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3 Reasons You Need E&O Insurance

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By Cornerstone Staff

Financial Services State Licensing Specialists

11/23/2016

Filed under Licensing

Errors & omissions (E&O) insurance is designed to protect a company in the event of a lawsuit stemming from their normal business activities. Also known as professional liability insurance, E&O coverage is especially important in the highly litigious collections industry. Many debtors file lawsuits against collection agencies under the federal Fair Debt Collection Practices Act (FDCPA), or other similar state laws.

Some of the highlights of E&O coverage:

  • Tailored to the needs of the ARM industry
  • Coverage for claims under the FDCPA, FCRA and similar laws
  • TCPA defense coverage with option to purchase TCPA indemnity
  • Mutual choice of defense counsel
  • Coverage for contingency work or collection of owned debt
  • Defense coverage for regulatory claims
  • Excellent financial rating from A.M. Best
  • Optional network security coverage endorsement
  • Option to purchase crime/employee theft coverage

Our expertise in this class of business allows us to identify and vet insurance markets that a standard agent might not use." -Matt Pridemore, Cornerstone Support

Here are 3 reasons you need to make sure you have E&O Insurance:

  1. For Protection: Mistakes can carry high price tags in this industry, and making multiple mistakes within a single account could add up to hundreds of thousands of dollars in personal liability – potentially leading to the death of your business. E&O Insurance provides protection in the event you lose a lawsuit in court. You avoid being personally liable for the direct and indirect financial costs resulting from your error or omission.
  2. To help manage the claim-settlement process: Having a claims adjuster on your side can be an enormous time saver.
  3. Reduce stress and worry: Should you get sued, you don't have to stress with E&O Insurance on your side. You'll sleep easier at night and have more time and energy to spend working on your business rather than hassling with a customer complaint or lawsuit.

FDCPA lawsuits are rising every year. Even frivolous claims cost money to defend, and an E&O policy is a critical safety net for your business.

Collectors and debt buyers have been hurt by rising insurance premiums and coverage restrictions for years. That's why we spend the time shopping the entire insurance market and give you a clear picture of your choices.

Let our insurance team know if you'd like a free quote or policy review to make sure you have solid coverage at a fair price!

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