Let’s face it, being an insurance agent can be a lot of work. You’re dealing with a lot of customers, some of them demanding, a lot of them confused about insurance, and you have to keep them all happy. This means that renewals and new applications have to be processed on time, questions have to be answered, and changes in coverage have to me made.
This leaves a lot of room for an agent to make an error or omission. Even if you don’t end up making an error or omission, you can have an unhappy customer (usually one of the confused ones) file a claim against you.
It is estimated that one out of seven insurance agents will have an E&O claim filed against them during their career. Needless to say that defending such claim, in addition to possibly having to pay damages, can be time consuming and expensive.
This is why E&O insurance is purchased by most insurance agents. E&O insurance provides insurance agents with peace of mind that if a claim is filed against them, their insurance company will take care of it. This means that insurance agents can instead focus on running and growing their business.