Starting an independent insurance agency comes with many decisions, and securing the right coverage is one of the most important. This guide will help agency owners understand which policies they need, how to budget for them, and how to access the best coverage options. Many new agency owners assume they must have insurance before launching, but that’s not always the case. Knowing what coverage is essential and how to obtain it can make the process more manageable.
If you’re considering going independent, here’s what you need to know about essential insurance policies, how to access them, and how to budget for them.
Key Insurance Policies for Independent Agencies
- Errors & Omissions (E&O) Insurance – Required by Carriers
- E&O Insurance is essential for independent agencies because carriers require it to do business. It protects against claims of negligence, errors, or omissions that could lead to costly lawsuits. This is typically the most expensive coverage.
- Cyber Liability Insurance – Increasingly Important
- Handling client data means exposure to cyber threats. Cyber liability insurance protects against data breaches, ransomware, and cyberattacks, which are ever-changing risks in the digital age. Standalone coverage is recommended over add-on policies for better protection.
- Business Owners Policy (BOP) – Protects Property & Liability
- A BOP provides general liability and property coverage, filling gaps not covered by a homeowner’s policy if you run your business from home. This coverage helps protect business assets and provides additional liability protection.
- Workers’ Compensation Insurance – Required if You Have Employees
- State regulations require workers’ compensation coverage for employees. If your agency has staff, this policy is necessary to cover medical expenses and lost wages in the event of a work-related injury.
- Hired & Non-Owned Auto Insurance – Covers Business-Related Driving
- Even if you don’t own company vehicles, this coverage protects against accidents involving personal or rental vehicles used for work; it’s an important policy for liability protection.
Accessing the Right Insurance at the Best Rate through an SIA of NC Partnership
- SIA of NC partners with PIA of North Carolina to assist startup and existing agencies in obtaining E&O coverage.
- Through SIAA, members gain access to multiple partners offering E&O & Cyber Liability that is unique to SIAA members.
- With over 30 Strategic Partners, SIA of NC has access to multiple carriers that specialize in insuring all aspects of your business beyond E&O and Cyber Liability.
How Much Should You Budget for Independent Agency Insurance?
- For a new independent agency, expect to budget $2,000 to $3,000 in your first year.
- Most policies offer payment plans, so agencies do not need to pay the full amount upfront.
Final Thoughts: Protecting Your Agency’s Future
Having the right insurance is crucial for protecting your agency’s future. This Insurance Coverage Guide for Independent Agencies outlines the essential policies every agency owner should consider, from E&O and cyber liability to BOP and workers’ compensation. Understanding your coverage needs and budgeting accordingly will help you make informed decisions that protect your business. For more information on obtaining the right insurance for your agency, contact SIA of NC today.
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