BOP Vs. E & O

[squeed]

I'm starting a new thread because I jacked my own thread earlier. I'm trying to understand the difference between a BOP and E&O insurance is it the same ? If not do you need both ?

-S

 

[xrac]

Here is a link for BOP.

Business owner's insurance policy (BOP) - What is it??

BOP will probably never include E&O. You will have to have E&O more than linkely and it is something I would not operate without. Whether you need the BOP depends upon whether you have any property that will need to be covered. If you have an office you will need some liability.

My suggestion is that if you do not know anymore about the business than these questions suggest you should not start out with your own agency but work under someone till you are more informed.

 

[Cranson]

I am going to assume you are mostly dealing will personal lines P&C?

A BOP is a small business policy that packages Property and General Liability Coverage. You really can't compare a BOP with E&O. So what you are likely comparing is General Liability with E&O. General Liability covers any Bodily Injury or Property Damage that your business is legally liable for (this is the very simplified explanation). E&O will cover you for any Errors or Omissions you make in the course of your insurance business that you are legally liable for. It is absolutely essential to carry E&O if you own an agency (actually your carriers will require it). Also your landlord will require you to carry General Liability coverage.

 

[Benefits Man]

Don't most landlords require tenants to have a BOP?

 

[scagnt83]

E&O is to the insurance agent as Malpractice Insurance is to the Doctor.

You asked this question in another thread, but I will answer it here:

Aon is a widely used good quality E&O provider. They are marketed mainly through Affinity Services I think. They are the underwriter for many of the financial professional organizations group coverage. And they are the required provider for many B/Ds. They are also fairly competitive when bought through an organization such as naifa.
But I would recommend speaking to an independent P&C agent who specializes in this area to give you direction dependent upon your situation. Or some time spent on google can yield some more results.
There are a lot of what I call "bargain bin" E&O companies that have very limited underwriting, a cheap rate, and cheap coverage. They only do E&O for insurance agents, no one else. They have a one size fits all mentality to their coverage from my experience.

Here is a link to an article about E&O. Its geared toward financial advisors, but its still relevant to an insurance agents coverage.
E&O AND U

Here are some considerations when choosing E&O that I had posted once on another thread:

E&O is not just about the amount of coverage.
The max is what most insurance companies look at mainly because its the easiest and most efficient way to judge if an agent has a sufficient amount of coverage. But this is mainly just so they can claim they where diligent in appointing you.

There is a lot more than just the maximum amount of coverage:
-Retro provisions.
How far back does the policy cover. Does it cover past appointments or just current ones. Past agency, or current one. And does the look back cover all lines of insurance that you sell, or just some?
-Defense costs and payment procedures.
What is the max for defense costs? Are they paid up front by the company or just reimbursed? Do they have to approve the lawyer? Are defense costs separate from the claims max, or are they deducted from it? Is there a time limit to providing defense costs? Are all of the defense costs provisions included in the retro provisions?
- Carrier ratings and coverage.
What is the minimum financial rating of a covered company? What happens if the company underwriting a major block of business falls below the rating minimum? Is the carrier rating min the same for all lines of business?
-Coverage limits
How much coverage can you write? Is there a limit to the DB or disability benefit, etc.? Is the max different for retro biz?
-Business activities
What are your business activities defined as? Are your product related referrals covered?(people can be sued for a referral to an attorney or CPA who wrongs a client, its been done)
Are there any state specific exclusions if you happen to do business in that state? What kind of advice do you give in relation to your products? How much of that advice is covered? Is any advice covered? If product or service related advice is covered, how is it defined??


All of this and more varies between E&O policies. If you think your $500 policy w/ 2mill max, protects you the same amount as my $2k policy w/ 2mill max I guarantee you your wrong.

Im not saying its better just because its more expensive. Im saying its better because I have compared it to the $500 plans, and the coverage is much more extensive.
(plus my B/D wont accept a lot of the cheaper plans because their liability insurance wont cover it!)
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[Cranson]

Don't most landlords require tenants to have a BOP?

They will require Commercial General Liability, which is included in a BOP.

 

[AgentSurfer]

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