Should agents write their own E&O? The conflict that shows up at claim time

Why placing your own coverage feels easy

You know the markets and which ones you have a lot of business with. You have access to all the information needed for a quote, so you can turn it around fast and you even get to earn the commission on it. On a normal day, that sounds like good business sense.

The trouble is that E&O isn't built for normal days. It's built for the day a client alleges you got something wrong. And on that day, who placed your coverage is no longer a convenience question but a loyalty question.

The Insured vs. Insured problem

When you place your own coverage, you sit on both sides of the policy: you're the agent and you're the insured. That's the Insured vs. Insured dynamic, and it gets uncomfortable fast. If you have to argue that a claim is covered, you're arguing against a form you placed, possibly with a market that pays you. The instinct to keep the relationship smooth and the instinct to press hard on your own claim pull in opposite directions.

It gets sharper when the carrier is also a major revenue partner. Picture having to report a claim to the same underwriting team you rely on for appointments and contingency income across your whole book. Do you push for every dollar of defense and indemnity you're owed? Or do you soften it, because antagonizing that market could cost you far more than the claim is worth? That's a question you should never have to ask, and an arm's-length placement means you don't.

A claim scenario worth sitting with

Consider an agency that places its own E&O through its largest carrier partner: the one driving most of its commission revenue. A client sues over an alleged coverage-placement error. The agency now has to file a claim against the same company whose appointment it can't afford to lose. The claims handler raises a coverage question on the form. Pushing back means a fight with a partner that controls a big share of the agency's income. So the agency doesn't push. It accepts a thinner outcome to protect the relationship. The coverage may have been adequate on paper. The willingness to enforce it wasn't.

There's value in having someone else place your coverage

Having your insurance placed through someone else, with no influence over the markets you place your client's business through, removes any conflicts of interest before they can even start. There's no carrier relationship to protect, no contingency check on the line, no reason to want your claim to settle when it deserves to be fought.

A few questions worth sitting with:

1. Who actually placed our E&O, and do they know what they are doing, is this a line they write often or just occasionally?
2. If we had to fight that carrier over a claim, would anyone in the chain hold back?
3. Are we comfortable being both the agent and the insured on the same policy, knowing how that looks at claim time?

If reading your own form makes you uneasy, listen to your gut. The same way an exclusion you didn't know about is the one that bites, a conflict you placed yourself is the one that's hardest to see until you're standing in the middle of it.