While every industry professional strives to avoid mistakes in their business practices, mistakes can and do happen every day. Some mistakes are minor and can be fixed, while others can lead to the loss of money for your clients, your suppliers, or other individuals who are links in your chain of business acquaintances. If such errors or omissions in your business practices lead to the loss of a large sum of money for another individual, you may find yourself facing an errors and omissions (E&O) lawsuit. Working with insurance agents E&O, you can better prepare to defend your business should an E&O claim be made against you. Understanding the following types of E&O claims may also help you to avoid a lawsuit in the first place.
Negligence and Inadequate Work
One of the first and most common types of E&O claims is negligence. When a professional in any industry displays a carelessness or disregard for their expected job duties, a client may feel that they were put in a bad situation due to the lack of regard by you or your employee. Avoid E&O lawsuits by taking pride in your work and offering each client careful attention to detail.
Along with negligence, some clients or associates may feel that your or your employees offered inadequate work on their behalf. Whatever their claims or concerns, being prepared starts by talking with insurance agents E&O to build a customized insurance plan to protect your business.
insurance agent professional liability
Many independent insurance agents start offices on a shoestring budget. They look to cut costs in every area, including insurance. They may wonder about the necessity of coverage to protect against insurance agent professional liability. Instead of purchasing insurance, they may decide to save the money by carefully checking their work product and ensuring it meets the highest standards possible. However, this strategy may leave agents vulnerable to significant risk.
Lawsuits Are Not Directly Related to Quality
Many agents issue standard policies on boilerplates provided by their providers. In many ways, they reason, there is not much occasion for error. However, any judgments on the part of the agent are candidates for a challenge by the client. These include:
- The level of the insurance
- The amount of the deductible
- Any decision point in the policy
Often, top-notch agents are sued by clients even though the work product is essentially perfect. At that point, the agent must deal with the court costs of the suit, even if it ends in his or her favor. The time the agent spends in court can also account for a significant loss of earnings. This means that every insurance agent has exposure to E&O lawsuits.
Often, an E&O claim occurs when a client files an insurance claim and comes up short. Many clients in this situation attempt to cut their losses by making a malpractice claim against the agent. For this reason, E&O coverage is essential to protect against insurance agent professional liability.