What insurance agents/brokers E&O (errors & omissions) insurance limits do you buy? Insurance agents/brokers buy limits based on a variety of factors. A primary driver is the contractual requirements required by insurers. A recent post by Curt Pearsall at Agents E&O Tips (see here) has a number of good reminders regarding limits for insurance agents E&O, including:
- Large E&O claims occur, including at smaller agents & brokers – buy enough limit.
- It is hard to change limits mid-term, so choose wisely at policy inception.
- The best use of your dollars is on limits
We would add the following points:
- It is not always preferable to buy a higher aggregate limit than an each claim limit. On the same budget amount, it may possible to buy higher absolute limits if the each claim and aggregate limits are the same.
- Using the same reasoning, it is not always preferable to buy defense outside the limits. Again, budgetary considerations may result in higher total limits with defense inside – so it depends.
- It is preferable (and important) to aggregate the deductible (but not always possible).
- Other terms will also impact coverage, and can be as important as limits. Pay attention to terms.
Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary services to our retail insurance agent clients in the placement of professional liability insurance (E&O, D&O, EPL, Cyber).