Should I consider second E&O Policy

[Norwayguy]

Okay,

I am required by my B/D to carry their E&O policy to the tune of $1200 per year with a Rep deductible of $5000, My concern is that if a group of reps with no relationship to me get hit for the annual limit of the policy then I have a claim after the limit is hit that I would have no coverage. Okay so I think about getting my own E&O coverage but I'm no sure if there would be coordination of benefits and if I would just be wasting my money. Does anyone know the answers to this.​

 

[Steve]

Read your policy. I'd bet your limit is for you as an individual, no matter what happens to other reps through the same b/d. But I've been known to make bad bets...

 

[bobson]

Okay,

I am required by my B/D to carry their E&O policy to the tune of $1200 per year with a Rep deductible of $5000, My concern is that if a group of reps with no relationship to me get hit for the annual limit of the policy then I have a claim after the limit is hit that I would have no coverage. Okay so I think about getting my own E&O coverage but I'm no sure if there would be coordination of benefits and if I would just be wasting my money. Does anyone know the answers to this.​

You my friend are wise. I bet, unlike Steve, that you are seeing things correctly. The E&O policy will have an annual aggregate limit for the entire BD. If that limit is used up before your claim, you will be SOL.

But double check with the E&O policy as I have never read one that covers a BD.


As far as coordination of benefits... my guess is that your own policy would pay after the limits of the BD policy were exhausted. I'm not taking a bet on that though.

 

[Steve]

The E&O policy will have an annual aggregate limit for the entire BD. If that limit is used up before your claim, you will be SOL.

You may be right, but then my question is: "Why would the broker/dealer require this inadequate policy instead of simply requiring each rep to have "x" levels of coverage?"

Read the policy!

 

[Norwayguy]

I Guess I'm going to ask NAPA about how a second policy would pay because I am write about the aggregate from the declaration page

Item 3 Limit of Liability

A Coverage A3 1 mil each loss including defense cost
5 mil aggregate for all loss including defense
cost

skipping to coverage C

C Policy Aggregate
5 mil for all loss (including defense cost)
arising from all claims under this policy in
Aggregate

So I already know this is more to cover the B/D then it is to me, I was just wondering if there would be coordination of benefits.

 

[Steve]

But who is the named insured? The b/d and all reps, or you? If you are the only named insured on the policy, it's reading as an aggregate of 5 mil. for you. Isn't it?

 

[Norwayguy]

No in this case its a policy covering the B/D and the reps so the 5mil is aggregate of all claims against B/D and Reps

 

[Steve]

Thanks. It's hard to guess without seeing. I just wanted to make sure you were on the right track.