Opinion: An agent's place in the complex world of E&O insurance

John Torvi of the Landy Insurance Agency discusses recent market trends and how agents can make the most of them.

Insurance News


Property and casualty insurance trends – claim severity, premiums, coverage availability – typically follow population swings, national disasters or location specific circumstances like wind or water damage in coastal areas. With errors and omissions or professional liability insurance, claim, premium and coverage trends more closely follow economic trends.

The recent mortgage collapse and resulting recession is quite indicative of this. As homes and estates became less valuable, job losses increased and incomes stagnated, people began to look at the professionals involved in all of these areas, and the deep pockets of the insurance carriers, for some relief.

Nowhere was this more apparent than in the industries related to the real estate, legal and banking industries. Hardly anyone was spared. Real estate agents, appraisers, attorneys, lenders and even accountants all saw dramatic increases in claim activity, resulting in higher premiums and diminished underwriting capacity. However, the professional insurance market as a whole experienced this tighter market, including polices for Directors & Officers and Employment Practices Liability and E&O for architects & engineers, insurance agencies and others.

As insurance carriers reacted to the negative economy, the complicated world of E&O insurance grew even more complex. Insurers dropped in and out of markets, underwriting guidelines changed and MGA’s, Administrators and agents worked overtime on behalf of their clients to provide the best combination of coverage and pricing available.

Professional Liability/Errors and Omissions insurance was never that simple to offer in the first place. With its unique features, like a Claims Made form, Retroactive Coverage, Loss Only Deductibles, Claim Expenses In or Out of the Limits and Extended Reporting Periods, offering this coverage required a bit of a learning curve for many agents.

With all this in mind, should insurance agents avoid marketing and selling professional insurance to their clients?

Definitely not! In fact, agents working with professionals for their personal or business P&C needs are perfectly situated to help their clients and grow their own business. The key is to develop relationships with quality and experienced Program Administrators and carriers.

It’s still insurance, not rocket science, but working with the right Administrator or company can help the generalist agent navigate the complexities of the market and coverage features. For example, the Landy Agency has been a national program administrator for many years, and we work with hundreds of producers on behalf of their professional clients. Some of our producers are quite skilled in the professional arena, while others have an occasional placement or two that they need assistance with. A good administrator will provide their producers with the materials, information, service and quality product that any insurance agent can use to place a professional liability risk.

Though offering E&O and professional liability coverage might require some extra effort, connecting with the right provider can help make this a profitable and enjoyable part of your insurance offerings.
John Torvi is the Vice President of Marketing & Sales at the Herbert H. Landy Insurance Agency of Needham, MA.  John has been in the insurance industry, focusing on the needs of business owners, for almost 25 years. He holds a Bachelors Degree from Providence College and a Masters Degree from Springfield College and is a frequent speaker and contributor to professional journals and conferences for the legal, accounting, real estate and insurance industries.

The Landy Agency is a national leader in providing professional insurance services for attorneys, real estate professionals and accountants. John can be reached at 781-292-5417 or [email protected].  Or visit www.landy.com for more information.

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