Although many agencies may have responded to the soft market and recession with cutbacks in some areas, survey results suggest that agency E&O wasn't one of them. Only 17 percent of respondents reported changing their E&O coverage over the past year, while almost 80 percent did not.

Of the agencies and brokerages that did change coverage, 60 percent switched insurers, 24 percent increased coverage and only 3 percent decreased coverage.

Other changes included removing coverage gaps, increasing deductibles, reducing annual premiums, and merging with agencies that already had their own E&O coverage.

Coverage providers ran the gamut, from traditional insurers admitted in state of licensure (72 percent), surplus lines insurers (16 percent), and self-insured or captive risk transfer plans (1 percent). Respondents also obtained coverage from carrier home offices, bank holding companies and association programs.

Insurers, too, are evidently wary of liability. Almost 80 percent of respondents said they were required to have written agency agreements with some insurers, and 40 percent of those agreements included hold harmless/indemnity provisions requiring the agency to defend/indemnify the insurer for agency errors if both insurer and agency are sued.

Risk prevention and good business practices kept most respondents from facing an agency E&O lawsuit. Only 20 percent reported having been involved in E&O litigation in the past three years.

The primary subject of the litigation was alleged errors and omissions of professional services (90 percent), with 3 percent facing charges related to unfair firing, employee discipline or discrimination. Other litigated disputes included insurance coverage disputes and broker libel claims.

While only 6 percent of these cases actually went to trial, these tended to be drawn-out affairs: 43 percent reported the trial process, from start to finish, lasted seven-to-nine months, while 57 percent reported "other," with some cases going on from 18 months to six years.

To see the complete survey results, go to http://bit.ly/bRRyj0.

Laura Mazzuca Toops is Editor of American Agent & Broker, part of Summit Business Media's P&C Magazine Group, which includes National Underwriter.