CA Insurance Agent E&O

[berbower]

Hello, I have had the same carrier for 9 years and they want to charge me a $200 broker fee because I'm not a member in their association, in past years it was only $100.

I have no claims, one person office, in Central California, and I'm looking for quotes, last year premium was $1m/$2m with full prior acts coverage for $1250.00 + 100 bf= $1350 I'm interested in paying the same. I have financing already.

Please let me know thanks.
Mark Berbower

[mightyquinn]

Bite the bullet and pay the fee. That's one helluva E&O premium for what you have. Everything goes up in time and you can yell all you want about "principle" but that won't solve anything.

[Ardler IIAV]

$1,250 sounds like the "minimum premium" for the E&O carrier. I work with insurance agent E&O and I can say that is a very inexpensive premium.

We do offer specific policy forms for our association members. For non-members, we do charge a "non-member fee". That's just the price to pay to access programs through a state association you are not a member of.

A few things to keep in mind that affect your E&O premium: staff size, revenue and/or gross written premiums, lines of business you work with, plus any ancillary services you might offer (risk management consulting, notary, etc). All of these things can affect your E&O price.

Additionally, you shouldn't purchase E&O based strictly on price. Coverage is what you really want to review and compare. If the premium is too cheap, that usually signals there is very little coverage afforded. The E&O policy helps protect your business - you don't want to skimp on that!

I agree with mightyquinn - go ahead and pay the increased broker fee to continue your coverage.

[Jackm]

You did not specify L&H, P&C or both. In any event, getting a 1mm/2mm policy for under $1,500.00 out the door to you is a good deal, as long as you are not in a Risk Retention policy with a specified maximum payout per all insureds

[mightyquinn]

Terminology is key. Risk Purchasing Groups often have a "bag" of limits where you better file your claims early because when the "bag" of limits runs out there are no more funds to play claims. OTOH Risk Retention Groups issue policies with specified limits and, subject to the financial condition & treaty reinsurance of the RRG, they usually have funds to pay claims. Most RRG's have either no or unfavorable Best's rating however, they often secure another insurer which does have an acceptable Best's rating to "front" their policies. If you do not know if your E&O insurer is an RRG with a "front" it is up to you to ask the question of your carrier or broker. Usually the RRG cedes all or nearly all liability back to the RRG via the fronting agreement so that in the end you are still insured by an RRG.

The bottom line though is that many, if not most, Ins E&O insurers do not cover claims if the subject insurer is a Risk Retention Group so it is not likely that a RRG will write Ins E&O policies. However, it is common for Risk Purchasing Groups to offer Ins E&O coverage.

[insuranceismylife]

We generally offer $1M/$1M for $1,250 + $150bf for P&C agents licensed 3+ years.

If you're really get $1M/$2M for $1,250, then I would say that it's still a good deal even with a $200bf.