Did you know?
We’ve spoken to many advisors who rely on their host agency’s or agency owners Errors and Omissions Insurance to cover them in the event of a claim. But, did you know that you may not be covered? Errors and omissions insurance (E&O), also known as professional liability insurance, is vital for your company. E&O protects you when you make a mistake or forget to do something important, which ends up hurting a client. It also covers your legal defense. If you have a host agency or agency owner that carries an E&O policy, you may think you do not need additional E&O insurance. Well you may want to rethink that. Here’s just one reason why.
Let’s assume your host agency or agency owner carries $5 million in liability insurance. There are 5 agents in your agency. As an example, they are all covered for about $1 million in liability insurance. But, what if there are 50 agents in your agency, and it’s been a bad year (like 2020)? When you need to file a claim, you find out all of the policy funds are depleted because so many other agents filed claims before you. Now you are stuck trying to come up with the full amount of the trip out of your own pocket. That’s a lot to deal with in a year when there are more cancellations than bookings. So, what’s the solution? If you carry your own policy, you would be covered for a small monthly fee and your deductible.
Also, check out on planning fees of travel agency for you to avoid a year of financial losses.