As a financial professional, you know you need errors and omissions insurance. The challenge is finding high-quality coverage that doesn’t break the bank. Here are five techniques that will help protect your business, while saving you money.
1. Take advantage of your clean record.
If you do business responsibly, chances are you’ve never been sued or have other black marks on your record. If so, check with EOforLess. It provides low-cost E&O insurance for advisors who can prove they do business responsibly.
2. Leverage your relationships with third-party entities.
Many field marketing organizations (FMOs) and member associations have deals with E&O insurers that can save you money. But be careful that their deals don’t rob you of your independence. For example, some FMOs make your E&O coverage contingent on staying with them or on putting a certain level of business through them.
3. Comparison shop.
Premiums are all over the lot, depending on the insurance company. So make sure to get quotes from several carriers. Also, keep in mind that E&O insurance companies don’t typically put advisors through an underwriting process to assess risk. They charge a “one-size-fits all” premium regardless of risk status. So try to find a carrier that will reward your low-risk status with lower premiums.
4. Buy the right coverage.
The key here is to customize your E&O insurance for your precise business activities. Don’t pay more to cover products or services you never provide. But don’t skimp on protection, either. If your policy is too “lean,” you may end up unprotected against a serious errors and omissions insurance claim.
5. Watch out for non-regulated E&O providers.
Some entities provide bargain-basement E&O insurance through so-called “risk-sharing plans.” No state insurance departments check their books or require them to hold minimum reserves. If such a plan fails, you will be left holding the bag. Instead, try to do business with a true insurance company that rewards low-risk advisors with a lower premium.
So don’t delay. Follow these tips now to find affordable, high-quality errors and omissions insurance. Your business—and budget—will thank you for it.
Visit our E&O Headquarters for more informational resources.
