E&O program

Frequently Asked Questions

Most typical questions and answers about the E&O program

  • What is Claims Made & Reported Coverage?

    The policy provides coverage for claims that are made against the Named Insured and reported to Lancer Claims Services during the Certificate Period. The Wrongful Act must also have occurred on or after the agent's Retroactive Date in order for coverage to apply.
  • What is my Retroactive Date?

    Your retroactive date is the date on which you became continuously insured without interruption under any claims made life insurance agent's professional liability policy (subject to written proof of such coverage at the time the Insured gives written notice to us of a Claim under this Master Policy.) Note, a break in continuous insurance (or gap) can cause claims to be denied.
  • What is the limit of liability?

    Each enrolled agent has an annual $1,000,000 per claim and $2,000,000 annual aggregate for all claims in a certificate period. These amounts include defense costs. Note: this is group policy with an annual aggregate limit of liability of $15,000,000 shared by all participants. If this limit were to be reached, there would be no payment for claims exceeding that amount. The policy aggregate is not applicable to agents in New York.
  • Does the policy cover claims expenses?

    Yes, defense costs are covered pursuant to the terms and conditions of the policy and subject to the limits stated above. Note, defense costs erode the limits.
  • Are refunds available?

    No, all amounts paid are fully earned. If you have any questions, please contact CalSurance.
  • What am I covered for?

    Please review the policy for complete terms, conditions and exclusions.
    Coverage:
    • The carrier will pay on behalf of the Insured the Loss in excess of the applicable retention that the Insured becomes legally obligated to pay as a result of a Claim first made against the Insured during the current Certificate Period or the Extended Reporting Period, if exercised, and reported to us pursuant to Section VI — Conditions (A. Notice) of the policy form for a Wrongful Act committed on or after the Retroactive Date and before the end of the Certificate Period in rendering or failing to render Professional Services.
    • If a Claim is made against the Insured within the United States of America, its territories or possessions or Canada, the carrier shall have the right and duty to defend any Claim covered under this policy, even if such Claim is groundless, false or fraudulent. The carrier's duty to defend any Claim shall cease upon exhaustion of the applicable Limit of Liability.
    • Coverage is on 'Claims Made & Reported' basis, which covers Claims first presented to an Insured Agent/Rep and reported to the Insurer during the Policy Period.
    • Coverage extends to an Insured Agent's business entity but only with respect to those operations of the business entity related to the covered Professional Services provided by an Insured Agent.
    • Coverage extends to licensed & unlicensed administrative staff for their activities in support of an Insured Agent, as long as they work solely in that capacity and do not produce or sell insurance.
    • Coverage for Prior Acts is provided back to the date the Insured Agent maintained continuous Errors & Omissions insurance coverage. However, the policy excludes any Claim arising out of any Wrongful Act occurring prior to the inception date of the policy if the Insured knew or could have foreseen that such an act might be the basis of a Claim or suit. Evidence of continuous Errors & Omissions insurance is required at the time an actual Claim or incident is reported.
    • Claim Expenses are part of and not in addition to the applicable Limit of Liability, and the payment of Claim Expenses reduces such Limit of Liability.
    • Coverage extends to the sale and/or servicing of individual and group Life, Accident & Health, Disability, Long Term Care Insurance, Employee Benefits Plans and Individual and Group Retirement Plans. Options are available to include coverage for Fixed/Indexed Annuities, Variable Products and Mutual Funds.

Definitions

Agent or General Agent, whether used separately or together, means
  1. a natural person:
    1. who has met the criteria contained in the application for coverage;
    2. has paid the applicable premium; and
    3. whose enrollment is on file with the Named Insured.
  2. any
    1. corporation, partnership, or other business entity owned or controlled by such natural person referred to in 1. of this definition, but solely with respect to the liability of such entity as it arises out of the rendering of or failing to render Professional Services by an Insured Agent or General Agent, as defined in 1. of this definition.
    2. natural person who is a life insurance producer for any insurance company provided such natural person also qualifies under paragraph 1. of this definition.
Certificate of Insurance means the document issued by us to the Named Insured during the Policy Period pursuant to this policy, which evidences the coverage terms, limits, premium and endorsements applicable to the Insureds under this policy.
Certificate Period means with respect to the Named Insured the period of time between the inception date shown on the Certificate of Insurance and the effective date of termination, expiration or cancellation of the Certificate of Insurance issued to the Named Insured.
Claim means:
  • a written demand against the Insured for monetary damages, including a written demand that the Insured toll or waive a statute of limitations; or
  • a civil adjudicatory or arbitration proceeding against the Insured for monetary damages commenced by the service of a complaint or similar pleading;
brought by or on behalf of or for the benefit of any Client for a Wrongful Act in rendering or failing to render Professional Services, including any appeal therefrom.
Insured means, with respect to coverage afforded by a Certificate of Insurance:
  • the Named Insured listed in such Certificate of Insurance;
  • any corporation, partnership, or other business entity owned or controlled by such Named Insured, solely with respect to the liability of such entity as it arises out of the rendering of or failing to render Professional Services by such Named Insured;
  • An Agent, General Agent or Registered Representative of the Named Insured.
  • any natural person who is a former or current secretarial, clerical or administrative employee of the Agent, General Agent or Registered Representative but solely for services performed within his or her capacity as such and on behalf of such Named Insured or entity, provided such natural person did not receive any commission income pursuant to an Agent, broker or Registered Representative contract with any insurance company or Borker/Dealer as a result of providing Professional Services offered by the Named Insured or such entity.
Loss means the total amount the Insureds become legally obligated to pay on account of covered Claims made against them, including, but not limited to, damages, judgments, settlements, Claim Expenses, or any award of pre‐judgment and post‐judgment interest with respect to covered damages. Loss does not include any of the following:
  • any amount for which the Insured is not financially liable or is absolved from payment by reason of any covenant, agreement or court order;
  • taxes, fines or penalties imposed by law;
  • any amount incurred by the Insured to comply with injunctive or other equitable relief or any agreement to provide such relief;
  • punitive damages, exemplary damages or the multiple portion of multiplied damages; or
  • matters uninsurable under the law pursuant to which this policy is construed.
Named Insured means the Agent or General Agent, or Registered Representative named in this policy's respective Certificate of Insurance and any other person or entity included within the definitions of Agent or General Agent or Registered Representative as applicable.
Policy Period means the period of time shown in Item 1 of the Master Policy Declarations..
Professional Services means:
  • with respect to an Agent or General Agent, to the extent they are provided in the course and scope of such Agent or General Agent’s business as an Agent or General Agent and such Agent or General Agent has the appropriate license in both the Client's resident state or jurisdiction and the state or jurisdiction in which the business is conducted:
    1. the sale, attempted sale or servicing of life insurance, accident and health insurance or managed health care organization contracts (that does not require a securities license);
    2. the sale, attempted sale or servicing of disability income insurance (if purchased as indicated on the Certificate of Insurance);
    3. the sale, attempted sale or servicing of indexed/fixed annuities, (if purchased as indicated on the Certificate of Insurance);
    4. services as a Notary Public;
    5. financial planning activities in conjunction with services described in paragraphs (a) through (d) (if purchased) of this definition, whether or not a separate fee is charged; and
    6. the supervision, management and training of an Agent by a General Agent with respect to activities otherwise covered by this Policy.
  • with respect to Registered Representative and only to the extent Professional Services are provided in the course and scope of such Registered Representative’s business as a Registered Representative and such Registered Representative has the appropriate license in both the Client’s resident state or jurisdiction and the state or jurisdiction in which the business is conducted:
    1. the sale, attempted sale or servicing of variable annuities, variable insurance (that requires a securities license) or mutual funds, (if purchased) that are registered with the Securities Exchange Commission, if required, through a Broker/Dealer that is a member of the Financial Industry Regulatory Authority;
    2. financial planning activities in conjunction with services described in paragraph (a) (if purchased) of this definition, whether or not a separate fee is charged.
Retroactive Date means the date, as shown in this policy's respective Certificate of Insurance, in which the Insured became continuously Insured without interruption under any claims made professional liability policy (subject to written proof of such coverage at the time the Insured gives written notice to us of a Claim under this Master Policy.)
The Named Insured and any Insured who is a former or current secretarial, clerical or administrative employee of such Named Insured shall share the same Retroactive Date.
Wrongful Act means any negligent act, error or omission of, or Personal Injury caused by, the Insureds in their capacity as such in the rendering or failure to render Professional Services.