Key Takeaways
- E&O claims average $20,000-$50,000 per incident, with catastrophic claims exceeding $500,000—making prevention the highest priority.
- Documentation is the single most effective E&O prevention tool: if it is not documented, it did not happen.
- Decision gates at 200 policies (first hire), 400 policies (first producer), and 500 policies (commercial expansion) prevent premature scaling.
- Five risk categories—E&O, carrier, regulatory, market, and operational—require systematic mitigation strategies.
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Test Your Knowledge
1.What are the three primary risk categories for an insurance agency?
2.What is the recommended E&O coverage limit for an insurance agency?
3.What is the most effective E&O risk mitigation practice?