Business Insurance for Claims Adjuster
Why is insurance a must for claims adjusters?
Given your profession, you're well aware of the numerous risks that a small business owner can face. For example, a client lawsuit or injury could financially devastate your company. Claims adjuster insurance can help you recover from lawsuits, medical expenses, and property damage, among other risks.
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6 insurance policies every claims adjuster should consider
These insurance products defend against the most common risks and liabilities faced by claims adjusters.
Errors and omissions insurance
Errors and omissions (E&O) insurance handles claims related to mistakes, poor advice, and professional negligence, should a client decide to sue. It's also referred to as professional liability insurance.
- Disputes over compensation
- Professional negligence accusations
- Errors and oversights
General liability insurance
A general liability insurance policy defends against third-party injury and property claims, such as a client who suffers an injury at your claim adjusting office. It's often required for a commercial lease.
- Client bodily injuries
- Accidental damage to a client's property
- Slander and other advertising injuries
Business owner's policy
A business owner's policy, or BOP, combines general liability coverage and commercial property insurance at a discount. Low-risk small business owners are often eligible for this bundle.
- Personal injury lawsuits
- Business property damage
- Business interruption coverage
Workers' comp insurance
Workers' compensation insurance protects claim adjusting firms and sole proprietors from work-related medical bills that health insurance won't cover. Most states require this coverage for employees.
- Medical expenses from workplace accidents
- Disability benefits for injured workers
- Legal costs from employee injuries
Commercial auto insurance
Almost every state requires commercial auto insurance for vehicles owned by a business. It covers financial losses in the event of a car accident involving your claim adjusting firm's vehicle.
- Auto accident legal fees
- Vandalism or other vehicle damage
- Vehicle theft
Cyber insurance
Cyber insurance helps claims adjusters recover financially from data breaches and cyberattacks, such as a ransomware attack. It's also called cyber liability insurance or cybersecurity insurance.
- Data breach investigations
- Client notification costs
- Fraud monitoring services
Insurance costs for claims adjusters
A large claim adjusting company with several employees will pay more for business insurance than an independent insurance adjuster who works alone.
Factors that insurance carriers consider when underwriting your insurance premiums include:
- Your claim adjusting services offered, including the types of claims you work on
- Number of employees
- Value of your business property
- Types of insurance products purchased
- Coverage limits and deductibles
- Annual revenue
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Common questions about business insurance for claims adjusters
Review answers to frequently asked questions (FAQs) about claim adjusting insurance coverage and more.
Why is errors and omissions (E&O) insurance important for insurance claims adjusters?
Whether your claims adjusting firm is just you, or you employ several professionals, a small work mistake could cost you a lot of money, time, and damage to your reputation.
Should a client lose money because you made an incorrect assessment or missed a deadline, they could hold you liable and sue you for losses. If you don't have the right insurance coverage, you'll be required to pay out of pocket for the legal expenses and possible settlement.
An errors and omissions insurance policy would protect your business from these types of insurance claims related to your business's work performance and help cover legal costs. It can provide coverage related to:
- Work mistakes and oversights
- Missed deadlines
- Breach of contract
This coverage is also commonly called professional liability insurance. While it’s not often required by state law, many clients may want you to have this insurance coverage before they’ll sign a contract with you.
Can you be a claims adjuster without a license?
Claims adjusters are required by most states to have a license to legally operate, though requirements vary by state.
In order to obtain a claims adjuster license, you will need to complete and pass a licensing exam. Pre-licensing coursework is often available to help prepare for this exam. Once you've passed the licensing exam and earned your license, you'll need to fulfill continuing education requirements to maintain your licensure.
In addition, you may have to apply for your business license through your city or county government, or in some cases, you may be directed to a state-level office.
Carrying a business license offers many benefits, including:
- Tax compliance
- Credibility
- Financial benefits and credit
Is a public adjuster the same as a claims adjuster?
No. Although both a public insurance adjuster and insurance claims adjuster review a client's insurance policy and provide an estimate of any damage done, they differ in who they serve.
An insurance claims adjuster works on behalf of the insurance company. On the other hand, a public adjuster works for the client and will advocate on their behalf during and even after the claims process.
What other kinds of insurance should claims adjusters have?
In addition to the policies mentioned above, businesses that offer claims adjusting services often invest in the following types of coverage:
- Electronic data processing (EDP) insurance: This type of coverage helps policyholders recover financially from corrupt or lost data resulting from a power outage, natural disaster, or similar event that affects your computer systems. An EDP policy is often added as an endorsement to a BOP.
- Hired and non-owned auto insurance (HNOA): Claims adjusters who drive personal, rented, or leased vehicles for business purposes should carry this coverage, as a personal auto policy won't cover accidents that happen while you're driving for work.
- Fidelity bonds: Should an employee commit fraud or theft under your business name, a fidelity bond would cover the legal expenses and cost of reimbursing your client. However, your business would have to repay the insurance company for the cost of the claim.
Our licensed insurance agents can help you choose policies that match your insurance needs, help you comply with state laws and other requirements, and also help you save money on coverage.
