Error And Omissions Insurance Policy Protects Insurance Salesman From Lawsuits
Insurance salesman has to be licensed by the state in which they work
. In order to obtain this license, they have to attend college. The college classes teach the sales representative about insurance and how it works. They also teach sales representative about ethical and legal issues that can affect them and their customers. The salesperson is responsible for understanding the insurance that they sale. They must know what types of coverage various individuals need. As people move through life, their insurance needs change. This applies to health, car and home insurances. To protect a sales representative against a malpractice suit they carry an errors and omissions insurance policy.The errors and omissions insurance quote considers various factors. Things such as how much experience the salesperson has. They also take into consideration the college courses they have taken. The insurance is the same as when a physician carries malpractice insurance. The errors and omissions insurance policy will pay out any lawsuit in which the salesperson may be named. For example, a sales representative writes a health care policy for a young couple in their twenties. The policy does not contain any provisions or coverage for pregnancy. This would constitute malpractice because a reasonably prudent agent would have offered pregnancy benefits. However, if the sales representative offered the coverage but the couple declined then there is no malpractice involved. Another example would be selling a homeowners policy to a home in a listed flood zone without flood coverage.
Errors and omissions insurance policies protect both the consumer and the sales representative. The consumer receives protection because they receive compensation for the malpractice. For example, if the house in the flood zone experienced a flood the policy would pay for damages incurred to the house. This restores the policy owners' property just as if they had the flood coverage from the beginning. If the salesperson did not have the errors and omissions insurance, he or she would have to pay out of their personal funds.
The salesperson receives protection because the insurance company pays for any damages, saving the salesperson from financial ruin. This coverage is regulated by law in many states. No prudent insurance sales representative would risk selling any insurance, without errors and omissions insurance policy coverage. Even the most careful of sales representative occasionally makes a mistake. The financial damages from a lawsuit could ruin a sales representative for life. If the salesperson lost the lawsuit, he or she would be paying it off for the remainder of their life. The salesperson would not be able to buy a house or other normal things that people do during life. They would always be paying off a major lawsuit. Errors and omissions insurance policies are the essential for the protection of the salesperson and purchasers.
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