Any professional who provides a service needs E&O insurance to protect themselves against claims of negligent actions or inadequate work. Medicare agents sell hundreds of policies each year, exposing them to potential disputes from clients. As a Medicare agent, you need E&O insurance to help cover the costs of a lawsuit.
What is E&O Insurance?
Errors and omissions (E&O) insurance is a type of liability insurance for business professionals. You should have already purchased general liability insurance for your agency, but clients can charge individuals in lawsuits as well as the business, which is why you need personal protection. Think of E&O as an insurance agent’s form of malpractice insurance. Doctors and healthcare workers need specialized medical malpractice insurance in case patients sue for wrongdoing. E&O insurance offers that protection for Medicare agents.
E&O covers: errors, mistakes or oversights; failure to meet a deadline or deliver a promised service; professional negligence; failure to meet a standard of care; and breach of contract. The exact coverage of your policy will vary.
This insurance pays for court costs and legal fees. If you are found guilty, your policy will help to cover the costs for settlements, along with damages and expenses you caused others. Your insurance policy will specify a maximum amount for coverage, but can substantially help with these legal expenses.
E&O insurance will not cover criminal activity, illegal acts, intentional wrongdoing, and other criminal prosecution or liabilities. You may also find that your policy does not provide retroactive coverage, cover temporary employees, or pay for damages due to cybercrime. Your general liability insurance will cover bodily injury caused by your business, so E&O will not cover that.
Why Get E&O Insurance?
Your agency, carriers or regulatory bodies may require you to hold E&O insurance as a Medicare agent. You provide professional advice and services for a fee, so this liability insurance is critical to protect your interests in the event of a lawsuit.
On top of disgruntled clients, your agency also needs to prepare for the possibility of errors and the damages they could cause. If you don’t have the proper protections for privacy and security, submit enrollment applications past a deadline, violate marketing and enrollment regulations, or make other errors in the course of business, you can create problems for your clients. Setting up your procedures with a designated compliance coordinator can help you control a few of these variables, but professional liability insurance can protect you if those fail.
Agents working with Magellan Healthcare receive the support they need to operate compliantly. Speak with our team to learn more about best practices for Medicare agents and how to get started.
