How to find the best E & O Insurance Provider for Your Firm or Agency
A huge part of being an attorney or title agency means having to purchase errors and omissions (E&O) insurance. However, choosing the right insurance plan can be complicated and overwhelming. There are many insurance companies on the market that sell E & O insurance and choosing the wrong one might cost you a fortune.
When you shop for E & O insurance, get several quotes so you can compare costs, coverage, and limits. To help you find the best E & O insurance provider for your firm or agency, here are 10 factors to consider as you compare your options.
The financial strength and track record of an insurance company should be considered because it shows whether or not you can depend on the company in the future. Many insurance companies have failed, leaving clients to fend for themselves in times of need. You want to make sure an E & O insurer has enough assets to pay out claims. Analyze a company’s financial strength using ratings from independent rating agencies, including A.M. Best, Moody’s, Kroll Bond Rating Agency, Standard & Poor’s, and Fitch.
Insurance premium is the amount of money you pay to the insurance company periodically to maintain your E & O coverage. It’s a big factor to consider, but shouldn’t be the only one. You must weigh the cost of the E & O insurance against the level of protection it will provide for your business.
Remember, you get what you pay for. Taking a cheaper option may mean you have less coverage and could end up paying more money out of pocket when a loss occurs. You also want to make sure that you’re not paying for expensive coverage you don’t really need.
Insurance deductible is the amount you pay before your insurance benefits kick in. Choosing a high-deductible E & O insurance policy can help lower your premium, but that option can be risky. For instance, if a client sues you for negligence and you can’t afford the deductible, your insurance provider won’t pay for anything.
When shopping for your E & O insurance, ask yourself how much premium you can afford to pay in a month and what chances are there of being sued by a client. Generally, you have more risk when you have more clients. Make sure you choose a deductible that you can comfortably pay.
Customer service is critical when it comes to insurance. The industry involves moving pieces that you may not understand or foresee. Your insurance provider should answer phone calls and questions efficiently and quickly. They should be available to you when you need them most and be patient in their approach.
You can make a call to get an idea of the kind of attitude they have toward potential customers or check a national claims database to see what complaint information there is about the company.
History and Reputation
An insurance company may put out flashy advertising, but as a discerning investor, you have to check their history and reputation to make sure the company is right for you.
Visit their websites and check:
- How long they’ve been in business
- Their vision, mission, and values
- In which areas they sell their products
- Types of insurance products they sell
- Community involvement
- Company leadership
- Financial stability
- Claims settlement ratio
If the information on the website leaves you feeling not quite right about them, consider an alternative.
Duty to Defend Clause
Does the E & O insurance quote contain a duty to defend provision? An insurance policy with that language requires the insurer to provide legal defense for a lawsuit, even if the claim isn’t ultimately covered by your policy. Your insurance provider decides which attorneys to hire and whether to settle the case out of court or take it to trial.
If this language is missing, chances are your policy has a “non-duty to defend” clause. This means that you have to choose an attorney, manage the ligation process, and pay defense costs. This type of E & O policy is likely to be a little cheaper, but it means you’re on the hook for a lot more if a claim is filed against you.
Plans for Payment
Some E & O insurance providers offer more flexible payment options than others. Most of them allow you to pay your premium in monthly or quarterly installments. With this, you can get access to coverage even if you can’t pay the entire premium at once. Also, you may want to ask about discounts that may apply to you.
The amount of coverage offered is important. Choose an insurance company that provides the right coverage for your needs. Ask what is covered and what is excluded before you make the purchase. This will help prevent disappointment when you have a claim on your policy.
Per Occurrence and Aggregate Limits
Both per occurrence limits and aggregate limits have a significant effect on how much an E & O insurance policy provides. As such, you need to make note and compare the limits listed in your quotes. Per occurrence limit is the most your policy will pay for damages resulting from one claim. Conversely, aggregate limit is the maximum amount the insurance provider will pay in any one policy term.
For example, if your errors and omissions insurance has a $1 million per occurrence coverage limit and a $2 million aggregate limit, your first and second E & O lawsuits will be covered. However, those two lawsuits will put you at your policy’s threshold and your policy won’t provide further coverage until it’s renewed. Each policy is different so you want to make sure you review coverage limits.
Claim Settlement Process
Claim settlement is the process whereby an E & O insurance company pays out the sum assured in the policy document. Every insurance provider uses a claim settlement ratio to record the percentage of claims it has settled in a year out of the total claims. The data is then submitted to the Insurance Regulatory and Development Authority (IRDAI), which in turn publishes the data on its website.
The claim settlement ratio is an indicator of an insurance provider’s reliability to pay out their claim. A higher number reflects a pattern of resolution of robust claims.
Choose Attorneys First Insurance for Comprehensive E&O Insurance
Attorneys First Insurance offers customized errors and omissions insurance coverage for the risks that lawyers and title agencies face. We have flexible payment options and better coverage with better terms and lower rates than other insurance providers.
In fact, we guarantee to save you at least 20% on your professional liability insurance. As your company scales, we work with you to adjust your coverage and meet your current needs. Our company is built around experience and customer service and we strive to serve our clients with integrity and respect. Contact us today to request a quick quote.