agents and financial advisors save time, money, and aggravation, while protecting their finances against catastrophic loss. What’s not to like?

The Age of Internet E&O Insurance Shopping

Today, consumers expect to be able to buy everything and anything on the Web: books, music, movies, clothes, shoes, and even cars. But it wasn’t too long ago that buying a product online was either impossible or clunky. That’s not surprising, since selling on the Web—also known as e-commerce—only began in 1994. That’s when several college grads set up a firm called NetMarket in Nashua, New Hampshire. Their first sale—on August 11, 1994—was for Sting’s music CD “Ten Summoner’s Tales.” The price was $12.48, plus shipping, and data encryption protected the buyer’s personal data.

And so it began. Soon, Amazon set up a website to sell books. Then as more consumers became comfortable using their credit cards online, sites that sold flowers, chocolates, wine, and many other products became ubiquitous. Within a few short years, Amazon expanded to become the Web’s first “superstore,” and online commerce became the preferred method of buying just about anything.

But one industry lagged behind: insurance. True to their conservative roots, insurance companies were uncomfortable selling on the Internet. They wanted to protect not only their current business models, but also their policyholders against unknown threats.  Web-enabled commerce was simply too new, too risky, and too faddish for them to jump in boldly. They would let other industries go first to make sure the “waters” were safe.

Years passed. Finally, in the first decade of the new millennium, insurers became more comfortable with the technology. What’s more, with buyer preferences changing, insurers were forced to quicken their pace of innovation, launching websites to help consumers shop for life, auto, and home insurance . . . the most common forms of insurance sold at the time.

Despite these initial efforts, insurance shopping sites often failed to provide a seamless customer experience. Insurers used their websites to collect consumer data for quoting, but still directed buyers to a live insurance agent to close the deal. That’s where Internet insurance sales remained until relatively recently.

Today, a growing number of insurers have begun to actually issue insurance online, not just provide quotes and referrals to agents. But this convenience is available mainly for simple types of coverage that require limited or no underwriting—sadly, not for E&O insurance for life agents.

The Click & Bind E&O Revolution

If insurers lagged behind other online innovators, E & O insurers literally brought up the rear. Here’s why. Professional liability insurance is a complicated coverage.  There are different policy designs for various business types. And potentially large settlements meant E&O insurers resisted simplified underwriting. Plus, they continued to work through traditional brokers who used complicated paper applications, sent the forms to several insurance companies, and waited days or weeks to receive quotes. Life insurance agents had to run a gauntlet to buy E&O insurance. Once the proposals arrived, the financial professional would compare them and select and pay for the best one.  Then came more waiting before the new policy arrived.

It took an entrepreneurial and nimble innovator to introduce a new Web-powered model for E&O insurance for life agents. In 2008, the National Ethics Association, an association of ethics-minded financial professionals, launched EOforLess.com, a shopping portal that allowed life and health insurance agents to purchase professional liability insurance in 10 minutes or less. We coined the phrase “click & bind insurance” to show just how easy it is to find and buy the E&O protection you need on our site.

Thanks to our platform’s user-friendly design, you can select an appropriate form of E & O insurance (now for multiple license types, not just for life/health), set up an account, complete an application, pay for the coverage, and then print out proof of insurance—within minutes. Consider the advantages such speed provides:

  • If you encounter a sales opportunity for which you need access to a specialized insurance product and carrier and if that insurer has specific E&O requirements, you can quickly find coverage and print out an insurance certificate in minutes.
  • If you’re new to the industry and don’t have the time to vet multiple E&O insurance brokers to find one you can trust, you can use EOforLess.com to do your shopping for you . . . again in just a few minutes.
  • If you have E & O insurance, but you’re unhappy with your current coverage or premium, you can find a replacement in short order, potentially saving money and upgrading your protection with little time or effort.
  • If you lapsed your E&O insurance by mistake, you can quickly get re-covered to minimize your liability using our easy buying process.

Why hassle with comparing brokers and policies the old fashioned way, when you can do it in minutes using a convenient site such as EOforLess.com

In short, the click & bind revolution has transformed the insurance industry, especially the complex E&O segment. Using the latest in user-experience design and efficient and secure e-commerce technology, EOforLess provides the utmost in choice, convenience, and security to any financial professional needing E&O insurance fast.

So the next time you buy, well, anything from Amazon, remember that the same level of convenience and safety is also available from EOforLess.com, the industry’s click & bind E&O insurance pioneer. Come visit us soon!

Building Trust in P&C Insurance

P&C insurance agencies are everywhere across America. According to the Accenture Independent Agency Survey, there are 39,000 independent P&C insurance agencies doing business today, with thousands more operating under a single-insurer brand. Agencies typically produce $5 to $6 million in annual premiums, posting commissions of about $1 million and employing seven to 12 staff. But here’s the interesting thing: with so much competition and talented people out there, the industry has become highly commoditized. Most P&C insurance agencies sell similar products for roughly comparable premiums. And most deliver customer-service quality within a range of acceptable results.

Since P&C insurance has largely become a commodity, how can agencies stand out? One way is to have a strong, consistent brand that communicates service excellence. Another is to be exceptional at building and sustaining client relationships based on trust. Trust building may well be the more powerful approach, because if your customers have faith in you, they’ll cut you some slack if a service transaction goes awry. Of course, you don’t want to make a habit of making mistakes, but trust can “immunize” you against the occasional glitch that would otherwise cause problems.

Trust Building for Property and Casualty Agents

So how to develop consumer trust? Here are four basic strategies:

  • First, show that you take responsibility for your actions. How? By setting up your agency as a legitimate business with a robust accounting system and an insurance backstop in case something goes wrong. You want to show prospects and insureds that you know how to process their transactions, are a trustworthy steward of their money, and hold yourself accountable through insurance in the event they  get hurt on your premises (commercial insurance) or suffer a financial loss due to your negligence or oversight (professional liability insurance). Now, you may wish to avoid a detailed discussion of your professional liability coverage limits, since you don’t want to plant seeds now that germinate lawsuits later. But do mention you are a strong believer in the products you sell, including commercial general liability insurance and professional liability for P&C agents or E&O insurance. And that extends to purchasing these essential protections for your own business.
  • Second, work hard during the sales process to create trust. This starts by making sure your sales literature and website are 100 percent accurate and that your client-facing statements are fully compliant and true. Once prospects become insureds, strive to fulfill every promise you make and exceed their expectations for service excellence—100 percent of the time!
  • Third, in your customer relationships always align your interests with theirs. Although you may not legally be a fiduciary, do your best to balance their interests with yours and those of your insurance markets. It’s especially important to be client-focused, not self-focused. This involves working hard to understand your prospects’ fears, concerns, goals, and constraints and placing their needs at the center of your attention and problem-solving efforts.
  • Fourth and finally, go the extra mile in becoming fully transparent to your prospects and clients. Depending on your license type, you may or may not be required to make legally mandated disclosures during sales interactions. But regardless of compliance requirements, try to give prospects as much information as possible about who you are, how you do business, and what you stand for from an ethical perspective.

To this end, many P&C agents explain how prospects can check them out prior to doing business. Many P&C agencies belong to the Better Business Bureau (BBB) and share their ratings with customers. They also encourage prospects to contact their state insurance commissioners to verify their insurance license and disciplinary status. Sharing customer testimonials, either with an online site such as Yelp.com or in printed form, can be a great way to defuse concern about your track record.

EOforLess AND National Ethics Association: A Winning Trust-Building Team

As important as trust building is to a P&C agency’s success, we understand it can be difficult to focus on when time is limited. This is why doing business with EOforLess and its sponsor, the National Ethics Association, makes so much sense.

First, you can purchase high quality, yet affordable, professional liability insurance in 10 minutes or less at EOforLess.com. Buying E&O insurance on our user-friendly site also enrolls you in the National Ethics Association, a group of ethics-minded insurance and financial professionals. Membership benefits include marketing tools that speed your prospects’ journey to trust, including:

  • Credibility icons for your website and marketing materials – Use the ethics.net Registered Member logo to show your customers what you stand for.
  • Search-friendly online profile – Point your customers to your ethics.net profile and enhance your website’s online marketing & search engine optimization (SEO).
  • Enhanced transparency – Our optional Certified Background Check shows consumers you have passed a rigorous criminal and civil background check, which instantly reduces consumer doubt.
  • Access to our ethics.net content library – Our extensive online library helps you acquire and promote ethical business practices.
  • Access to free P&C insurance continuing-education courses – through our relationship with Success CE, we help you sharpen your skills and keep your insurance license in force.

In short, with EOforLess and the National Ethics Association, you can not only protect your business, but also enhance consumer trust in one effective and convenient step. That’s a terrific combination and a great way to differentiate yourself from thousands of competitors in a commodity industry.

Don’t Let a Large E&O Judgment Kill Your Business

Most small financial-services businesses operate on slim margins. They lack a surplus of commissions, fees, and other income over their monthly expenses. What’s more, firms often have limited assets to convert into cash when emergencies arise.

Since they essentially operate on a high wire with no financial safety net, they are vulnerable to unexpected events, including demands from aggrieved clients. Such events, called errors-and-omissions claims, occur when a customer believes you either made a professional mistake or failed to deliver a promised service, which cost them money. The result of losing such a claim—a large settlement or legal judgment—can be severe.

Case in point: According to the National Center for State Courts, the average small-business E&O insurance judgment totals over $140,000, not including legal fees. If your company faced expenses this large, what would you do?

  • First, you could try to tap your cash accounts. But how many firms have that much ready cash or available cash equivalents?
  • Second, you could attempt to convert tangible assets into cash. But most financial-services practices typically don’t have assets other than their good name and future anticipated revenue in the form of commissions and fees. Quickly transforming these assets into ready cash can be difficult. If they own their building or the land it sits on, they could put those assets up for sale. But that could take weeks or even months, and might generate lower proceeds than expected based on current market conditions.

Bottom line, if you don’t have the cash and can’t liquidate assets, how would you pay for a large E&O settlement or legal judgment? You can’t! You’d declare bankruptcy—and try to get on with your life.

But even under that scenario, an E&O dispute can haunt you for decades. You might find it difficult to borrow money to restart your business. Or you might have trouble finding a job in a new industry.

Let’s now paint a happier scenario. Imagine you have an E&O insurance policy to pay for your attorney and settlement/judgment costs. What a difference! Now you can avoid bankruptcy and continue in your business as before. Sure, you might carry scars from the experience. But you’d have avoided bankruptcy. Which option is more appealing? The latter, of course. That’s because E&O insurance can spell the difference between bankruptcy and longevity.

A Full Policy of E&O Insurance Is Your Best Defense

A full policy of E&O insurance is your best defense against the scenario we just described.

It protects your financial-services business in three ways.

  • First, it insulates you against the financial impact of making a professional mistake.
  • Second, it protects you in the event you fail to deliver on your contracted promises.
  • Third, it covers you should you fail to perform your duties up to generally accepted industry standards.

Should any of the above events occur, your E&O insurance policy will kick in, paying for your attorney fees, court costs, and settlements or judgments, up to your policy limit.

And don’t forget. Typical E&O insurance policies include duty-to-defend language. This means the insurance company is on the hook not only for paying your legal fees, but also for providing you with an attorney. Not having to vet and retain your own lawyer is a huge plus when you’re in the middle of a nasty client fight.

E&O Insurance Can Keep Your Business Out of Court

Most people focus on the ability of E&O insurance policies to protect their assets should they lose in court. But an equally powerful benefit is their ability to provide cash to settle client disputes out of court.

With E&O insurance coverage, your insurer will provide you with an attorney to immediately manage communications with the plaintiff and that person’s lawyer. The goal: to reach a mutually agreeable settlement, which will prevent the delays, expense, and headaches of taking a case to court. It also allows a trained legal professional to handle negotiations rather than you, who might be unschooled in legal matters. Having your attorney negotiate for you will help both parties to agree on an optimal settlement amount—not too large, but not too little.

Now, consider what might happen if you didn’t have E&O insurance. The plaintiff might have been willing to accept a lower amount. But since you lacked the money to settle, the dispute might end up in court anyway, costing you more money in the long run—money you didn’t have.

Since E&O insurance can keep your business out of court, doesn’t it make sense to protect your future now with an affordable, comprehensive E&O policy? And if you’re looking to shop, apply, and pay for your E&O insurance in five minutes online, then consider visiting EOforLess.com today to take advantage of our user-friendly shopping portal. It’s easier and faster than buying from a traditional E&O insurance broker. Good luck!