If you want to start an independent insurance agency, you'll need your own insurance to protect your company and clients properly. You can't sell policies until you have suitable types of coverage, including errors and omissions (E&O) insurance and cyber liability insurance. Employment practices liability insurance (EPLI) is one you will need as you grow. These three types of agency insurance will protect your business in different ways.
Errors and Omissions (E&O) Insurance
As an insurance agent, you are held to a professional standard. If you make a mistake or fail to deliver on your promise, your client could sue you. E&O insurance protects you if a client sues for errors or omissions committed in the course and scope of your business. This insurance is required before you can begin operations since you need it to gain carrier access. Without it, carriers will not offer appointments.
Cyber Liability Coverage
As an insurance agent, you are responsible for safeguarding your clients' personal information. You could be held liable if a data breach occurs and sensitive information is leaked. That's why you need cyber liability coverage. This type of insurance will help cover the costs associated with a data breach, including legal fees, settlements, and damages. Comprehensive cyber insurance is a must for your agency and will also help you gain the trust of clients.
Employment Practices Liability Insurance (EPLI)
Once your agency is ready to hire additional employees, you will need EPLI insurance. EPLI protects your agency against costly lawsuits resulting from employment practices, including hiring and termination decisions. It also covers costs associated with defending against claims that allege discriminatory employment practices or harassment. Many insurance carriers sell specific EPLI policies tailored to agencies, while others have general liability coverage options that include EPLI.
AAI Can Help
You've invested significant time and finances in growing your agency. As you would with your clients, be sure you have the proper coverage. Affordable American Insurance provides your agency with a roadmap to success, including advising you on the essential insurance policies you need to build and grow your independent insurance agency. Contact us to learn more!