The Real Cost of Skipping E&O Insurance During AEP
Why Skipping E&O Insurance During AEP Is a Risky Move
Carrier Requirements That Make Skipping E&O Insurance Risky
Most Medicare carriers require agents to carry active E&O insurance before they can sell products. Skipping E&O insurance during AEP could mean losing access to top carriers—or worse, violating compliance rules that put your license at risk.
Why AEP Increases Your Exposure
AEP is the busiest time of year for Medicare agents. You’re handling dozens of enrollments, answering complex questions, and navigating frequent plan changes. With so much activity, the chance of making a mistake—no matter how small—goes up. That’s why skipping E&O insurance during AEP is especially risky.
The Financial Risks of Skipping E&O Insurance Coverage
Average Cost of an E&O Claim
E&O claims can be expensive. The average claim ranges from $5,000 to $50,000, depending on the issue. Some cases even reach six figures. Without coverage, you’re responsible for paying these costs out-of-pocket.
The NAIC provides regular insights into insurance trends and liability risks, helping agents understand the broader financial impact of claims. Learn more here.
Legal Costs That Come With Skipping E&O Insurance
Even if a claim doesn’t result in a payout, legal defense costs can pile up. Attorney fees, court costs, and settlements can quickly drain your savings. Skipping E&O insurance during AEP leaves you financially exposed.
Common Scenarios That Trigger Claims
Misrepresentation or Incomplete Disclosures
Let’s say a client misunderstands their plan benefits and blames you. If they file a complaint, you could face a claim—even if you did everything right. E&O insurance covers these situations.
Enrollment Errors That Can Lead to Claims When Skipping E&O Insurance
Missing a signature or entering the wrong effective date can lead to compliance issues. These small mistakes often trigger claims. Skipping E&O insurance during AEP means you’ll have no safety net if something goes wrong.
Impact on Your Business and Reputation
Loss of Client Trust
Clients expect professionalism. If they find out you don’t carry E&O insurance, they may question your credibility. One claim can damage your reputation and cost you future referrals.
Carrier Termination Risks from Skipping E&O Insurance
Carriers take compliance seriously. If you skip E&O insurance during AEP and face a claim, you risk losing your contract. That could mean fewer products to offer—and less income.
How ABP Helps You Stay Protected
Discounted E&O Coverage for Agents
Through our partnership with a trusted E&O insurance provider, Agent Benefits Program gives independent contractors access to discounted coverage options that meet carrier requirements, helping you stay compliant and confident during AEP.
Compliance Resources That Help Prevent Claims from Skipping E&O Insurance
We don’t just sell insurance—we help you avoid claims. ABP provides compliance guides, training materials, and best practices to keep your business protected.
FAQs
Q1: What happens if I skip E&O insurance during AEP?
You risk paying out-of-pocket for claims, losing carrier contracts, and damaging your reputation.
Q2: Is E&O insurance required for Medicare agents?
Yes. Most carriers require proof of E&O coverage before you can sell their products.
Q3: How much does an E&O claim cost?
Claims can range from a few thousand dollars to six figures, depending on the issue.
Q4: Does E&O insurance cover compliance mistakes?
Yes, if the mistake falls under your policy terms. This insurance covers many common errors agents face.
Q5: Where can I get affordable E&O coverage?
Agent Benefits Program offers discounted E&O policies designed for independent agents.
Final Thoughts
Skipping E&O insurance during AEP might save you a few bucks upfront—but the long-term risks aren’t worth it. Protect your business, your reputation, and your future with coverage from Agent Benefits Program. Visit AgentBenefitsProgram.com to learn more and get started today.