Agents Should Know Common Exclusions in Their E&O Policies (2024)

FAQs

What are common exclusions in an insurance agent E&O policy? ›

insured - E&O insurance policies typically exclude claims between two parties who are insured under the same policy. Dishonest, criminal, fraudulent or malicious acts. Bankruptcy or insolvency of any party. Liability of others assumed under contract.

E&O insurance doesn't cover claims for property damage, bodily injury, workplace injuries, data breaches, intellectual property violations, or criminal acts such as fraud.

Ownership exclusion means that the policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.

The three major types of Exclusions are: Excluded perils or causes of loss. Excluded losses. Excluded property.

For example, general liability policies generally exclude product liability coverage for bodily injury or property damage caused by goods you make or sell.

An exclusion is a provision within an insurance policy that eliminates coverage for certain acts, property, types of damage or locations. Things that are excluded are not covered by the plan, and excluded costs don't count towards the plan's total out-of-pocket maximum.

The major exclusions include nuclear liability, physical harm to the policyholder, injury to people who are eligible for workers' compensation, and damage to property under the care of the policyholder (except for explosions, smoke, or fire).

Professional Liability insurance, also known as Errors and Omissions (E&O) coverage, is designed to protect your business against claims that professional advice or services you provided caused a customer financial harm due to actual or alleged mistakes or a failure to perform a service.

To prevent this scenario, minimize the number of agents working with the same client. Fewer people means fewer breaks in communication where errors could occur. In addition, have the client and the agent double-check their information to ensure everything is as it should be.

What is an example of an error and omissions claim? ›

Real estate agent forgetting to include important details about a home. The buyer files a claim against your real estate firm for negligence. Marketing consultant providing advice that caused your client to lose money on their product or service. They file a claim against your marketing company as a result.

Errors and omissions insurance (E&O), also known as professional liability insurance, often includes two types of policy limits. The aggregate limit is the total amount your provider will cover for the policy term (usually one year). The per occurrence limit is the amount your provider will cover in a single claim.

Standard homeowners insurance does NOT cover damage caused by flooding, earthquakes, termites, mold, or normal wear and tear.

Common examples of insurance policy exclusions include intentional acts, wear and tear, nuclear hazards, war, and governmental action.

An exclusion occurs when the Assessor does not reassess a property upon change in ownership or completion of new construction as generally required under Proposition 13. Exclusions are enacted by constitutional or statutory provisions in the California Revenue and Taxation Code.

Insurers will not cover claims if the insured acted intentionally. If a professional knowingly provides bad advice or knowingly deceives their client, for example, and the client sues, their professional liability policy will not cover legal fees, settlements, or other related costs.

Expense incurred on rehabilitative treatment i.e. treatment to restore an individual's health to normal after an addiction or illness is a standard exclusion. In the same vein, any treatment to address a spiritual/ emotional need remains an exclusion.

An umbrella policy generally does not provide coverage for: your injuries or damage to your personal property. a criminal or intentional action causing damage to someone else. liability you assume under a contract.

Typical exclusions will include liability for injuries covered by other policies, such as injuries to your own employees and liability for activities not really a part of your business, such as playing on the company softball team.