Watch Out for these Pitfalls Watch Out for these Pitfalls
Life Insurance Agents and Brokers Errors and Omissions Marketplace Deficiencies

By Glenn W. Clark, CPCU

Errors & Omissions (E&O) Insurance for Life Agents and Brokers has been around for years. Prior to launching our E&O program, Rockwood Programs Inc., a national administrator for a comprehensive life agents and brokers Errors and Omissions (E&O) program, did our homework. With decades of Life insurance experience, our management team set out to learn even more. We wanted to know everything about current E&O policies and, more importantly, not repeat others' mistakes. What we found was although this product has been covering Life professionals for years, there are still some critical deficiencies within the marketplace.

Here's what we found:

  • Many agents do not carry professional liability.
  • Some carrier-sponsored plans limit coverage only to the products sold on their behalf.
  • Most plans fail to consider vicarious liability exposure faced by many General Agents (GA’s).
  • Many programs available today are simply derivations of policies written for Property & Casualty agents.
  • Some plans fail to extend coverage to employees acting on the agents behalf.

Our experience and research with Life professionals gave us the knowledge to create an E&O program free of what we feel are critical pitfalls within the Life E&O market. Here's our advice when considering or reviewing your policy:

  1. If you don't have an E&O policy that covers your activities as a professional Life agent or broker, stop now. Don't do any work the rest of the day, don't make any calls and don't answer any calls from your clients. You're not covered.
  2. Obtain a policy that's portable and covers all your activities as a professional agent, not just the activities with your sponsored company.
  3. Be sure your policy includes vicarious liability and covers you in the event you are sued for the actions of your sub-producers. This coverage can often be added by endorsement.
  4. Be sure your plan is tailored to your activities. You might not be selling financial products now, but could have the opportunity to do so next year. Don't let your E&O policy limit your professional opportunities and additional revenue sources.
  5. Check your policy to be sure it covers the activities of all licensed and non-licensed personnel while working/acting within the scope of their duties as an employee.


Rockwood Programs Life Agents Errors and
Omissions Coverage

Rockwood Programs, Inc.  

Learn more about this important product at
www.rockwoodinsurance.com

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