ERRORS and omissions claims are originating from two sources for which many agencies are unprepared: brokers and carriers.
For many years, agents have concentrated on minimizing the odds that their clients would sue them. Generally speaking, they have done a good job addressing this exposure. While more could be done, agencies probably are less vulnerable to client litigation than they've been in the past.
However, it seems agents are facing more E&O claims from the brokers and carriers with whom they work. In the September 2005 issue of American Agent & Broker, Curtis Pearsall, E&O coordinator for Utica Mutual Insurance Co., said companies increasingly are suing their agents when things go wrong. My colleagues who do a lot of E&O expert witness work have told me that approximately 50% of their work stems from such litigation. In my own experience, around 40% of the E&O claims I see involve carriers suing their own agents.
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