separator Errors & Omissions Program Enrollment

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For questions regarding the E&O Program, please contact us.

For more information please see a copy of the E&O policy

Frequently Asked Questions

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Is this a group policy?

This is a group policy. All agents enrolled in the policy share the policy aggregate.

The policy aggregate limit is the maximum amount of money that the policy will pay out in one policy period.

Each agent enrolled in the program has a $2,000,000 or $3,000,000 individual aggregate based on the option selected. This protects the group from having the aggregate eroded by an individual.

The policy aggregate limit is $15,000,000

What if I want to cancel this policy?

The premium is fully earned when you bind coverage. Premiums are not refundable, coverage will continue until the end of the policy period.

Does this policy cover series 6 or 7 activity?

You can choose to have your series 6 activity covered via coverage option 2 which will add coverage for variable life and annuities as well as mutual fund sales. Coverage for series 7 activity is not available through this program.

Does this policy cover series 65 / investment advice services?

Series 65 or Investment Advisory activities are NOT covered under this program. Please contact a Gallagher employee to discuss options for coverage of investment advisory activities.

Who is an Insured under the program?

  • Any Agent/Rep enrolled in the E&O Program
  • Any business entity that is owned or controlled by an Insured Agent/Rep, but only with respect to covered Financial Services provided by an Insured Agent/Rep
  • Any secretarial, clerical, or administrative employees of the Insured Agent/Rep while acting within their capacity as such so long as they do not produce or sell insurance or receive commissions

What type of policy is this?

This is a 'Claims Made and Reported' policy, which means the policy only covers those Claims against you that are both made and reported to the Insurer during the same policy period. Claims made against you must be reported immediately to Everest National Insurance Company, in written form along with supporting documents, in order to be recognized by your E&O carrier. Additionally, you may report incidents or circumstances which may result in a Claim against you, provided (1) you do so while an Insured under this policy and (2) you first become aware of the incident or circumstance during the policy period. You must report all circumstances you reasonably believe will lead to a claim in the policy period that you learn of them, do NOT wait until the next policy period to report them.

What activities are covered under this policy?

Sale and servicing of:

  • Life Insurance
  • Accident & Health Insurance
  • Long Term Care Insurance
  • Disability Insurance
  • Fixed Annuities
  • Administration of Employee Benefit Plans
  • Variable Products (optional)
  • Mutual Funds (optional)
  • Financial Planning incidental to the sale of the above products

Does this policy grant coverage for my prior acts?

Yes, this is called Retroactive Coverage.

Please note that E&O coverage is claims made and reported. That means that the policy in force at the time the claim is made is the policy that will respond to the claim. This policy will cover claims made and reported during the policy period for wrongful acts (or alleged wrongful acts) that occurred after the retroactive date.

Your retroactive date will be the earliest date that you have been continuously insured for errors and omissions coverage for the type(s) of insurance products covered under this policy provided that in any event the date will not be earlier than the date you first became licensed and authorized to perform such product sales.

For example, if this policy provides coverage for an insured’s acts both as a life insurance agent and Series 6 registered representative and the insured has had professional liability insurance coverage for his acts as a life insurance agent continuously since September 1, 1991, but only since June 1, 1996 for his acts as a registered representative, that insured would have the following retroactive dates under this policy: (1) September 1, 1991 for coverage for wrongful acts committed as a life insurance agent; and (2) June 1, 1996 for coverage for wrongful acts committed as a registered representative.

In no event would coverage be available for any products sold or services performed by any individual during a suspension of license or after a license has been revoked, nor for claims alleging that an individual did not maintain the correct license in order to sell or transact the type of business/product at issue.

Does the policy cover claims arising out of tax advice to the clients?

The policy will cover claims against you for rendering tax advice as long as it was strictly incidental and given in conjunction with covered Financial Services. Tax advice given as a separate fee for service would not be covered. In no event would tax preparation be covered under this policy.

Does the policy cover business placed with a carrier who later becomes insolvent?

Claims arising from insolvency are covered under this policy so long as the carrier was rated a B+ or higher at the time the policy was written. 

Does this policy cover "insurance consulting"? Can I get consulting endorsed onto my policy?

You are covered for your sale and service of accident, life, health, annuity, disability, and long-term care products as well as any financial planning advice given in relation to these activities. Consulting or giving advice in regarding a covered product is considered part of your commission based services so long as you are not charging a separate fee for such services or for your financial planning. Any consulting or financial planning provided pursuant to a separate fee will need to be insured on a separate policy.

Is there an Extended Reporting Period (aka tail or ERP) provision?

If an agent retires from the insurance industry, becomes disabled, or has deceased during the policy period then they (or their estate)  can purchase a 3 year Extended Reporting Period ("tail") for 250% of their annual premium. Coverage must be requested within 30 days of the agent's retirement, disability, or death. The ERP will provide coverage starting the day the current policy period expires and will run for three years after the expiration. Any claims based on services rendered after the applicable prior acts date will be covered so long as they are made within the three year period and are based on services rendered prior to the retirement, disability, or death.

What is a Data Breach? What does Data Breach coverage provide?

The Data Breach coverage provided herein should not serve to replace a full cyber/privacy/network security liability policy. This coverage is provided as a courtesy but does not provide full protection from network and cyber risk and should not be considered as evidence of cyber liability insurance.

"Data breach" means the loss, theft, accidental release or accidental publication of "personally identifiable information", or circumstances objectively giving rise to a substantial risk that such a loss, theft, release or publication has occurred.

"Personally identifiable information" means an individual’s social security number, bank account number, credit and debit card account numbers, PIN numbers or transaction history, driver’s license number, medical diagnosis, patient history and medications and any other applicable private information that may be defined by state or federal law.

The carrier will pay for “data breach expenses” that you incur as a result of a “data breach” of “personally identifiable information”, subject to the data breach sublimit, if the following conditions are met:

  1. The “data breach” occurs after the “retroactive date” and before the end of the policy period;
  2. The insured first becomes aware of the “data breach” during the policy period;
  3. At the time you applied for this insurance you had no knowledge of the “data breach”.
  4. The “data breach” is reported to the carrier as soon as practicable, but in no event later than 30 days after it is first discovered by the insured.
  5. The “data breach” must involve “personally identifiable information” that was held by you or on your behalf in the United States, Puerto Rico and Canada.

"Data breach expenses" includes reasonable:

  1. Notification expenses to notify a person whose "personally identifiable information" was the subject of a breach in compliance of "data breach" statutes or regulations;
  2. Crisis management expenses to perform services by any public relations firm, crisis management firm or law firm to minimize potential harm to the Insured;
  3. Monitoring service expenses to provide victims with credit, fraud, public records or other monitoring alerts for up to one year, if determined to be warranted by us or the service provider.
  4. "Good faith advertising services" to assist in organizing the insured’s media responses.
  5. "Legal and forensic services" to provide reimbursement for the verification of compliance with data breach notification laws. This also provides coverage for the investigation of computer hacking incidents, lost and stolen property, cyber extortion, database fraud and determinations as to whether or not data was accessed.

"Personally identifiable information" means an individual’s social security number, bank account number, credit and debit card account numbers, PIN numbers or transaction history, driver’s license number, medical diagnosis, patient history and medications and any other applicable private information that may be defined by state or federal law.

Sublimits Applicable (Per Agent)

Per Data Breach (Aggregate)   $25,000
Legal and Forensic Services  $5,000
Good Faith Advertising Services   $5,000

Data Breach Deductible (Each Claim) - to match policy level retention

What exactly am I covered for in the sale and/or servicing of Employee Benefit Plans?

You are covered for the sale and/or attempted sale of insurance products for Employee Benefit Plans, IRA's and KEOGH Retirement Plans. In addition, you are covered for your administration of Employee Benefit Plans (consultation with participants in an employee benefit plan in order to explain the provisions of such plan, enrollment, record keeping and filing reports with governmental agencies). There is no coverage for the design or implementation of employee benefit plans or for third party claims administration.

Am I covered as a Fiduciary under ERISA?

You are covered solely as a "fiduciary advisor" as that term is defined in the Pension Protection Act of 2006. This would cover most fiduciary acts you would perform for plans that are not sponsored by the Insured.

Is Premium Financing covered?

The policy contains a $500,000 per claim and $1,000,000 aggregate limit per Agent for claims involving the premium financing of life insurance policies.

Can I get other business entities added as Additional Insureds?

Business entities owned or controlled by Insured Agents or entities for which an Insured Agent is an employee are automatically covered under this policy solely for professional services performed by the Insured Agent. This is called vicarious liability, it is different from additional insured status because the entities are only covered for your actions, not for anything they do without your involvement, even if their actions would otherwise be covered under the policy.

Additionally, vicarious liability is also included for any financial institution that you work in or perform services out of, such as banks and credit unions.

We cannot add ANY other entities outside of the above to this policy. Please note that this is a professional liability policy, landlords, creditors, and other third parties cannot be added as they are not performing professional services.

Are MEWAs or VEBAs covered?

There is no coverage for services provided to multiple employer plans, MEWAs (multiple employer welfare arrangements), VEBAs (voluntary employee benefit arrangements), or self-funded plans.

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