Frequently Asked Questions

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 $1,000,000 or $2,000,000 individual aggregate. This protects the group from having the aggregate eroded by an individual.

The policy aggregate limit is $15,000,000

*The aggregate limit will increase as needed based upon enrollment.  This is for your protection.

What if I want to cancel this policy?

The premium is fully earned when you bind coverage. Premiums are not refunded. You will have coverage until the policy period expires.

Does this policy cover series 6 and / or 7 activity?

You can choose to have your series 6 activity covered. This is coverage option 2. Coverage for series 7 activity is not offered. 

Does this policy cover series 65 activity?

Series 65 is Investment Advisory activities and that activity is NOT covered under this program.

Who is an Insured under the program?

(Any entity not named in this proposal, may not be an insured entity. This may include partnerships and joint ventures.)

• 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 those operations of the business entity related to the 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, solely while acting by or on behalf of an Insured Agent/Rep as long as they work solely in that capacity and do not produce or sell insurance.

What type of policy is this?

This policy 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 report immediately to Markel American Insurance Company, in written form along with supporting documents, in order to be recognized by your E&O carrier. Additionally, you must 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.

What activities are covered under this policy?

Sale or attempted sale or servicing of:

• Life Insurance
• Accident & Health Insurance
• Long Term Care Insurance
• Disability Insurance
• Fixed Annuities
• Employee Benefit Plans, Individual Retirement Arrangements, IRAs and KEOGH Retirement Plans (see below)
• Administration of Employee Benefit Plans (see below)
• Variable Products (optional)
• Mutual Funds (optional)
• Financial Planning incidental to the sale of the above products

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 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.

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 incidental\ advice given in conjunction with covered Financial Services.

Does the policy cover business placed with a carrier rated less than A? Is insolvency covered?

This policy covers errors and/or omissions made by the Agent, regardless of the carrier rating however if a claim arises from insolvency, the claim would not be covered under this policy unless it was rated an B+ or higher at the time the policy was written. 

What do I need to do to get a "consultant" endorsement on my E&O insurance? Some states require this on E&O, an "insurance consultant endorsement."

You are covered for your sale and service of life products as well as the financial planning advice given in relation to these activities. If you are consulting for a fee, then this policy doesn't cover that activity. Consulting, or giving advice in conjunction with the sale of a covered product is covered; however, we do not offer a consulting endorsement. You may need to look into a separate policy for that coverage.

Is there an Extended Reporting Period, (ERP / tail) provision?

1. Automatic 60 Day Extended Reporting Period

Upon a Termination of Coverage, the coverage afforded by this policy shall be extended to apply to any Written Claim first made during the period of 60 days immediately following the effective date of such Termination of Coverage, but only with respect to a Wrongful Act taking place prior to the effective date of such Termination of Coverage. This extension of coverage shall not operate to increase or reinstate the applicable limit of liability as set forth in the Declarations for the Policy Period, which shall be our maximum liability for the Policy Period and the Automatic 60 Day Extended Reporting Period, combined.

2. Optional Extended Reporting Period

Upon a Termination of Coverage, a Named Insured shall have the right, upon payment of the appropriate additional premium, an extension of the coverage granted by this policy for any Written Claim first made during the period of 3 years immediately following the effective date of such Termination of Coverage, but only with respect to a Wrongful Act taking place prior to the effective date of such Termination of Coverage.

The additional premium payable by a Named Insured for the Optional Extended Reporting Period shall be equal to two-hundred-fifty percent (250%) of the total annual premium applicable to such Named Insured for this policy. The additional premium shall be deemed fully earned and non-refundable once the Optional Extended Reporting Period becomes effective.

A Named Insured shall not have the right to purchase the Optional Extended Reporting Period if the Insurer has provided insurance coverage to the Named Insured for less than 1 year and/or the Insurer has canceled or refused to renew this policy for non-payment of premium.

A Named Insured’s right to purchase the Optional Extended Reporting Period shall lapse if the Named Insured does not request the extension from the Insurer in writing and pay the additional premium to the Insurer within the later of (i) 60 days after the effective date of the Termination of Coverage, or (ii) 30 days after the Insurer gives written notice to the Named Insured of the amount of the required additional premium.

Please see Section IV on page 10 of 32 of the policy form for additional ERP information.

What is a Data Breach?

"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.

What is a Social Engineering?

“Social Engineering Claim” means a Claim arising from a third party misleading an Agent through a Deceptive Communication, which is reasonably relied upon by an Agent as genuine and results in an Unauthorized Transfer.

“Unauthorized Transfer” means theft, conversion or misappropriation of funds held in a client’s life insurance or other products referenced in the Definition IV.P (Professional Services) by a third party solely because of such party’s Deceptive Communication with an Agent and without knowledge of and actual or implied consent by a client.

“Deceptive Communication” means an electronic, facsimile or written document or telephone contact received by an Agent from a third-party which:

1. directly relates to a life insurance or other product referenced in the Definition IV.P (Professional Services) that is serviced by an Agent on behalf of a client and in which a third party has no legal right or interest;
2. contains a misrepresentation of material fact concerning a client of an Agent, which is reasonably relied upon by an Agent in believing that the document or contact is from his or her client or the client’s authorized representative; and
3. Requests the withdrawal, surrender or transfer of fund held in the client’s life insurance or other product referenced in the Definition IV.P (Professional Services).

Social Engineering Claim?

The Insurer shall pay, on behalf of an Agent, Damages which an Agent becomes legally obligated to pay because of a Social Engineering Claim that is both made against an Agent and reported to the Insurer in writing during the Certificate Period, or as allowed by Section X – Notice Of Claim below, or during an Extended Reporting Period, if applicable, for a Wrongful Act or Interrelated Wrongful Act committed solely in the rendering of or failing to render Professional Services by an Agent, provided:
1. Such Wrongful Act or any Interrelated Wrongful Act occurred on or after the Retroactive Date and before the end of the Certificate Period; and
2. As of the inception date of this Policy as shown in the Master Policy Declarations, or the effective date of the Agent’s enrollment for coverage hereunder as shown in the Certificate Of Insurance, no Insured had knowledge or reasonable basis upon which to anticipate that the Wrongful Act or any Interrelated Wrongful Act could result in a Social Engineering Claim.
3. This coverage is subject to a sublimit of $50,000 per Agent / $50,000 per Agent Aggregate / $500,000 Master Policy Aggregate.

What does Data Breach coverage provide?

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 limit of insurance, 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.

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 enforce 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, or the effective date of coverage in the current policy year.

An insured’s retroactive date shall be the earliest date that he/she/it has been continuously insured, up to his/her/its Coverage Inception Date under this policy, for professional liability coverage (errors and omissions coverage) for the type(s) of coverage provided to said insured by this policy, provided an insured’s retroactive date for a particular type of financial service shall not be earlier than the date he/she/it became authorized, pursuant to license or required registration, to provide that service.

For example, if this policy provides coverage for an insured’s acts both as a life insurance agent and 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.

Am I covered as a Fiduciary Under ERISA?

Please refer to page 16 of the policy form.

Fiduciary Under ERISA

Except as may otherwise be specifically provided by endorsement, the Insurer will not cover claims which arise out of actual or alleged services an Insured performs as a trustee, plan administrator or fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA), the Pension

Benefits Act and the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), including any amendment, regulation or enabling statue pursuant thereto, or any other similar federal, state, or provincial statute, regulation or order issued pursuant thereto.

But this exclusion does not apply to retirement plan design, investment advice and related Securities or insurance purchases or sales by the Insured within the normal

Are punitive damages covered under this policy?

Punitive damages are covered under this policy.