Should I consider second E&O Policy

Jun 20, 2008

  1. Norwayguy
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    Norwayguy I have spent way too much time here.

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    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.​
     
  2. Steve
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    Steve Super Genius

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    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...
     
    Steve, Jun 20, 2008
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  3. bobson
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    bobson Guru

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    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.
     
    bobson, Jun 20, 2008
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  4. Steve
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    Steve Super Genius

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    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!
     
    Steve, Jun 20, 2008
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  5. Norwayguy
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    Norwayguy I have spent way too much time here.

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    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.
     
  6. Steve
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    Steve Super Genius

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    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?
     
    Steve, Jun 20, 2008
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  7. Norwayguy
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    Norwayguy I have spent way too much time here.

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    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
     
  8. Steve
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    Steve Super Genius

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    Thanks. It's hard to guess without seeing. I just wanted to make sure you were on the right track.
     
    Steve, Jun 20, 2008
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