- 19,949
OK. What the hell does that have to do with the question?
e and o question
- Thread starter PhxSunsFan
- Start date
- 19,949
As long as the agent had E&O at the time they are covered.
I did ask an attorney about this.
As for your mother, she signed off on whatever the agent told her. And if you were looking out for her then you did too.
We all get surprises from time to time about something in a contract we either didn't understand or didn't read before signing.
There's no legal remedy for that. But you can find a clown attorney and sue anyway.
- 5,337
The only thing that makes me question this is that this would make buying tail coverage from E&O after retiring/selling unnecessary. However, in most PC agents/agencies i have seen retire from captive or sell book, the E&O policy contract only provided coverage for 1 year after without buying the added 3 or 5 years of tail extended coverage. I have seen several agents write checks for $5k-10k to protect themselves for an added 3-5 year period. Their theory for at least PC, was after that period of time the current agent and/or client would be held sonewhat responsible for ongoing review or reading dec sheets sent.
Based on those several dozen experiences i have had that involved at least 3 major E&O carriers contracts, it makes me question what the lawyer told you. Changing E&O carriers can greatly impact prior acts being covered also. Read the prior acts coverage limitations & how long the coverage lasts after a policy ends
Lastly, if it was like the lawyer implied to you & you were sued say in 7 years, would all agents even be able to retrace who the carrier was at the time of the alleged error as E&O carriers change.
Best clarification might be from someone on here that sells a lot of E&O & Professional Liability/Malpractice insurance
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- 19,949
I heard a car I owned several years ago was involved in an accident.
I guess they are going to try and collect from my insurance?
I guess they are going to try and collect from my insurance?
- 5,337
I heard a car I owned several years ago was involved in an accident.
I guess they are going to try and collect from my insurance?
Funny you mention it. It does happen. Some people are too dumb to keep a copy of their title transfer when it sells. New buyer doesnt register title trying to avoid sales taxes & fees. You can be held responsible for damage in hit & run, etc if you cant prove you sold it
If you wreck your car and then sell it, that doesn't relieve you of the liabilty for the damages occured in the wreck.
If you make an error selling someone insurance and then get out of the business that does not relieve you of the responsibility of the error even if it is not disovered until after you got out of the business.
If you make an error selling someone insurance and then get out of the business that does not relieve you of the responsibility of the error even if it is not disovered until after you got out of the business.
Read the part about E&O being a claims made policy. It has to be in force at the time the time the event occured AND at the time the claim is filed.
Errors and Omissions Insurance Requirements | Insureon
Small business owners might need errors and omissions insurance (E&O) to sign a contract or get a license. Get free E&O quotes and buy online with Insureon.
www.insureon.com
Better stick to life insurance sales. You are flat-out wrong about E&O coverage being tied solely to when the "error" was made. E&O coverage for professionals is not the same thing as liability coverage on a car. I've been in business for 39 years, and every E&O policy I ever had made it clear that it is a claims made policy; if the claim wasn't made during the term of the policy, the company would NOT pay; that's why most E&O policies have a "prior acts" clause in them, and will reach back as far as you have had continuous coverage. This is why "tail" coverage is a thing in the E&O world: it covers your tail when you retire and are walking out the door.
As for the hypothetical example I provided about a rogue agent selling my mother an annuity that didn't waive surrender if she were to die during the surrender period . . . that is an EASY lawsuit to win. That agent can be hit with (a) failure to disclose, and (b) suitability, even if he did disclose.
I know what I'm talking about. Yet, just to prove my point, I am providing a link to the NAPA sample E&O policy. At the very beginning of the policy, as in the first two sentences under the title "NOTICE," it plainly states it is a claims made policy, and will cover claims that are, for the first time, made against an agent while the E&O policy is in force. The second sentence makes clear that the policy won't cover any claims that are made after the E&O coverage has ended. On into the policy, it talks about covering claims for prior acts (search for the term), as in things that occurred prior to buying that particular E&O policy. https://www.napa-benefits.org/assets/pdf/policy/nd/lh-eo/nd-lh-eo-02-01-2023_02-01-2024.pdf
Not so easy.
You would have to prove A, and the person who it was explained to is dead. If the agent has documented that they reviewed that part but mom still wanted to buy the policy to get a higher rate (because any product that does that better have great rates) you're toast.
Annuity suitability is rigorously applied at the carrier level in addition to the agent's responsibility. Unless the agent lied on the suitability form or made stuff up, they're probably in the clear.
These products need to be approved by the state. States don't allow products that would lose every lawsuit (which is what you seem to be implying). How would it be suitable for anyone using your example?
You could certainly sue but you'd likely lose.
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If an annuity doesnt waive surrender charges at death, it doesnt automatically charge a surrender charge just because the person died. It would invoke the surrender charge if the policy was a lump sum settlement. most beneficiaries would prefer to spread taxation out at claim time via a 5 year deferral or a payout annuity settlement that almost all carriers offer or a stretch RMD that some carriers offer on NQ annuity. in those situations, the surrender charge isnt necessarily charged from the contracts I have read.
Plus, the buyer of the annuity was able to grow the annuity at a higher rate most times than would have been the case with an annuity that didnt have a surrender charge on a lump sum death claim (similar to an annuity having higher interest crediting if it has no return of premium guarantee for early surrender or no access for 1 year after purchase or interest only access compared to 10% free withdrawal)
Right now, most carriers will issue deferred annuities to age 85 or 90. There is no way most would even manufacture an annuity past age 75 or so if they didnt have contract language about lump sum settlements in relation to surrender charges and/or commission backout for death in early years after purchase. They couldnt cover the costs of issue, investment, commissions on those already past life expectancy ages. It is a trade off the agent/client choose from the many product variations out there.
I personally have never sold one that applied a surrender charge on a lump sum death claim, but I can definitely see why carriers would have to do that & why a client might consider buying one with it because of the difference in interest rates, etc.
very, very few beneficiaries benefit from a lump sum settlement on products that have a decent to large taxable gain.
