An exclusive Insurance Journal survey reported that errors and omissions (E&O) policies have increased for more than three-quarters of US insurance agencies. Furthermore, almost 58 percent of agencies expect their premiums to go up again in 2007.

Ouch.

According to David Duncan of David C. Duncan Insurance Services, his E&O policy was his "first or second highest" startup cost. He reported paying around $2,500 per year to maintain his policy.

IJ surveyed nearly 460 agency principals in 43 states; of those respondents, over 77 percent said their E&O premium had risen in the last three years. The hikes are pretty notable according to IJ, whose survey showed one quarter of respondents experiencing rate increases of more than 20 percent. 16 percent said their E&O rates increased between 6 and 10 percent.

The good news, according to Assistant VP of E&O Operations, is that the E&O market seems to be "softening."

"There are some new players coming in; there are some players being aggressive. Pricing seems to be softening. I think what you're seeing right now is availability is going to increase and pricing is going to decrease."

So if you're currently feeling the pinch of E&O coverage...hang on. Relief may soon be on the way.

[Related articles]:

Starting Your Own Insurance Agency [InsureMe Agent Resource Center]
Legal Issues Facing Insurance Agents [InsureMe Agent Resource Center]

*Bonus link: The InsureMe Insurance Blog Wrap-Up for 10.13.2006
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