Last reviewed: 15 September 2026

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Does your insurance agent carry errors & omissions insurance?

If your agent makes a genuine mistake — recommending the wrong coverage, missing a filing deadline, mishandling your application — errors and omissions (E&O) insurance is what would actually pay for the resulting loss, separate from any policy they sold you. Almost no state requires an agent to carry it. Here's the one clearly-documented exception, and what to ask everywhere else.

What E&O insurance actually covers

E&O insurance is professional liability coverage for the agent or agency itself — it responds when a client alleges the agent's own negligence, error, or omission (not a claim under the insurance policy they sold) caused a financial loss. If an agent fails to bind coverage they said they'd bind, recommends a policy that doesn't actually cover a risk they said it would, or mishandles paperwork in a way that costs you money, E&O is the mechanism that could make you whole for that mistake — assuming the agent actually carries it.

Rhode Island: the clearly-documented mandate

Rhode Island General Law § 27-2.4-23, effective since January 1, 2007, requires every holder of a resident insurance producer license in the state to carry and maintain E&O insurance covering their business activities, in an amount of at least $250,000 per claim and $500,000 in annual aggregate, as a condition of obtaining and keeping the license — and failing to maintain it can lead to suspension or revocation of the license itself. A producer working for a licensed firm can satisfy this through a policy carried in the firm's name that covers each associated licensee, but the coverage itself has to exist either way.

Most other states don't mandate it — so ask directly

Outside of documented mandates like Rhode Island's, most states don't make E&O coverage a licensing condition at all; a producer can be fully, legitimately licensed and appointed without carrying any E&O insurance. Some states instead require an agent to disclose to a client whether they carry it, without mandating that they actually do. Because this varies by state and changes over time, don't assume either way — ask your agent directly whether they carry E&O insurance and, if your state doesn't mandate it, treat that answer as one more real, checkable data point rather than something you need to just take on faith. A "no" doesn't make an agent unlicensed or automatically untrustworthy, since it may not be required where you live — but it does mean that if something goes wrong through the agent's own error, there may be no dedicated coverage standing behind it.