Insurance Agents' Blind Spot: Their Own Policies Lacking Protection

Strategic Insights -

Specialized insurance agents who take the time to meticulously research coverage options for their clients often overlook their own liability needs, leaving themselves vulnerable to costly lawsuits. Agents face liability from three sources: customers, insurers, and third parties. According to Executive Risk Management Associates, many agents fail to secure comprehensive E&O coverage for themselves, putting their businesses at risk. Executive Risk's underwriter, Linda Blechman, explains, "Even if an agent is careful and avoids exposures, lawsuits can result from frivolous claims, and these suits need to be defended." The company's specialized insurance agents coverage addresses these exposures, offering defense for allegations of fraud, dishonesty, criminal or discriminatory acts, and covering claims adjusting, loss control, and premium financing services.

Key Takeaways:

  • Specialized insurance agents often fail to secure comprehensive E&O coverage for themselves, leaving their businesses vulnerable to costly lawsuits.
  • Agents face liability from three sources: customers, insurers, and third parties.
  • Executive Risk's specialized insurance agents coverage offers defense for allegations of fraud, dishonesty, criminal or discriminatory acts.
  • The policy covers claims adjusting, loss control, and premium financing services.
  • The policy offers $5 million in primary or excess limits and a $5,000 minimum premium.
  • Other features of the policy include the option to accept or reject claim settlements and binding or claims-handling authority for qualified agents.
  • ERII and ERSIC, wholly-owned subsidiaries of Executive Risk Inc., have earned ratings of "A (Excellent)" from A.M. Best Company and "A+" from Standard & Poor's.
  • Executive Risk Inc. underwrites D&O insurance in Europe in a joint venture with Union des Assurances de Paris -- Incendie Accidents.

Statistics:

  • 3 sources of liability for insurance agents: customers, insurers, and third parties.
  • $5 million in primary or excess limits offered by Executive Risk's specialized insurance agents coverage.
  • $5,000 minimum premium for Executive Risk's specialized insurance agents coverage.
  • 2 wholly-owned subsidiaries of Executive Risk Inc.: ERII and ERSIC, which have earned ratings of "A (Excellent)" and "A+" respectively.
  • 1 joint venture in Europe between Executive Risk Inc. and Union des Assurances de Paris -- Incendie Accidents for D&O insurance.

Sources:

  • Executive Risk Management Associates' underwriter, Linda Blechman's, statement.
  • Press release, PR Newswire, "Insurance Agents Are Similar to The Shoemaker Whose Own Shoes Don't Fit".
  • Executive Risk Inc. (NYSE: ER) company description.
  • ERII and ERSIC company descriptions.
  • A.M. Best Company's rating for ERII and ERSIC.
  • Standard & Poor's rating for ERII and ERSIC.
  • Union des Assurances de Paris -- Incendie Accidents company description.