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Should I keep E and O? A change in my circumstance

Jan 21, 2018

  1. TampaHound
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    TampaHound Guru

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    I've a question about E and O and if I should keep it or not. Bear with me though because I do think a little explanation is needed.

    I used to work for a call center, they covered my E and O and considering how I was mostly just selling FE insurance. I started to sell part time on the side and did some term policies and a few FE polices. Because I was selling outside my company I decided to get some E and O to cover my ass.

    I considered going full time independent but found a call center job where I can get an hourly wage + commission + residuals. However I'm not allowed to do any outside sales and have to cancel of current appointments. All my old business then will simply be serviced.

    The new job is mostly Medicare (Sups and MA plans) with smaller accessory plans (dental, vision, cancer, etc) on the side. I might have the odd FE here and there as well.

    I don't see any reason to carry E and O and I'm not sure but I think the company would cover me anyway. I'm checking that on Monday.

    So should I keep it just for safety's sake or save myself the cash?
     
  2. Newby
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    Newby Guru

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    It hardly costs anything. Why would you not.

    Example: you sell a guy a life policy. He is approved. It drafts on the 1st. You get paid.

    On the 10th he gets hit in his car by a train. Squashed like a bug. You are shocked but very thankful that his policy is in force.

    On the 20th you get notified that you wrote his bank account number incorectly on the app. You inverted two numbers. Opps! His account never drafted. Someone elses account did. Policy was never in effect because there was no premium.

    Unlikely? Yep. But it happened.

    We are insurance agents. We need to insure ourselves. We need to believe in insurance. Especially when it costs so little.
     
    Newby, Jan 21, 2018
    #2
  3. somarco
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    somarco That Medicare Expert Guy

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    I dropped E&O and my license for several years while I was a carrier employee and didn't need either. Didn't matter much about E & O but I should have kept my license.

    I didn't own my "block" from the years prior to becoming an employee but I could have sold on the side as long as I wasn't selling away.

    In retrospect I should have kept my license AND E&O. You never know when it might come in handy. Especially when your employer decides to change direction, or sell out, and doesn't need you any longer.
     
    somarco, Jan 21, 2018
    #3
  4. adjusterjack
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    adjusterjack Guru

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    Do you have an "occurrence" policy or a "claims made" policy?

    Do you know the difference?

    The answers will be critical in determining the potential financial consequences of your decision.
     
  5. VolAgent
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    VolAgent Guru

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    If you drop it, you better make sure the new company's policy covers you for prior acts.
     
    VolAgent, Jan 22, 2018
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  6. kgmom219
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    kgmom219 What's Next?

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    Imagine how you would feel if a call came in from a policy that is 2 years old after you saved the $30.

    Pay the money. You'll sleep better.
     
    kgmom219, Jan 22, 2018
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  7. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Excellent point. Most claims arise years later, not at the initial sale.

    A single claim will cost you thousands in legal fees... even if it goes away. If it doesnt your looking at tens or hundreds of thousands.

    If you have to ask if you need E&O, then you need E&O!
     
    scagnt83, Jan 23, 2018
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  8. djs
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    djs Super Moderator Moderator

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    You should be able to pay a small premium and get tail coverage for a couple of years. I wouldn't worry about it after that.

    Ask your E&O carrier, they have people stop writing policies all the time.
     
    djs, Jan 24, 2018
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  9. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Ive never heard of "tail coverage. "But that a much better idea! Also calling the E&O carrier is probably a great idea too... or the agent... lol.
     
    scagnt83, Jan 25, 2018
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  10. VolAgent
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    VolAgent Guru

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    It depends on how it is priced too. Your carrier may or may not have a reduced price for it.
     
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