Every insurance company, whether large or small, should have reliable E&O insurance for insurance agents. This valuable type of insurance can mean the difference between bankruptcy and successfully recovering from litigation costs. If you are wondering what factors help to determine your errors and omissions insurance rate, here are a few things that insurance companies consider when determining rates:
Number of Employees
The amount of employees you have will help to determine your rate for E&O insurance for insurance agents. If you have a lot of employees, then your E&O liabilities are higher than they would be if you had fewer employees.
State of Operation
Various states have different laws governing errors and omissions insurance coverage, so the rates for coverage may vary depending on the state you do business in.
Your company’s risk of facing liability lawsuits typically increases as sales amounts increase. If your sales are high, then your rates may be higher than they would be if your sales were low.
History of Claims
If you have filed many different insurance claims during the history of your business, then your insurance rates will likely rise correspondingly.
There may be other factors that will determine your errors and omissions insurance rates, so be sure to talk to your insurance agent about what information they use to determine what your rate should be.