E&O Insurance for Life Insurance Agents

To protect your business against the risks you are most likely to face as a life insurance agent, consider the following coverages as part of your risk assessment strategy:

• Errors and Omissions Insurance (E&O): Also known as Professional Liability Insurance, this is a mandatory coverage designed to protects life insurance agents against claims from financial loss to a client because of a service you provided. This can include lawsuits for failing to deliver a service as promised due to accusations of negligence or misconduct. Suppose you issued a life insurance policy to a 50-year-old non-smoker. When the client checks on his coverage years later, you notice you accidentally inputted that the client was a smoker, significantly increasing the rate they’d been paying. Your client could sue you for your mistake, and in this case, E&O insurance may cover the legal fees and damages, including monetary judgments.

Additional coverages:

• Commercial General Liability Insurance (CGL): Commercial General Liability Insurance can protect life agents against common claims or lawsuits that allege third-party bodily injury (such as a slip-and-fall incidence) or property damage. Say you’re about to provide a quote to a client in your office space. Your client falls off the wobbly chair you provided due to its instability. Your client could sue you should they be injured, and your CGL insurance may cover legal defence costs and medical costs.

• Commercial Property Insurance: Commercial Property Insurance protects your business and business property from an insured event, such as a fire, theft or vandalism. Suppose your office experienced fire damage from an overheated electrical device. This destroyed the expensive computer systems you use on a day-to-day basis. Commercial Property Insurance could cover the cost to replace the business equipment that was damaged or destroyed.

• Cyber Insurance: Cyber Insurance is essential for life insurance agents who store client information or confidential data on a computer. This coverage could cover costs associated with cybercrime involving your technology systems and customer data, such as incident response and breach management fees. Say a virus was accidentally downloaded on a work computer, and over the course of two weeks, the spyware emailed the hacker over 1,000 screenshots of confidential data on 20 customers. Cyber Liability Insurance could provide coverage for notification and credit monitoring expenses for the affected customers.