You have a need for errors and omissions (E&O) insurance, so you do what most people do — look for a broker to find coverage. However, is that coverage really working for you?
In most cases, we at NFP will review a prospective client’s current coverage and find ways to make significant improvements. The reason: E&O is a highly specialized placement. Much of the E&O business written today is placed by brokers that do not have the depth of knowledge required to effectively understand and place E&O risks.
Organizations often assume that because E&O is not a major part of their insurance program, any broker or wholesaler can place the coverage for them. However, in reviewing countless E&O policies over the years, we have found coverage that doesn’t fit the organization’s operational risks adequately, lacks specific coverage terms or conditions, or is overpriced.
Without an E&O specialty broker, organizations are getting whatever a broker or wholesaler is presenting. That’s a critical miss. There are certain types of accounts and business lines that need specific terms and conditions in order to protect their business operations fully. A broker who doesn’t specialize may not know to look for those protections.
An E&O specialty broker ensures your organization’s coverage program has:
- Appropriate definitions – Professional liability coverage is built around the definitions of professional services that you provide. These often need to be amended to provide appropriate coverage.
- Anticipatory terms and conditions – There are standard contract requirements for a number of industries. Your professional liability program should incorporate these common requirements so that you will not need to amend contracts or get a new endorsement each time there is a contract requirement that should have been anticipated, such as:
- Waiver of subrogation
- Account for additional insured(s)
Most importantly, NFP will take the time to understand your business. No professional liability program can be structured properly without understanding things like your operations, corporate structure and contracting practices.
What An E&O Specialty Broker Offers
Simply put, an E&O specialty broker delivers specialized service. NFP knows that risk management involves more than insurance. So, not only does NFP deliver superior coverage but we also assist with contract reviews. Often your best risk management strategy will begin with favorable contract terms that allow you to rely less on your insurance.
Because we have close relationships with E&O carriers, our brokering process is more efficient for us and for you. We understand which markets are best suited for your exposures, and which will provide the most competitive premiums. We also know what they’ll require on the E&O application.
An E&O specialty broker also can deliver better pricing. For example, we conducted a diagnostic assessment on one account recently that revealed the company was paying far too much for inadequate coverage. We were able to reduce their premiums by 47% and improve their coverage significantly. The previous broker was not a specialist and didn’t know what the appropriate coverage or pricing should be for that business.
These results are something that brokers without E&O specialists simply cannot deliver. Without specialized knowledge of the E&O industry, the client’s business and the carriers’ requirements, clients are not getting the best coverage, nor the best price.
With an E&O specialty broker, not only is the knowledge there, but so is the relationship with the carriers, the producers and the clients’ businesses themselves. Brokers need to understand a client’s operations, contracting procedures and so much more to assess the risk and find the right placement. With all those relationships in place, your E&O broker can find you the most appropriate insurance program, and at a better price for the coverage you have in place.
One Size Does Not Fit All
When trying to find right-fit E&O insurance, know that no two organizations’ risks are identical. While a general broker or wholesale broker may be able to find coverage, they may not have the understanding of your operations that is needed to find the best coverage. As a result, your business may not be protected fully. What’s more, you could be paying more than you need.
Look for an E&O specialty broker that has the understanding of the market, has strong relationships with the carriers and is able to assess your business operations from an E&O perspective. A specialist will know what options are available and what coverage terms are needed to protect your business and help it thrive.
For more information, please contact Cynthia Olinger at cynthia.olinger@nfp.com