Insurance agencies are businesses themselves. Just as you offer policies to others, your company also needs to invest in its own insurance coverage.
Agents know that business insurance isn’t just one policy. The vast number of policies under the business insurance label combine in many ways. With the right coverage combinations, each business will have the insurance it needs.
As you review your agency, determining the coverage you need might be tricky. However, one big element of your insurance company is your people. Most clients want to work with a trusted, knowledgeable group of insurance professionals. However, your agents and owners come with certain insurance liabilities.
Covering Employees Correctly
Most business want to fully protect the liability risks that their personnel create. For example, your executives and directors have different risks than your standard employees.
As high-raking employees, executives have a lot of sway over operating decisions. Therefore, their decisions and positions attach a lot of risk to the business. The decisions that insurance employees make could easily create risky situations for clients.
Directors and officers insurance (D&O coverage) can protect the added risks these officials face. Executive decisions may result in financial losses, employment practice lawsuits and other claims. In an independent insurance agency, there’s always a chance that executive decisions could impact the safety of clients and the credibility of the business. D&O coverage is usually a safe investment for insurance companies.
Why You Should Purchase D&O Coverage
Your insurance agency can benefit from D&O coverage in several different ways. Companies who place a lot of responsibilities on their officers often need D&O coverage.
As you’re working up your own policy profile, consider the merits of D&O coverage. Remind yourself how these policies can protect your agency:
- Coverage can sometimes help protect a business from unfounded claims. You may not lose a lot of money if you have to fend off employment practices claims. You can often cover the expenses with D&O insurance.
- If an executive makes a bad business decision, he or she could expose clients to damages. This insurance could help you mitigate and repair those damages. It might help you pay for certain damage control processes
- If executives fail to deliver contracted services, they may place the company in financial trouble. Use D&O coverage to help reduce these cost risks.
Of course, always make sure that your team behaves responsibly and ethically. Also follow all laws regarding insurance practices in your area. Negligence could be grounds for a claim denial.
Give U.S. E&O Brokers a call today at (800) 460-6424. We will provide you with Insurance Agency D&O coverage options that best meet your needs as an agent.