E&O Insurance for P&C Agents

Professional liability insurance is a linchpin of most P&C agents’ product portfolios. You understand its importance for your business clients and work hard to assess risks and recommend appropriate E&O insurance solutions. What you might not fully appreciate is how important E&O insurance has become to your own businesses, largely due to sweeping changes in the P&C insurance marketplace.

How has the marketplace changed in recent years? According to an analysis conducted by the National Ethics Association, sponsor of EOforLess, five major industry shifts are changing how P&C agents operate, greatly expanding their business risks. The shifts include:

  1. The industry is witnessing the advent of new technology and increasing numbers of insurers selling direct to consumers. This is forcing agencies to adopt new business models.
  2. Agents are moving away from the role of “product peddler.”  They’re no longer focusing as much on the sale of commoditized personal-lines insurance products.
  3. Agents are also shifting to commercial-lines products. That’s where the profits are and where agencies can deliver added value to their customers and carrier partners.
  4. They’re also expanding their product portfolios with new coverage types such as cyber liability. This replaces vanishing margins from commoditized personal lines.
  5. Other traditional roles are disappearing, as well. These include doing field risk selection (carriers now do that through predictive modeling) and being the sole point of customer service (carriers are now using multiple technology-enabled service platforms).

“P&C agents work in a brave new world,” says Steven R. McCarty, Co-Chairman and Founder of both the National Ethics Association and EOforLess, which provides E&O insurance for P&C agents, as well as for other types of financial professionals. “Their risks of doing business have grown exponentially, while their ability to pay ever increasing premiums for E&O insurance has diminished. This puts many P&C agents in a bind.”

For one thing, McCarty says, P&C agents today are more likely to operate as trusted advisors than as mere “order takers.” They’re also adding more exposures and products to their offerings in order to respond to their clients’ evolving needs. At the same time, they are making more use of cloud technology, social media, and agency automation, while stepping up their involvement with commercial-lines products. Finally, many P&C agents today are operating in states that are imposing higher standards of care than in the past.

“All of this paints a picture of P&C agents facing ever greater risks, which may well spark E&O disputes,” McCarty warns. “At the same time, escalating E&O insurance premiums make it even tougher for them to secure the protection they need at a price they can afford.”

Fortunately, the E&O insurance industry has also evolved, providing E&O insurance for P&C agents looking for quality coverage at an affordable price. The hallmarks of this approach are as follows:

  • Affordable coverage provided through the efficiency of group insurance.
  • Streamlined E&O insurance underwriting based on asking a limited number of risk assessment questions.
  • The elimination of broker intermediaries and of the need to secure carrier quotes, which complicates the buying process and lengthens the amount of time between application and policy issue.
  • The ability to lower premiums for preferred-risk P&C agents, rather than having good risks subsidize poor risks.
  • Finally, allowing P&C agents to easily shop for and buy E&O insurance online.

EO insurance for insurance agentsEOforLess, the E&O insurance affiliate of the National Ethics Association, has been on the leading edge of this approach. It has developed an innovative platform called EOforLess.com that helps P&C agents buy E&O insurance online. Using this platform, P&C agents can quickly. . .

  • select a high-quality E&O insurance policy,
  • answer 10 risk-profiling questions,
  • insert their payment information, and
  • bind and print a policy in five minutes or less.

This frees up time for P&C agents to manage their businesses in an increasingly complex world.

Facts about E&O for Property & Casualty

While P&C agents may recommend professional liability or E&O insurance policies to their clients, many forget that their own risks of getting embroiled in an E&O lawsuit can be substantial. According to Swiss Re Corporate Solutions, P&C agents often make mistakes that  trigger client complaints and lawsuits, including the following:

  • Failing to secure appropriate coverage or recommend policies with adequate limits.
  • Failing to properly explain coverage exclusions or other policy limitations.
  • Dropping the ball in terms of properly determining the value of a client’s property.
  • Not mentioning co-insurance penalties that might apply should a claim occur.
  • Misrepresenting the actual features and benefits of an insurance policy.
  • Mishandling a client’s insurance claim, which results in the insurance company denying it.
  • Breaching their fiduciary duties to their clients.
  • Holding themselves out as risk-management experts rather than as insurance agents.

Fortunately, P&C agents with good E&O insurance have safeguards in place should they make these or other common mistakes. Their E&O policies typically provide two levels of benefits:

  • money to retain an attorney to defend them in court and
  • funds to make good on judgments and court costs should the agents lose.

“With benefits such as these, P&C agents can operate their businesses knowing they’re fully protected in the event an E&O claim arises,” says McCarty. “This means they can continue to focus on their business while the case is in process, instead of worrying about retaining a lawyer, covering legal fees, and paying for potentially hundreds of thousands or even millions of dollars in legal judgments. E&O insurance greatly minimizes all those worries.”

Property and Casualty Agents E&O Insurance

In today’s environment, E&O insurance for property and casualty agents should be affordable and easy to shop for. But it must also provide the right coverage features from a financially strong insurance company. Agents who buy E&O insurance from EOforLess.com know they will be well protected against growing market risks.

For example, the EOforLess policy provides a $1 million limit of liability for each claim and a $1 million limit for all claims under each Certificate of Insurance. The total policy aggregate for all claims under all Certificates of Insurance is $10 million.

In addition to offering P&C agents highly competitive rates, the EOforLess property and casualty agents E&O insurance provides additional features such as:

  • Prior acts coverage going back to the first continuous E&O policy issued to the agent.
  • An extended reporting period available if either insured or insurer cancels or non-renews.
  • Quick and easy online enrollment and renewal, with the Certificate of Insurance printable online upon satisfactory confirmation of premium payment.
  • Coverage extending to spouses, domestic partners, estates, heirs or legal representatives for claims arising out of their status as such.
  • Policy non-cancelable by insurer except for non-payment of premium.
  • Broad definition of claim includes written demands and civil proceedings for monetary damages.

What’s more, by virtue of buying E&O insurance from EOforLess.com, P&C agents also become members of the National Ethics Association, a professional trade group that helps members do business ethically and responsibly in complex times. Established in 2003, the Association helps its members grow their professional reputations while also enhancing their digital marketing efforts.

In addition to sponsoring E&O insurance for P&C agents, it also offers credibility icons to enhance lead generation; ethics and compliance content that help P&C agents stay out of trouble; and certified background checks that accelerate the consumer sales process for agents who qualify. What’s more, NEA membership gives members access to many different purchase discounts from companies such as Costco, Dell, Verizon, and Staples.

“P&C agents today face difficult challenges, not the least of which is managing increasingly complicated enterprises in an environment of mounting risk,” says Steven R. McCarty of NEA/EOforLess. “The last thing they need is to hassle with their E&O insurance provider or pay too much for it. With our E&O insurance for P&C agents, we’ve eliminated those worries for thousands of insurance professionals who can now focus on growing their businesses instead. That’s a true win/win for all concerned.”


Buy P&C Agent E&O Insurance


Click, Bind and Print E&O Insurance Online

Affordable E&O Insurance Online

Buying insurance is increasingly becoming an online affair. Just witness the growing number of financial professionals today who buy and print E&O insurance online. This should come as no surprise for two reasons.

  • First, insurance and financial advisors know just how risky their business can be. Clients with complaints, imagined or real, can bring suit, resulting in judgments costing tens or hundreds of thousands of dollars. Financial professionals understand that self-insuring against such risks can have devastating consequences for the sustainability of their firms and careers.
  • Second, professionals who sell insurance and financial products are busy people. Spending days or weeks shopping for E&O insurance is simply time they don’t have. Instead, thanks to technology advances, they are increasingly buying their E&O insurance online. Using websites such as EOforLess.com, they can quickly input their information, answer some risk-profiling questions, add their payment information, and within a few minutes print out a certificate of insurance. A buying process that used to take weeks now happens in minutes, freeing up time for other important business tasks.

What is E&O Insurance?

Errors-and-omissions insurance—or E&O insurance as it’s commonly called—is a type of professional liability insurance that protects business professionals in the event they do something wrong or fail to perform an important activity that financially harms a client. Policies provide two forms of protection: funds to hire an attorney to defend the insured in court and money to pay for legal judgments and court costs if the plaintiff (party suing) wins the case.

“Years ago, many business professionals didn’t think much about E&O insurance,” says Steven R. McCarty, Co-Chairman and Founder, EOforLess. “Today, they understand it’s a crucial form of insurance for virtually everyone who works in a sales or client-advisory capacity in a financial-services business.”

The risk of going uninsured is profound for such individuals, according to McCarty. The average cost of an insurance- or investment – related lawsuit can range from $40,000 to $150,000 or more. E&O insurance exists to mitigate these risks so financial professionals can continue to work in their firms and provide for their families. In many cases, without sufficient E&O insurance coverage, the only feasible outcome for those who lose court battles is to declare bankruptcy.

Who is EOforLess.com?

Given the importance of securing E&O insurance protection as quickly and conveniently as possible, the insurance industry has fostered innovation to increase access to E&O insurance online. A major player in this regard is EOforLess.com. Launched in 2008, it currently offers E&O insurance to financial professionals selling under various licenses, as well as to real estate broker/owners. It pioneered the direct sale of E&O insurance online—i.e., dispensing with the need to work with a broker—providing a unique shopping platform that makes buying E&O insurance faster and easier than ever before.

EOforLess.comRemoving brokers from the sales process is key to EOforLess.com’s strategy. Because financial professionals can select their desired E&O product, submit their information, and buy online, they can get insured in minutes rather than weeks. According to the Midwest Insurance Agency Alliance, many E&O insurance companies take up to two weeks to provide a premium quote after a broker submits an application. This antiquated process can literally cost big money if the delay short circuits a financial professional’s ability to receive an appointment to sell an insurance or investment provider’s products.

Another important aspect of EOforLess is its focus on low-risk insurance and financial advisors, which allows it to offer affordable premiums and, in some cases, eliminate deductibles (thresholds that must be met before the insurer begins providing benefits). If financial professionals can answer no to a limited number of risk-assessment questions, they can qualify for EOforLess.com’s competitively-priced coverage, which can be customized for each advisor’s specific needs.

“Providing convenient, affordable E&O Insurance has been in our DNA since Day 1, says EOforLess.com’s Steve McCarty, who is also Chairman and Co-Founder of the National Ethics Association, sponsor of EOforLess.com.

Who is the National Ethics Association?

The National Ethics Association is an association of business professionals committed to building their firms on a foundation of trust, transparency, and best practices. Formed in 2001, the Association provides an array of services that helps members grow their online reputations while enhancing their overall marketing efforts. Member benefits include credibility icons that build professional reputation; ethics and compliance content that improves business quality and prevents customer disputes; certified background checks that accelerate the consumer sales process; and a wide array of purchase discounts for companies such as Staples, Verizon, Costco, and Dell.
National Ethics Association
Another important benefit is the ability to purchase convenient and affordable E&O insurance through NEA affiliate, EOforLess.com. Through their membership in the National Ethics Association and their ability to pass EOforLess’s risk assessment, NEA members are eligible to purchase E&O insurance protection on a group basis through a variety of highly rated insurance underwriters such as CNA, Everest, and Liberty International Underwriters.

“By combining the efforts of the National Ethics Association, EOforLess, and our insurance partners, we’re helping thousands of financial professionals do business with less risk, expense, and worry than ever before,” NEA’s McCarty says. “This much is clear—it’s a great time for financial professionals to buy E&O insurance online.”


Learn More about How P&C Agents buy their E&O Insurance Onlinehttp://www.ibamag.com/infocus/e-o/how-pc-agents-buy-their-eando-insurance-today-21236.aspx

E&O Insurance for Life Agents

E&O insurance for life agents may not be the first thing on the minds of new agents entering the industry. Rather, it’s learning how to do good work for their clients, while soon earning a comfortable living for themselves.

In fact, selling life insurance has traditionally been one of the best careers for business entrepreneurs. There are no barriers to entry other than passing state licenses. New life agents get to define their own market and select their own products (in most cases). And they have the flexibility to make their own schedule and work in any setting they choose, either office- or home-based.

E&O insurance life agentsMost importantly, life agents can earn as much money as their time and talents allow, which explains why selling life insurance has for years been an attractive second career for teachers, laid-off executives, and recent graduates with degrees in business, finance, or marketing (although such degrees aren’t required).

However, new life agents soon realize that bringing in clients is only one side of the success equation. The other is protecting themselves against lawsuits should they make a mistake or neglect to do something important for their clients. They do this by purchasing errors-and-omissions insurance—E&O insurance, for short—which provides two types of benefits: money to pay an attorney to defend against a client lawsuit and funds to cover legal judgments should agents lose at trial.

“Years ago, many new agents didn’t give much thought to E&O insurance,” says Steven R. McCarty, Co-Chairman and Founder, National Ethics Association. “Today, they realize it’s one of the basic forms of insurance all new life agents need. Frankly, it’s shortsighted to buy insurance to protect against a client fall or theft of office equipment and not insure oneself against a client lawsuit potentially costing tens of thousands of dollars or more.”

E&O Claims Are Costly

The risk of going uninsured is particularly acute for new agents, according to McCarty, a former insurance producer who also heads EOforLess, an NEA program that has provided affordable life agent E&O insurance since 2008. The average cost of a life insurance-related E&O claim is roughly $40,000, according to one E&O insurance underwriter. For pension products, that increases to over $70,000 and for disability-insurance claims, to nearly $150,000. Were new agents to face such claims without adequate E&O insurance, it’s likely they would need to liquidate personal assets and, if that weren’t possible, to declare bankruptcy.

E&O Claims Impact Your Business

But paying for the judgment isn’t the only problem. New agents also have to pay for attorney fees, which can amount to thousands of dollars. Together, legal fees, judgments, and court costs can combine to create a financial catastrophe that can spell the end of a new life agent’s career.

And then there are the indirect costs of losing in court:

  • Harm to one’s professional reputation, fueled by online sharing.
  • Emotional stress of dealing with a contentious legal battle.
  • Anxiety or worry about what will happen to one’s business.
  • Opportunity cost of spending time with one’s attorney and E&O claims adjuster instead of working in the business.

E&O Insurance Provider

Given these challenges, new agents realize they need to find adequate E&O insurance protection as soon as possible after they enter the industry. Fortunately, EOforLess provides a convenient and affordable way for new life agents to get covered fast: EOforLess.com. This website allows life agents to purchase E&O insurance directly from an insurance company without having to get a quote from a broker. What’s more, the firm’s innovative online platform produces “click and bind” protection in minutes, with no hassles, hidden fees, or deductibles.

Most importantly, EOforLess does not impose income caps on new agents looking to purchase coverage. This compares with at least one E&O firm that prohibits agents from earning $100,000 or more in commissions during the year prior to their enrolling and requires them to hold onto the policy for a minimum of two years.

Next Steps for Life Agents

Bottom line: business professionals looking to enter a new career with maximum flexibility and strong earning potential should look no further than life insurance sales. But they should also take immediate steps to protect their finances against litigious clients by purchasing E&O insurance designed specifically for life agents, but with no income caps.

“Taking these steps before an E&O dispute occurs will be one of the wisest things new life agents can do in their initial months in the business,” says EOforLess’ Steve McCarty. “And if they can earn a lot of money with no worries about E&O insurance income caps or a minimum two-year holding period, all the better.”

Article Resources : http://www.lifehealthpro.com/2014/10/22/eo-in-the-know-a-financial-advisors-guide?page_all=1

E&O insurance is similar to other forms of insurance—for healthcare, property, automobiles—in one key respect. It typically requires consumers to absorb a pre-defined level of financial loss before it begins to pay an insurance benefit. Known as a deductible, this feature has been a common element of E&O insurance policies for financial professionals since time immemorial . . . until now.

That’s because the National Ethics Association, sponsor of EOforLess, has announced a no-deductible feature for its E&O coverage for life and health insurance agents. What this means is that agents embroiled in a legal dispute no longer have to pay for part of their legal fees up front. This frees up money to cover normal operating expenses, including office rent, employee salaries and benefits, agent retirement contributions, and more.

No Deductible E&O Insurance

No deductible E&O Insurance is a key enhancement to our E&O offerings for financial professionals,” says Steven R. McCarty, Co-Chairman and Founder, National Ethics Association. “With no deductibles, financial advisors facing legal action no longer have to worry about covering part of their legal fees. They simply can sit back and let their E&O insurer-appointed attorney defend them, while they focus on what they do best—selling and servicing their customers.”

Sponsored by the National Ethics Association, an organization of ethics-minded financial professionals, EOforLess entered the E&O marketplace in 2008, providing essential E&O insurance protection for life and health insurance agents. Rather than selling through brokers, EOforLess developed an advanced online buying platform. With this functionality, financial advisors no longer had to fill out long, confusing applications or wait hours or days to receive an insurance quote. EOforLess’ innovative e-commerce technology provided “click and bind” coverage in minutes, with no hassles or hidden fees. And this convenience came with substantial reductions in premiums over comparable plans.


E&O Insurance with No DeductibleSince then, EOforLess has further streamlined the purchase process, entered other markets, and added additional money-saving features such as free continuing-education (CE) courses for its insureds (except for real estate broker/owners).

In a world where consumers rarely receive something for nothing, how can life and health insurance agents avoid paying for deductibles? It all goes back to EOforLess’ original strategy of providing affordable, convenient E&O insurance for low-risk financial professionals. By effectively screening out high-risk financial advisors (think “good driver” auto insurance discounts), EOforLess has been able to develop a large customer pool with favorable claims experience. This allowed its insurance company to eliminate deductibles without hurting the financial dynamics of the group plan, while generating significant savings for EOforLess insureds.

Group Rates and Membership Benefits

Which raises another important difference with EOforLess. Because the coverage is group insurance, financial advisors not only save money due to their low-risk status, they also benefit financially from the inherent efficiencies of group insurance. And being members of a group—the National Ethics Association—makes them eligible for value-added benefits such as free CE courses, E&O loss-prevention content, purchasing discounts, and the use of online reputation badges for advisors who pass a comprehensive background check (requires additional fee).

McCarty says the best part about eliminating deductibles is that it also reduces stress for EOforLess customers. “Think about it,” he says. “Getting sued is a rough experience for most people. The last thing they want to worry about is coming up with money to pay for legal bills, while also working with their attorney to defend their business. By eliminating deductibles, we’re helping our customers get through a tough time with much less worry. This is what EOforLess is all about—less cost and less worry.”

Resources: https://en.wikipedia.org/wiki/Professional_liability_insurance#Errors_and_omissions_insurance