The policy form | Professional liability for insurance agents

ERRORS AND OMISSIONS COVERAGE FORM, CLAIMS-MADE

NOTICE: THIS COVERAGE PART PROVIDES CLAIMS-MADE COVERAGE WHICH PROVIDES LIABILITY COVERAGE ONLY IF A CLAIM IS MADE DURING THE POLICY PERIOD OR ANY APPLICABLE EXTENDED REPORTING PERIOD. PLEASE REVIEW THE POLICY CAREFULLY AND DISCUSS THE COVERAGE WITH YOUR INSURANCE AGENT OR BROKER.

Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered.

Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy. The words "we", "us" and "our" refer to the company providing this insurance.

The word "insured" means any person or organization qualifying as such under Section III – Who Is An Insured.

Other words and phrases that appear in quotation marks have special meaning. Refer to Section VIII –Definitions.

SECTION I – COVERAGE

A. Insuring Agreement

We will pay those sums that the insured becomes legally obligated to pay as damages because a negligent act, error or omission in the rendering of or failure to render professional services“professional services” for others for a fee of the type described in the Declarations, provided always that:
a. The “claim” on account of such negligent act, error or omission is first made against the insured during the policy period and reported to us, in compliance with SECTION VII – CONDITIONS – Item B., as soon as practicable; and Such negligent act, error or omission took place in the “coverage territory”; and Such negligent act, error or omission took place after the retroactive date, if any, shown in the Declarations and before the end of the policy period; and As of the inception date of this policy, no insured had any knowledge of any circumstance likely to result in or give rise to a “claim” nor could have reasonably foreseen that a “claim” might likely be made. For purposes of paragraph 1.a. of SECTION 1 – COVERAGE A. Insuring Agreement, if during the policy period or applicable reporting period under SECTION VI – EXTENDED REPORTING PERIOD, the insured gives written notice to us, in accordance with SECTION VII – CONDITIONS – Item B., of a negligent act, error or omission likely to result in a “claim,” then any “claim” that may subsequently be made against the insured arising out of such negligent act, error or omission shall be deemed to have been made during the policy period or any applicable reporting period hereunder.
We will have the right and duty to defend the insured against any "suit" seeking damages to which this insurance applied. However, we will have no duty to defend the insured against any "suit" seeking damages to which this insurance does not apply. We may, at our discretion, investigate and settle any potential "claim” or “suit" that may result. But:
a. The amount we will pay for damages is limited as described in Section IV – Limits Of Insurance; and

b. Our right and duty to defend ends when we have used up the applicable Limit of Insurance in the payment of judgments or settlements.
No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under SECTION II – SUPPLEMENTARY PAYMENTS.

B. Exclusions

This insurance does not apply to:

Bodily Injury
Bodily injury, sickness, death or disease sustained by any person.
Damage to Property
Page 2 of 8 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Copyright Insurance Services Office, Inc. VPRF 00 01 11 10 o Property damage, physical injury to, destruction of or loss of use of any tangible property, including the loss of use of tangible property that has not been physically destroyed.
Contractual Liability
Any damages for liability of others which the insured has assumed under any oral or written contract or agreement, except that this exclusion does not apply to liability for damages that the insured would have in the absence of the contract or agreement.
Workers Compensation, Employment Injury and Similar Laws
Any obligation of the insured under a workers compensation, disability benefits or unemployment compensation law, or any similar law or any claim arising out of any refusal to employ, termination of employment, employment related discrimination or other employment related practices or policies.
Pollution
a. Any damages which would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.

b. Any loss, cost or expense arising out of
(1) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or

(2) Claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants".
However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority.

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including but not limited to smoke, vapor, soot, fumes, acids, alkalis, chemicals, metals, silica, lead, lead compounds or materials containing lead, radon, asbestos, electromagnetic radiation, waste or any like substances. Waste includes materials to be recycled, reconditioned or reclaimed.

Electromagnetic radiation includes but is not limited to magnetic energy waves, fields or forces generated, produced, distributed, transmitted or maintained by the charges, currents, frequencies, energy or forces of electricity that are generated, flowing or otherwise transmitted through or via the medium, methods and equipment designed to generate, produce, distribute, transport or transmit the electrical charges, currents, frequencies, energy or force.
Criminal Acts Any damages arising out of any dishonest, fraudulent, criminal or malicious act or omission by or on behalf of or at the direction of the insured.
ERISA Any damages arising out of the activities of any insured as a fiduciary under the Employment Retirement Income Security Act of 1974, or any similar provision of any federal, state or local statutory or common law, with respect to an employee benefit program.
Securities Acts Any damages arising out of any violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended or any state Blue Sky or securities law, or any similar state of federal statutes, and any regulations or order issued pursuant to any of the foregoing statutes.
Insolvency or Bankruptcy Any damages arising out of the insolvency, receivership, liquidation, financial inability to pay or bankruptcy of any insured or any other person or organization in which any insured has a financial interest.
War Any damages arising out of, or as a consequence of ware, invasion, acts of foreign enemies, hostilities, civil war, rebellion, revolution, insurrection, military or usurped power, confiscation, nationalization, requisition or destruction of or damage to property by or under the order of any government, public or local authority.
Personal and Advertising Injury Any damages arising out of one or more the following offenses:
a. False arrest, detention or imprisonment;

b. Malicious prosecution;
The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premised that a person occupies by or on behalf of its owner, landlord, or lessor;

Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services; or

or written publication or material that violates a person’s right of privacy; or
Misappropriation of advertising ideas or style of doing business or;
Infringement of patent, copyright, title or slogan.
Non-Monetary Damages Any damages arising out of any claims seeking relief or redress in any form other than money damages.
Non-Compensatory Damages Any punitive and exemplary damages, fines, penalties or multiplied damages.
Fees, Deposits or Commissions Any damages arising out of fees, deposits, commissions or any other charges for the insured’s "professional services".
Other Business Enterprise
Any claims or suits brought by or against: The Insured solely because the Insured is a partner, officer, director, stockholder or employee of any firm or corporation not named in the Declarations.
Warranty/Guarantee Any damages arising out of the breach of any express or implied warranty or guarantee.
Expected or Intended Damage Any damages expected or intended from the standpoint of the Insured.

SECTION II - SUPPLEMENTARY PAYMENTS

We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend:

A. All expenses we incur.

B. Premiums on appeal bonds in any such “claim” or “suit” and the cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have an obligation to furnish any such bonds.

C. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the “claim” or "suit", including actual loss of earnings up to $250 a day because of time off from work.

D. All court costs taxed against the insured in the "suit". However, these payments do not include attorneys' fees or attorneys' expenses taxed against the insured.

E. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. These payments will not reduce the limits of insurance stated in the Declarations.

The following Supplementary Payments are in addition to the Limit of Insurance however, they will end when the Limit of Insurance has been exhausted

F. We will retain legal counsel to represent the Insured and pay up to $10,000 for attorney fees and costs, and court costs resulting from the investigation or defense of a civil proceeding before a state licensing board, peer review committee or regulatory body. The proceeding must arising out of a negligent act, error or omission in the rendering of professional services“professional services” by you on or after the retroactive date and before the end of the policy period.

You must received written notice of the proceeding during the policy period and give us written notice of it during the policy period or within 60 days after the end of the policy period, but in no event later than 60 days after you have been notified by the state authority, peer review committee or regulatory body of the investigation.

SECTION III – WHO IS AN INSURED

A. If you are designated in the Declarations as:

An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.
A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business.
A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers.
An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors.
A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees.

B. The following are also insureds:

Your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" are insureds for:
a. injury:
(1) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business;

(2) To the spouse, child, parent, brother or sister of that co-"employee" as a consequence of Paragraph (a)(1) above;

(3) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (a)(1) or (2) above; or

(4) Arising out of his or her providing or failing to provide professional services“professional services”, except for professional services“professional services” of the type described in the Declarations; or

b. Property damage to property:
(1) Owned, occupied or used by,

(2) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company).
Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this Coverage Part.
Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain ownership or majority interest, will qualify as a Named Insured if there is no other similar insurance available to that organization. However:
a. Coverage under this provision is afforded only until the 30th day after you acquire or form the organization or the end of the policy period, whichever is earlier; and

b. Coverage does not apply to damages that occurred before you acquired or formed the organization; and

c. You must provide us with details on the operation of the entity and respond to all of our requests for information to allow us to determine whether to amend the policy to include this entity. We have sole discretion to determine any terms we may offer to include the new entity and you agree to promptly pay any additional premiums we determine necessary to add the entity.

No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations.

SECTION III IV – LIMITS OF INSURANCE

A. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of:

Insureds;
“Claims” made or “suits” brought; or
Persons or organizations making “claims” or bringing "suits".

B. Our total liability for damages as a result of all “claims” covered under this Coverage Part shall not exceed the amount stated in the Declarations as Aggregate Limits.

C. Subject to the above provision respecting Aggregate Limits, our liability for damages as a result of any one “claim” covered under this Coverage Part shall not exceed the about stated in the Declarations as Limit of Liability Per Claim.

D. The Limits of Insurance for this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance.

SECTION V – DEDUCTIBLE

The amount stated in the Declarations as Aggregate Deductible is the total amount of damages you shall pay on all “claims” covered under this Coverage Part.

Subject to the above provision respecting Aggregate Deductible, the amount stated in the Declarations as Deductible Per Claim is the amount of damages you shall pay on each “claim” covered under this Coverage Part.

Deductibles under this policy shall not apply to the coverage provided by SECTION II – SUPPLEMENTARY PAYMENTS.

The terms of this Coverage Part, including those with respect to notice of a negligent act, error or omission or notice of a “claim” or “suit” and with respect to our right to investigate and settle any “claim” or “suit,” apply irrespective of the application of any deductible amount.

We may pay part of all of any deductible amount to effect settlement of any “claim” or “suit” and, upon notification of the action taken, you shall promptly reimburse us.

SECTION VI – EXTENDED REPORTING PERIOD

We will offer an Extended Reporting Period, as described below, if this policy is cancelled or not renewed for any reason other than nonpayment of premium or any other amount owed to us.

The Extended Reporting Period does not extend the policy period or change the scope of coverage provided under this Coverage Part. The Extended Reporting Period applies only to “claims” first made against an insured during the applicable Extended Reporting Period for damages because of the negligent act, error or omission that occurred before the end of the policy period and after the Retroactive Date shown in the Declarations.

The Extended Reporting Period does not reinstate or increase the Limits of Insurance.

An Extended Reporting Period is available by endorsement to this Coverage Part for an extra charge.

The Extended Reporting Period will take effect on the effective date of the cancellation or nonrenewal of this policy and will remain in effect for a period of one to three years, depending on which Extended Reporting Period you purchase.

Subject to the terms and conditions of this Coverage Part, the Extended Reporting Period applies to “claims” for damages reported to us, in accordance with SECTION VIII – CONDITIONS – Item B., no later than the end of the purchased Extended Reporting Period.

The additional premium for the Extended Reporting Period is expressed below as a percentage of the annual premium for the last policy period and will depend on which option you choose, as shown below.

Option 1 - 1 Year, 150%

Option 2 – 2 Years, 250%

Option 3 – 3 Years, 350%

We must receive a written request from you, together with payment of the additional premium, within 30 days after the effective date or cancellation on nonrenewal if you wish to purchase the Extended Reporting Period. You must state in your request which Extended Reporting Period you wish to purchase. The Extended Reporting Purchase will not go into effect unless you pay the additional premium when due. Once in effect, the Extended Reporting Period may not be cancelled and the premium for the Extended Reporting Period is fully earned.

The Extended Reporting Period does not apply to claims covered under any other insurance

SECTION VII –CONDITIONS

A. Bankruptcy

Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part.

B. Duties In The Event Of “Claim” Or “Suit” or Negligent Act, Error or Omission

If you report to us a negligent act, error or omission, your notice must include:
(a) How, when and where the negligent act, error or omission took place; and

(b) The names and addresses of any person(s) that may make a “claim”; and

(c) The nature and approximate value of any damages arising out of the negligent act, error or omission.
If a “claim” is made or "suit" is brought against any insured, you must:
(a) Immediately record the specifics of the “claim” or "suit" and the date received; and

(b) Notify us as soon as practicable. You or any other involved insured must see to it that we receive written notice of the “claim” or "suit" as soon as practicable
You and any other involved insured must:
(a) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the “claim” or "suit";

(b) Authorize us to obtain records and other information;

(c) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and

(d) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply.
No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.

C. Legal Action Against Us

No person or organization has a right under this Coverage Part:

a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or
b. To sue us on this Coverage Part unless all of its terms have been fully complied with.

A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative.

D. Other Insurance

Subject to SECTION IV – REPORTING PERIOD, if other insurance available to any insured covers damages that are also covered by this Coverage Part, except for insurance purchased to be specific excess of this policy, the coverage provided by this Coverage Part will apply in excess of all other such insurance. When this policy is excess insurance, we have no duty to defend any “suit.”

E. Premium Audit

We will compute all premiums for this Coverage Part in accordance with our rules and rates.
Premium shown in this Coverage Part as advance premium is a deposit premium only. At the close of each audit period we will compute the earned premium for that period and send notice to the first Named Insured. The due date for audit and retrospective premiums is the date shown as the due date on the bill. If the sum of the advance and audit premiums paid for the policy period is greater than the earned premium, we will return the excess to the first Named Insured.
The first Named Insured must keep records of the information we need for premium computation, and send us copies at such times as we may request.

F. Warranties and Representations

By accepting this policy, you agree:

The statements in the Declarations are accurate and complete;
That the statements made in the application and attachments and any other materials submitted are true and are the basis of this Coverage Part and are considered as incorporated into and constituting a part of this policy; and
That the statements made in the application and attachments and any other materials submitted are representations and that such representations are deemed material to the acceptance of the risk or the hazard assumed by us under this Coverage Part and that this Coverage Part is issued in reliance upon the truth of such representations; and
That in the event that the application, including attachments and any other materials submitted, contains misrepresentations which materially affect either the acceptance of the risk or the hazard assumed by us, this coverage Part in its entirety shall be void and of no effect.

G. Separation Of Insureds

Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies:

a. As if each Named Insured were the only Named Insured; and
b. Separately to each insured against whom “claim” is made or "suit" is brought.

H. Transfer Of Rights Of Recovery Against Others To Us

If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them.

SECTION VIII – DEFINITIONS

1. “Claim” means a demand or assertion of a right. All claims of all persons or entities arising out of the same negligent act, error or omission or a “series of related negligent acts, errors or omissions” shall be treated as a single “claim” and shall be deemed to have been made at the time that the first of those claims is made against any insured; or
2. A written notice received by us from the Insured describing a circumstance likely to result in our give rise to a "claim."

B. "Coverage territory" means anywhere in the world provided the “claim” or “suit” is first brought within the United States of America, it territories and possessions, Puerto Rico or Canada.

C. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker".

D. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document.

E. "Series of related negligent acts errors or omissions" means two or more negligent acts, errors or omissions, including repeated or continuous negligent acts, errors or omissions, that are causally and logically related to the same loss.

F. "Suit" means a civil proceeding to which this insurance applies are alleged. "Suit" includes:

a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or
b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.

G. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker".

H. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or shortterm workload conditions.

I. "Professional services" means the description on the Coverage Part Declarations.

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