Insurance agent insurance

What Type of Insurance Do I Need for My Insurance Agency?

Business Insurance Policies Available for Insurance Agents

Insurance for insurance agents can be made up of a bundle of policies, which each can cover a specific aspect of your business. Let’s take a look at a few of the policies that can be used to create comprehensive coverage.

Professional Liability Insurance

As an insurance agent, you probably spend a lot of your time helping clients understand the nuances of insurance. We get it — insurance can be complicated, which means your clients depend on you to help them understand what they’re buying.

So what happens if you accidentally advise them to buy a policy that doesn’t protect them?

You guessed it — you’d want professional liability insurance on your side.

Professional liability insurance (PL) for insurance agents can protect your business if a client accuses you or one of your employees of being negligent in providing your services. Simply put, if a client experiences financial damage as a result of your advice and sues you over it, your PL coverage may be able to pay for resulting damages, as well as attorney’s fees.

Let’s take a look at a specific example of professional liability insurance in action.

A client of yours is shopping for homeowners insurance. You tell the client that they don’t need water backup coverage on their insurance policy; however, a few weeks after the client buys that specific policy, his sump pump overflows, causing damage to his property. The client is livid when they find out that the policy doesn’t cover the damage, so they sue you over your negligent advice.

If you had PL insurance in this case, your policy would potentially cover the cost of hiring an attorney to defend you against the claim. Additionally, the policy could cover the costs of claims you’re ordered to pay for (up to the policy limit).

Without this coverage, you would have to pay those costs and damages yourself, and that could have a devastating financial impact on your insurance agency.

Since so much of your work involves advising clients on their policies (thus exposing you to risks of negligence), professional liability insurance can be an essential policy for protecting your business.

Typically, professional liability coverage for insurance agents covers:

• Negligence or alleged negligence
• Legal defense costs
• Omissions or alleged omissions
• Claims and damages
• And more

However, PL insurance usually doesn’t cover:

• Intentional acts and omissions
• Property damage
• Medical expenses
• Bodily injury
• And more

Commercial General Liability Insurance

Do you have an office where your clients can come to meet with you?

If so, it may be a good idea to add general liability (GL) insurance to your overall insurance agent coverage.

Here’s why: this policy covers costs associated with accidents that cause damages to third party property and/or bodily injury to a third party (e.g., a client or vendor). In other words, if a client gets hurt while visiting your office, your general liability policy may be able to cover the client’s medical bills. The policy could also cover some or all of the costs of attorney’s fees and claims, if that client were to sue you (up to your policy limits).

GL insurance can protect you from significant claims, especially around customer damage and injury. This type of claim isn’t just the most common one that small businesses experience — it’s also one of the most expensive at $30,000 (the average customer injury or damage claim).

With GL insurance, your policy would cover some or all of that claim. Without it, you’d have to pay for it out of pocket, and that’s a hefty bill!

Let’s take a look at general liability for insurance agents in action. While visiting you at your office, a client slips on a loose rug, falls, and hits their head on the floor. They end up with a concussion, causing them to miss work during their recovery from the injury. As a result, the client sues you for lost wages and medical bills.

General liability insurance can cover these costs, as well as attorney’s fees if you need to defend yourself in court.

Take a look at what general liability insurance usually can cover:

• Bodily injury to another person
• Third-party property damage
• Personal and advertising injury
• Medical expenses
• And more

Here’s what general liability insurance usually doesn’t cover:

• Damage to your own property
• Professional services
• Workers compensation or injury to your employees
• Damage to your work
• Automobiles while in business use
• Expected or intentional injury or damage
• And more

Workers Compensation Insurance

Do you have employees in your insurance agency? Whether they’re full-time or part-time, you may be required to carry workers compensation insurance as a result. This plan is designed to cover costs associated with an employee’s injury or illness that happened while working for your agency.

In general, if you have employees, your state likely requires you to have workers compensation insurance. You can check here to see your state’s laws or contact a local attorney to discuss your state’s requirements.

Did you know that the average work injury cost is $41,000? With workers compensation insurance, you and your agency can be protected against these significant liabilities and costs. Even if you have just one part-time employee, it’s a good idea to have this policy, so your business isn’t left vulnerable.

Typically, workers compensation for insurance agents can cover:

• Medical payments
• Lost wages
• Rehabilitation expenses
• Death benefits

Why Should I Get Insurance?

No one needs to convince you regarding the value of insurance. After all, you’ve dedicated an entire business to helping your clients understand why they should have insurance protection!

But maybe you’ve been busy lately. Or maybe you’re just opening your insurance agency and you want to have a few clients under your belt before buying a business insurance policy.

We understand those reasons. Here’s the thing, though: the longer you put off getting a business insurance policy, the more likely you’re exposing your agency to significant risks and liabilities. And you don’t have to be an experienced agency to begin encountering those risks; in fact, your first client is just as capable of suing your business for alleged negligence as another client.

Those liabilities can be fairly expensive, too. Just take a look at a few of the most common claims, including their average claim costs:

• Reputational Harm — $50,000
• Client Injury or Damage — $30,000
• Client Slip and Fall — $20,000

As you can see, these costs are nothing to sneeze at. That’s why it’s important to keep your insurance agency protected as soon as you start it!

At Simply Business, we make it easy to find the right insurance plan for your agency. Just answer a few questions about your agency so we can provide free insurance quotes that match what you need.

It really is as simple as that!