Running your insurance agency means working with a lot of different people. You might have multiple partners that provide you your policy packages. You also deal with clients daily. All these parties expect professional, polite and responsible service. So, if you fail in that duty, you might face claims of libel
are slander. These charges could get costly, and they could damage your reputation. However, if you have errors & omissions (E&O) insurance, you might have recourse. Here’s why.
Your commercial insurance should include E&O protection. Slander and libel risks, even untrue ones, could arise at any time. You therefore should do everything you can to prevent these instances in the first place.
What Are Slander and Libel?
Slander and libel refer to actions you commit that harm another person or their reputation. Slander is a false claim about someone made through spoken words. Libel is a false claim made in writing.
In this regard, libel and slander become liabilities for your business. If someone within your agency commits one of these acts, then they could harm someone outside the business. That person, as a result, might hold you responsible for the reputational damage they might experience. Errors & omissions insurance can therefore help you to respond to these claims.
How E&O Insurance Can Help You
Let’s say that one of your insurance partners alleges that you committed slander against them. For example, they might claim that you told another agency not to work with their company because they steal from agencies.
Regardless of if you actually made this claim, the allegation alone might have harmed the company. It could cause reputational damage and inhibit their ability to do business. They might therefore sue your agency for the harm you caused them.
Even if you don’t have to settle with them in court for damages, the action could still cost the agency. You might face costly legal fees, for example. So, even if you were totally innocent of the crime, it still might cost you. It is during these cases that E&O insurance might cover legal fees, settlements and even repayment for emotional distress. Therefore, both parties have a better chance of weathering the storm that might surround them.
Of course, you never want to face a slander or libel allegation to begin with. Therefore, professionalism might prove one of the best ways to avoid these situations. You must enforce the strictest codes of professional ethics within your organization. Employees should know how to maintain appropriate, polite relations with anyone, from coworkers, to bosses and clients.
Also Read: Determining Your E & O Insurance Requirements