Is E&O Insurance Enough?

M

mr_jpt

Expert
28
Massachusetts
I am an independent agent working alone. My wife is worried that someone may sue and take the house. She thinks I should become an "S-corporation" for added protection. I feel that $1 million E&O should be enough coverage for anything that may come up, right? I mean, that's is what it's for, no? Any advice would be appreciated.
Thanks!
~Jeff
 
mr_jpt said:
I am an independent agent working alone. My wife is worried that someone may sue and take the house. She thinks I should become an "S-corporation" for added protection. I feel that $1 million E&O should be enough coverage for anything that may come up, right? I mean, that's is what it's for, no? Any advice would be appreciated.
Thanks!
~Jeff
Click to expand...

The biggest problem as I see it is that no one really knows anyone that has had a big payoff with their E&O.

People seem to know someone that knows someone that it saved their life and swooped in and paid everything up to their limits. Maybe I am wrong but I feel the discussion has come up before and not to many were first hand stories.

Incorporating might not be a bad idea but having said that it does depend on what lines your selling that can put you at bigger risks for claims.

Their are limits as to what the e&o will cover and the truth of it is, if you tell the truth and do the right thing you should never have a problem.
 
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Their are limits as to what the e&o will cover and the truth of it is, if you tell the truth and do the right thing you should never have a problem.
Click to expand...

That is far from the truth. Mitigate the chances, yes, "never have a problem", no. I have seen second hand another rep in the office I started out with get sued when he did nothing wrong. He didn't lose, but still had an E&O claim.

Incorporating might not be a bad idea but having said that it does depend on what lines your selling that can put you at bigger risks for claims.
Click to expand...

Disclaimer: this is definetly not legal advice, talk to a professional. I have been told that if you are the one giving advice, the corporate veil means relatively nothing for an attorney to come after you personally. If you have an agents and get sued because of their advice, then my understanding is that it may have some advantages. I would talk to an attorney first before making a decision.
 
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I am licensed for life and health in Massachusetts.
So let me rephrase my original question.
Do any of YOU have anything more than E&O? Are you incorporated, etc...?
 
well its on a sliding scale ...if abduction's are high the commish is low...as of yesterday they were at 82.4% so the commish was 97%....

HarryRenard said:
Very, very funny.

I know its not supposed to matter but what is the commish on that.
Click to expand...
 
I only have E&0 but deep down do I think it's enough, .. No. If you are going to encorporate do an LLC but you basically will need a full time accountant to do your taxes and all the associated paperwork or it's a real nightmare for most people that hate all the details.

Get started and when commissions reach $75,000 and growing, switch over...

Good luck.

It's ashame we all live in a society where we constantly worry about being sued. Why don't we work to change this.
 
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