Errors and Omissions Flashcards
why is errors and omissions insurance required?
because no matter how competent and careful a broker is, mistakes can happen. if a broker or agent makes a mistake, they may be held legally responsible for their negligence
what is characteristic of an errors and omissions policy?
a large deductible, which is in place to encourage the development of sound risk management practices to prevent claims from happening, and the policy might also provide for defense costs
what is another situation in which errors and omissions insurance would be needed?
to protect an insured from claims arising from a failure to render professional services
what is an important reason why errors and omissions insurance is needed?
to be in compliance with regulatory requirements. all holders of a general insurance agents’ certificate of Authority must provide a financial guarantee in the form of an E&O insurance policy
business must provide coverage of at least ________ a claim to a maximum policy payout for all claims of _______ in a policy year
$500,000 a claim to a max of $2M
what is pricing of E&O claims dependent on?
the amount of staff a business has
more employees, more E&O insurance
what are some common mistakes that would cause E&O claims?
-failure to place covg
-failure to provide covg in a timely manner
-failure to provide correct covg
-inadequate covg recommended
-exclusions, limitations, restrictions, special limits or warranties are not explained to the client
