E&O Agency Coverage

[indienoise]

So I know I've asked a million other questions, but here's another. If I'm starting a scratch agency (P&C only), and initially I'm the only producer, will an individual E&O policy like the E&O for less (I know it has a higher retention) typically work? I will have to establish a business entity with the state, even though I'm the only producer, so I'm unsure if an individual policy would be sufficient?

If I eventually add a second producer, will I then have to change to an agency E&O policy, or will our two individual E&O policies cover our liability? Would there be any liability I'd be leaving myself open to by having individual E&O policies vs. one on the agency?

If it makes any difference on what I might qualify for, I've been licensed for 3 years (correction: 4 years. I didn't realize it's been that long!) but only actively selling insurance for coming up on 2. I read in one thread that they look at when you're licensed, not your sales history. Is that correct?

 

[LTS]

Can I piggyback on the question? If I, as a brokerage owner, provide agency E&O, can sub agents remain 1099 employees or will they have to go W-2.

 

[whitealchemist]

I'm doing a new agency too. What I have gathered from a phone call this morning with progressive is that if the agency is structured as a Sole Proprietor, then yes you can use an individual policy from Napa or E&O for less. If your business is structured as a corporation or LLC then the agency with more than one producer, the business itself will need an e&o policy. If you do have agents that you 1099, they can still be covered under your agency's e&o policy.

I did have to edit, because I found out that the personal e&o policy from NAPA allows you to file a DBA; which I did for my LLC. It is still a personal policy, but since I'm the only producer it's no big deal.