E&O: What independent Medicare agents need to know

Chris Hidalgo of Gallagher MGA, one of our industry partners, contributed some timely information about errors and omissions insurance, affectionately shortened to E&O, for our blog this week. The majority of the producers we work with concentrate on Medicare, life and related health products, so let’s take a look at professional protection and facts related to these folks to round out Chris’ helpful post.

The $1 million/$1 m Standard Requirement

There were some premature announcements from a few Medicare Advantage carriers earlier this year that indicated mandatory coverage for 2016 would be increasing to $1 million/$3 million. Most plans have walked this back for sole-proprietor agents. However, some agencies and higher level organizations will be required to meet the higher coverage limits, so check with your carriers before the end of 2015.

My preliminary research indicates that the $1M/$1M E&O limits are being accepted by most major health plan carriers for 2016 for independent Medicare agents.

Don’t Over-Insure

What policy types do you need coverage for? I worked last year with one of our affiliated agents who was newly licensed for several product types, including property and casualty. He decided not to venture into the P&C business and to concentrate his efforts in life, health and Medicare coverage, but he unnecessarily purchased E&O coverage that included his licensure for the P&C exposure. This significantly increased his E & O policy premium. Licensure in an area you’ve never dabbled in or wrote any business for does not need protection — it can always be added later if you explore new arenas of the insurance business.

What Coverage Do I Need?
The most basic E&O plan for most of us will cover policies written for life, LTC, accident, health, Medicare Advantage, Medicare Supplemental and Disability Income Insurance. If you have exposure to plans written in past years that are not included in those mentioned above, it would be wise to continue your coverage for those plan types. For example, P&C policies you might have written several years ago could still be subject to an E&O claim, therefore I suggest you keep your protection up to date even if you have exited the Property and Casualty area.

This is where my editor makes me insert a shameless plug for RB Insurance’s special E&O discount offered through Gallagher MGA. Click on the link for quotes and immediate coverage. Feel free to call us at (800) 997 3107 or email me if you have any further questions about E&O — it can be pretty complex. Don’t hesitate to subscribe to our blog for more content written from the agent’s perspective!