Errors & Omissions (E&O) Insurance Flashcards
___ offers protection from claims made by clients, customers, and consumers.
Errors & Omissions Insurance
___ has the duty to determine what level of E&O insurance coverage is necessary to meet the needs of the brokerage office
Sponsoring broker
Office assistants and unlicensed brokerage staff are not covered by E&O insurance. True or false?
False
If an E&O claim resulted from China, is it likely that an American licensee’s E&O policy would provide coverage? Why or why not?
Yes, because most E&O policies cover claims resulting from anywhere in the world.
Licensees should be aware that ___ exposure could lead to E&O claims and litigation from outside of the USA
internet
Most E&O policies have ___ that set a payment limit for each claim.
liability caps
There are two basic types of deductible provisions in E&O policies. One applies to each ___, and the other applies to each ___.
1) Error
2) Claim
Limits per error are found in a(n) ___ of an E&O policy
non accumulation clause
All E&O policies have ___ that allow the insurer the right to initiate litigation where the insurer has paid on claims against the policy.
subrogation provisions
Subrogation provisions allow the insurer the right to initiate ___ where the insurer has paid on claims against the policy.
litigation
If an E&O policy includes prior acts coverage, it is generally limited to claims for no more than ___ years.
5
If an E&O policy expires or is canceled and not replaced with a new policy that has ___, licensee must have an extended-reporting-period clause that allows a claim that occurred during the coverage period to be processed against the expired policy.
prior acts coverage
If an E&O policy expires or is canceled and not replaced with a new policy that has prior acts coverage, licensee must have a(n) ___ that allows a claim that occurred during the coverage period to be processed against the expired policy.
extended-reporting-period clause
Most E&O policies have provisions that limit payment to the amount offered in a(n) ___.
settlement offer
If licensee refuses the settlement and the subsequent trial judgement is higher than the settlement offer, who will be liable for the payment amount in excess of the settlement offer, as well as the defense costs of the trial?
The licensee
Involvement in areas that don’t require a real estate license such as property development or insurance agency operations are always covered by E&O insurance. True or false?
False
Bankruptcy and workers compensations claims might be ___ from E&O insurance.
Excluded
If coverage for bodily injury, property damage, and personal injury are not covered by E&O policy, sponsoring broker should ensure that these things are covered either by ___ or ___.
special endorsement or Commercial General Liability (CGL) insurance
A legal standard that holds a licensee to the highest ethical standards
Fiduciary standard
Mishandling money during transactions may result in what type of claim?
E&O claim
Making misstatements about material facts or misrepresenting the size/dimensions of a property may result in a(n) ___ claim
E&O claim
An E&O claim may be filed for disclosure of confidential information. True or false?
True
Undisclosed dual agency could result in a(n) ___ claim.
E&O
Failure to identify the real or personal property in a contract is a common…
E&O claim
Mistakes regarding property index number (PIN) for subject property is a common…
E&O claim
Violations of the Fair Housing Act and IL Human Rights Act could result in a(n)…
E&O claim
___ determines if E&O policy adequately addresses what services are covered, person(s) are covered, damages are covered, defenses are covered, and territory is covered
Sponsoring broker
The phrase ___ typically refers to services that require a person to have an IL real estate license in order to perform those services on behalf of clients, customers, and consumers.
professional real estate services
A prerequisite for E&O insurance coverage is that licensees must possess all valid necessary ___ or ___ at the time of the act or commission giving rise to the claim, and must be acting in terms of the ___.
Must possess all valid necessary LICENSES or CERTIFICATIONS
Must be acting in terms of the EMPLOYMENT AGREEMENT
