Mortgage Insurance Services
Your Mortgage Protection Leads Provider
Your Mortgage Protection Leads Provider
E&O Coverage
Provided by MGA Insurance Services, Sponsored by PAIS.
In order to enroll, you must be contracted with one of our carriers first!
As an insurance sales agent, your E&O insurance coverage could be your most
important investment. Protecting yourself from the expense of a potential lawsuit or
legal action is critical. MGA Insurance Services is the plan administrator and has
been providing access to outstanding Errors and Omissions insurance programs
since 1989. This plan is secured by an outstanding insurance company. CNA is
rated A (Excellent) by AM Best.
Plan Highlights
Claims-made Financial Services Professional Liability Coverage limited to services
provided as a life/health insurance agent selling life, health, annuities and variable
products
E&O Liability Coverage Options:
Deductibles:
Your coverage is secured by an outstanding insurance company. CNA is rated A
(Excellent) by AM Best.
Payment Options
E&O Plan Options & Rates:
Coverage/Single Payment/ Down Payment*/ Monthly Payment
*Down payment refers to monthly payment option. Prices include E&O premium and
$125 MGA administrative, taxes and marketing fees. Down payments will be
processed immediately; monthly deductions as shown above will begin the third
business day of the month after enrollment effective date. Monthly payment options
includes a $7.50 / monthly collection fee.
COVERAGE OPTION A:
Life, Accident, Health, LTC, including Medicare Advantage and Medicare
Supplements
Life, Accident, Health, LTC, including Medicare Advantage and Medicare
Supplements PLUS Disability
COVERAGE OPTION B:
Life, Accident, Health, Disability, LTC, including Medicare Advantage and Medicare
Supplements, PLUS Fixed Annuities and Indexed Annuities
Life, Accident, Health, Disability, LTC, including Medicare Advantage and Medicare
Supplements, PLUS Fixed and Indexed Annuities, Mutual Funds & Variable
Products
COVERAGE OPTION D:
ENROLLERS COVERAGE ONLY: Coverage for professional enrollers from claims
arising from the enrollment of group benefits and/or life & health products in the
worksite marketing environment.
If you need assistance, please call (877) 524-0265.
Privacy Policy
This privacy notice discloses the privacy practices for www.mga-eo.com. This
privacy notice applies solely to information collected by this web site. It will notify you
of the following:
What personally identifiable information is collected from you through the web site,
how it is used and with whom it may be shared.
What choices are available to you regarding the use of your data.
The security procedures in place to protect the misuse of your information.
How you can correct any inaccuracies in the information.
Information Collection, Use, and Sharing
We are the sole owners of the information collected on this site. We only have
access to/collect information that you voluntarily give us via email or other direct
contact from you. We will not sell or rent this information to anyone.
We will use your information to respond to you, regarding the reason you contacted
us. We will not share your information with any third party outside of our organization,
other than as necessary to fulfill your request, e.g. to ship an order.
Unless you ask us not to, we may contact you via email in the future to tell you about
specials, new products or services, or changes to this privacy policy.
Your Access to and Control Over Information
You may opt out of any future contacts from us at any time. You can do the following
at any time by contacting us via the email address or phone number given on our
website:
See what data we have about you, if any.
Change/correct any data we have about you.
Have us delete any data we have about you.
Express any concern you have about our use of your data.
Security
We take precautions to protect your information. When you submit sensitive
information via the website, your information is protected both online and offline.
Wherever we collect sensitive information (such as credit card data), that
information is encrypted and transmitted to us in a secure way. You can verify this by
looking for a closed lock icon at the bottom of your web browser, or looking for
"https" at the beginning of the address of the web page.
While we use encryption to protect sensitive information transmitted online, we also
protect your information offline. Only employees who need the information to perform
a specific job (for example, billing or customer service) are granted access to
personally identifiable information. The computers/servers in which we store
personally identifiable information are kept in a secure environment.
If you feel that we are not abiding by this privacy policy, you should contact us
immediately via telephone at (877) 524-0265.
Errors and Omissions Insurance Loss Control Center
You may be considering purchasing Errors and Omissions (E&O) Insurance but first
you may want to get a better understanding of what a typical policy covers and how
the policy would help protect you in case of a covered claim. Or you may be looking
for help in reducing your E&O exposure.
Let's get started:
E&O Facts, Figures and Definitions
This section will help you learn more about E&O insurance, your exposure and
definitions of terms
Why E&O Claims Occur
See what really causes E&O claims
Benefits of having Errors and Omissions Insurance
Why do I need E&O Insurance anyway?
Ways to Reduce your Exposure
Provides more information as to how you can reduce your E&O exposure.
E&O Facts, Figures and Definitions
What is errors and omissions insurance?
E&O insurance is a specific form of professional services liability insurance written
for the insurance practitioner. It is also written for many other professions including
mortgage lenders, real estate agents, business consultants and other professionals.
It is important to understand that insurance agent’s E&O insurance specifically
covers you as an insurance agent in the case of an error or omission that is made
while servicing and/or selling insurance products. In most cases E&O insurance is
very specific with regard to the products covered and in many cases, may be
product-line specific.
It is very important for you to understand this, especially if you write multiple lines of
insurance. The MGA Insurance Services E&O products typically cover life and health
products. Most of our plans also cover variable insurance products and mutual funds
(Series 6 activities). They DO NOT cover property and casualty product
sales/servicing, or the sale/servicing of individual stocks, bonds or other investment
vehicles (Series 7 activities).
1 in 7 insurance professionals will be named in some type of E&O claim at some
point in their insurance careers. The average claim is in excess of $18,000, and this
figure does not include the cost of legal representation
All E&O insurance policy forms are referred to as claims-made. In a claims-made
policy, coverage is triggered if a claim is made during the policy period for an error
or omission that occurred after the policy’s retroactive date (prior acts coverage
date).
The retroactive date of inception (R.D.I.) or prior acts coverage date is one of the
most important issues to understand when purchasing E&O coverage. Prior acts
coverage defines just how far back in your professional services career your E&O
coverage will extend. Some plans may offer no prior acts coverage. This means that
you are only covered for E&O claims that arise from activities occurring after your
policy effective date.
A comprehensive E&O plan offers prior acts protection. All of MGA Insurance
Services’s plans offer prior acts coverage beginning with your original date of
continuous E&O coverage. Some of our plans offer unlimited prior acts coverage.
The purpose of an Extended Reporting Period (ERP), commonly referred to as ”tail”
coverage is to provide some degree of E&O protection to an agent who has left the
business, become disabled or retired. Instead of purchasing a new claims-made
policy year after year, an agent can purchase an ERP for usually one to five years.
The ERP does just what you’d think; it allows the agent to extend the period of their
last active policy under which claims may be filed, following the original policy’s
expiration date. An ERP does not cover any new business activities; rather it only
addresses claims that arose after the insured’s prior acts date and before the
termination date of the insured’s last in-force policy.
There are three basic coverage components of a claims-made policy: Prior Acts
Date or Retroactive Date of Inception, an in-force policy and an Extended Reporting
Period (ERP). If available and structured correctly, these three pieces can be
seamlessly combined to provide the comprehensive coverage demanded by an
insurance professional.
It is extremely important that you understand the crucial need to avoid ”gaps” of any
kind in your E&O coverage. If you allow any gap to occur, even a gap of 1 day,
between one policy’s expiration and the next policy’s effective date you could
ultimately lose years of prior acts protection.
back to top of page
Benefits of having Errors & Omissions Insurance
Peace of mind against future claims
Expert professional and legal counsel provided to represent you
Protection for current and future wage earnings
back to top of page
E&O Loss Control — Why Claims Occur
It is important is for you to understand the main reasons that E&O claims occur.
Failure to Document:
As a professional you must be aware of how important documentation is.
Communication between yourself and the client may be the focal point of litigation. If
you have failed to document your communications with the client, in 9 out of 10
cases you will be held liable.
Misrepresentation:
Failure to properly explain policy provisions or unintentionally/intentionally making
mistakes in completing an application for insurance can get an agent sued for
misrepresentation. In the majority of cases, misrepresentation has been alleged, but
there was no actual evidence of purposeful misrepresentation.In cases of intentional
misrepresentation the agent can be found not only liable in civil court, but also found
guilty of fraud. In some occasions, criminal charges will also be filed. Remember
that no E&O policy will cover a case of intentional misrepresentation or fraud.
Inadequate Coverage:
These cases involve allegations of either a total lack of coverage, inadequate limits
of coverage, or failure by the agent or broker to place proper or adequate insurance
for the risk to be insured.
Standard of Care:
The allegations in these claims state that the agent or broker failed to live up to the
acceptable and recognizable standard of care that is a generally accepted practice
within the industry. Unfortunately, since the agency and brokerage business is not
legally classified as a "profession," there are no established rules for professional
conduct such as those established for the medical, dental, and other professions.
For example, the California Insurance Code contains a section that states: "The
purpose of this chapter is to protect the public by requiring and maintaining
professional standards on the part of all persons licensed hereunder." However,
they do not define professional standards, nor do they outline any set of standards.
Unfortunately, this leaves the courts to make decisions regarding what constitutes
"standard of care," based on the judge and jury's inclination at the time.
Breach of Duty:
It is an accepted rule of law that once an agent or broker agrees to undertake a task
such as the placement of insurance, they owe the insured a duty to place that
coverage, if possible. In the majority of cases, the courts will hold the agent
responsible and guilty of breach of duty for failure to fulfill this required. In the
absence of or failure to place the coverage properly or to notify the insured within a
reasonable time that they were unable to place the coverage, the agent/broker has
breached their duty to the insured and can be held liable for the consequences of
the failure to act.
Breach of Contract:
When an agent or broker agrees to undertake some task for an insured and then,
through negligence or carelessness, fails to perform, the agent can be held liable
not only for breach of duty but also for breach of implied contract. In another area,
consider the situation where an agent exceeds their authority under their agent
contract and, as a result of this alleged breach, there is a loss in which the insurance
company is named as a defendant. The company may pay the claim but then turn
around and sue the agent for breach of contract.
Special Relationships:
In this class of action, courts generally hold that as a result of the actions of the agent
and the business relationship over a period of time, a "special relationship"
developed. Courts hold that because of this special relationship, the agent/broker is
held to a higher standard of care in handling the insured's business.
The "L" Syndrome:
Most other claims are classified as ”Lack Of” or the "L” Syndrome causes of loss.
The most common claims issues stem from:
there is also liability assigned under "breach of contract."
E&O Loss Control — Ways to Reduce your Errors & Omissions Exposure
So what can you do to reduce your risk now that you know how many claims occur?
Here are some simple things that you can do to protect yourself.
If you need assistance, please call (877) 524-0265
Provided by MGA Insurance Services, Sponsored by PAIS.
In order to enroll, you must be contracted with one of our carriers first!
As an insurance sales agent, your E&O insurance coverage could be your most
important investment. Protecting yourself from the expense of a potential lawsuit or
legal action is critical. MGA Insurance Services is the plan administrator and has
been providing access to outstanding Errors and Omissions insurance programs
since 1989. This plan is secured by an outstanding insurance company. CNA is
rated A (Excellent) by AM Best.
Plan Highlights
Claims-made Financial Services Professional Liability Coverage limited to services
provided as a life/health insurance agent selling life, health, annuities and variable
products
E&O Liability Coverage Options:
- $1,000,000 per claim / $1,000,000 annual aggregate
- $1,000,000 per claim / $2,000,000 annual aggregate
Deductibles:
- $500 for life, accident, health, LTC, Medicare Advantage and Medicare
Supplement - $2,500 for disability insurance and indexed & fixed annuities
- $5,000 for all other claims (e.g. variable annuities and mutual funds)
- To demonstrate their commitment to you as a dedicated Partners Advantage
agent, Partners Advantage will reimburse all agents the amount of the policy
deductible in the event any of their agents are involved in any claim or E&O
settlement arising from the sale of ANY Partners Advantage product.
Your coverage is secured by an outstanding insurance company. CNA is rated A
(Excellent) by AM Best.
Payment Options
- Make a single payment by EFT or credit card
- Pay monthly by EFT or credit card
E&O Plan Options & Rates:
Coverage/Single Payment/ Down Payment*/ Monthly Payment
*Down payment refers to monthly payment option. Prices include E&O premium and
$125 MGA administrative, taxes and marketing fees. Down payments will be
processed immediately; monthly deductions as shown above will begin the third
business day of the month after enrollment effective date. Monthly payment options
includes a $7.50 / monthly collection fee.
COVERAGE OPTION A:
Life, Accident, Health, LTC, including Medicare Advantage and Medicare
Supplements
- $1M / $1M $520.00 $160.87 $40.83
- $1M / $2M $545.00 $162.92 $42.92
Life, Accident, Health, LTC, including Medicare Advantage and Medicare
Supplements PLUS Disability
- $1M / $1M $545.00 $162.92 $42.92
- $1M / $2M $575.00 $165.41 $45.42
COVERAGE OPTION B:
Life, Accident, Health, Disability, LTC, including Medicare Advantage and Medicare
Supplements, PLUS Fixed Annuities and Indexed Annuities
- $1M / $1M $625.00 $174.17 $49.17
- $1M / $2M $660.00 $177.12 $52.08
Life, Accident, Health, Disability, LTC, including Medicare Advantage and Medicare
Supplements, PLUS Fixed and Indexed Annuities, Mutual Funds & Variable
Products
- $1M / $1M $745.00 $202.50 $57.50
- $1M / $2M $785.00 $205.87 $60.83
COVERAGE OPTION D:
ENROLLERS COVERAGE ONLY: Coverage for professional enrollers from claims
arising from the enrollment of group benefits and/or life & health products in the
worksite marketing environment.
- $1M / $1M $350.00 $134.50 $27.50
If you need assistance, please call (877) 524-0265.
Privacy Policy
This privacy notice discloses the privacy practices for www.mga-eo.com. This
privacy notice applies solely to information collected by this web site. It will notify you
of the following:
What personally identifiable information is collected from you through the web site,
how it is used and with whom it may be shared.
What choices are available to you regarding the use of your data.
The security procedures in place to protect the misuse of your information.
How you can correct any inaccuracies in the information.
Information Collection, Use, and Sharing
We are the sole owners of the information collected on this site. We only have
access to/collect information that you voluntarily give us via email or other direct
contact from you. We will not sell or rent this information to anyone.
We will use your information to respond to you, regarding the reason you contacted
us. We will not share your information with any third party outside of our organization,
other than as necessary to fulfill your request, e.g. to ship an order.
Unless you ask us not to, we may contact you via email in the future to tell you about
specials, new products or services, or changes to this privacy policy.
Your Access to and Control Over Information
You may opt out of any future contacts from us at any time. You can do the following
at any time by contacting us via the email address or phone number given on our
website:
See what data we have about you, if any.
Change/correct any data we have about you.
Have us delete any data we have about you.
Express any concern you have about our use of your data.
Security
We take precautions to protect your information. When you submit sensitive
information via the website, your information is protected both online and offline.
Wherever we collect sensitive information (such as credit card data), that
information is encrypted and transmitted to us in a secure way. You can verify this by
looking for a closed lock icon at the bottom of your web browser, or looking for
"https" at the beginning of the address of the web page.
While we use encryption to protect sensitive information transmitted online, we also
protect your information offline. Only employees who need the information to perform
a specific job (for example, billing or customer service) are granted access to
personally identifiable information. The computers/servers in which we store
personally identifiable information are kept in a secure environment.
If you feel that we are not abiding by this privacy policy, you should contact us
immediately via telephone at (877) 524-0265.
Errors and Omissions Insurance Loss Control Center
You may be considering purchasing Errors and Omissions (E&O) Insurance but first
you may want to get a better understanding of what a typical policy covers and how
the policy would help protect you in case of a covered claim. Or you may be looking
for help in reducing your E&O exposure.
Let's get started:
E&O Facts, Figures and Definitions
This section will help you learn more about E&O insurance, your exposure and
definitions of terms
Why E&O Claims Occur
See what really causes E&O claims
Benefits of having Errors and Omissions Insurance
Why do I need E&O Insurance anyway?
Ways to Reduce your Exposure
Provides more information as to how you can reduce your E&O exposure.
E&O Facts, Figures and Definitions
What is errors and omissions insurance?
E&O insurance is a specific form of professional services liability insurance written
for the insurance practitioner. It is also written for many other professions including
mortgage lenders, real estate agents, business consultants and other professionals.
It is important to understand that insurance agent’s E&O insurance specifically
covers you as an insurance agent in the case of an error or omission that is made
while servicing and/or selling insurance products. In most cases E&O insurance is
very specific with regard to the products covered and in many cases, may be
product-line specific.
It is very important for you to understand this, especially if you write multiple lines of
insurance. The MGA Insurance Services E&O products typically cover life and health
products. Most of our plans also cover variable insurance products and mutual funds
(Series 6 activities). They DO NOT cover property and casualty product
sales/servicing, or the sale/servicing of individual stocks, bonds or other investment
vehicles (Series 7 activities).
1 in 7 insurance professionals will be named in some type of E&O claim at some
point in their insurance careers. The average claim is in excess of $18,000, and this
figure does not include the cost of legal representation
All E&O insurance policy forms are referred to as claims-made. In a claims-made
policy, coverage is triggered if a claim is made during the policy period for an error
or omission that occurred after the policy’s retroactive date (prior acts coverage
date).
The retroactive date of inception (R.D.I.) or prior acts coverage date is one of the
most important issues to understand when purchasing E&O coverage. Prior acts
coverage defines just how far back in your professional services career your E&O
coverage will extend. Some plans may offer no prior acts coverage. This means that
you are only covered for E&O claims that arise from activities occurring after your
policy effective date.
A comprehensive E&O plan offers prior acts protection. All of MGA Insurance
Services’s plans offer prior acts coverage beginning with your original date of
continuous E&O coverage. Some of our plans offer unlimited prior acts coverage.
The purpose of an Extended Reporting Period (ERP), commonly referred to as ”tail”
coverage is to provide some degree of E&O protection to an agent who has left the
business, become disabled or retired. Instead of purchasing a new claims-made
policy year after year, an agent can purchase an ERP for usually one to five years.
The ERP does just what you’d think; it allows the agent to extend the period of their
last active policy under which claims may be filed, following the original policy’s
expiration date. An ERP does not cover any new business activities; rather it only
addresses claims that arose after the insured’s prior acts date and before the
termination date of the insured’s last in-force policy.
There are three basic coverage components of a claims-made policy: Prior Acts
Date or Retroactive Date of Inception, an in-force policy and an Extended Reporting
Period (ERP). If available and structured correctly, these three pieces can be
seamlessly combined to provide the comprehensive coverage demanded by an
insurance professional.
It is extremely important that you understand the crucial need to avoid ”gaps” of any
kind in your E&O coverage. If you allow any gap to occur, even a gap of 1 day,
between one policy’s expiration and the next policy’s effective date you could
ultimately lose years of prior acts protection.
back to top of page
Benefits of having Errors & Omissions Insurance
Peace of mind against future claims
Expert professional and legal counsel provided to represent you
Protection for current and future wage earnings
back to top of page
E&O Loss Control — Why Claims Occur
It is important is for you to understand the main reasons that E&O claims occur.
Failure to Document:
As a professional you must be aware of how important documentation is.
Communication between yourself and the client may be the focal point of litigation. If
you have failed to document your communications with the client, in 9 out of 10
cases you will be held liable.
Misrepresentation:
Failure to properly explain policy provisions or unintentionally/intentionally making
mistakes in completing an application for insurance can get an agent sued for
misrepresentation. In the majority of cases, misrepresentation has been alleged, but
there was no actual evidence of purposeful misrepresentation.In cases of intentional
misrepresentation the agent can be found not only liable in civil court, but also found
guilty of fraud. In some occasions, criminal charges will also be filed. Remember
that no E&O policy will cover a case of intentional misrepresentation or fraud.
Inadequate Coverage:
These cases involve allegations of either a total lack of coverage, inadequate limits
of coverage, or failure by the agent or broker to place proper or adequate insurance
for the risk to be insured.
Standard of Care:
The allegations in these claims state that the agent or broker failed to live up to the
acceptable and recognizable standard of care that is a generally accepted practice
within the industry. Unfortunately, since the agency and brokerage business is not
legally classified as a "profession," there are no established rules for professional
conduct such as those established for the medical, dental, and other professions.
For example, the California Insurance Code contains a section that states: "The
purpose of this chapter is to protect the public by requiring and maintaining
professional standards on the part of all persons licensed hereunder." However,
they do not define professional standards, nor do they outline any set of standards.
Unfortunately, this leaves the courts to make decisions regarding what constitutes
"standard of care," based on the judge and jury's inclination at the time.
Breach of Duty:
It is an accepted rule of law that once an agent or broker agrees to undertake a task
such as the placement of insurance, they owe the insured a duty to place that
coverage, if possible. In the majority of cases, the courts will hold the agent
responsible and guilty of breach of duty for failure to fulfill this required. In the
absence of or failure to place the coverage properly or to notify the insured within a
reasonable time that they were unable to place the coverage, the agent/broker has
breached their duty to the insured and can be held liable for the consequences of
the failure to act.
Breach of Contract:
When an agent or broker agrees to undertake some task for an insured and then,
through negligence or carelessness, fails to perform, the agent can be held liable
not only for breach of duty but also for breach of implied contract. In another area,
consider the situation where an agent exceeds their authority under their agent
contract and, as a result of this alleged breach, there is a loss in which the insurance
company is named as a defendant. The company may pay the claim but then turn
around and sue the agent for breach of contract.
Special Relationships:
In this class of action, courts generally hold that as a result of the actions of the agent
and the business relationship over a period of time, a "special relationship"
developed. Courts hold that because of this special relationship, the agent/broker is
held to a higher standard of care in handling the insured's business.
The "L" Syndrome:
Most other claims are classified as ”Lack Of” or the "L” Syndrome causes of loss.
The most common claims issues stem from:
- Lack of Action
- Lack of Attention
- Lack of Communication
- Lack of Concern
- Lack of Consistency
- Lack of Control
- Lack of Knowledge
there is also liability assigned under "breach of contract."
E&O Loss Control — Ways to Reduce your Errors & Omissions Exposure
So what can you do to reduce your risk now that you know how many claims occur?
Here are some simple things that you can do to protect yourself.
- Make sure that you have adequate E&O coverage and a good understanding
of the policy. MGA Insurance Services can not only help provide you with
coverage but a MGA Insurance Services representative can also help you if
you have any policy questions. - Think defensively, act professionally.
- Standardize and document your policies and procedures.
- Put communications in writing.
- Listen to and respond to your clients.
- Don’t generalize, be specific.
- Stay within your area of expertise.
- Stay current, train yourself and your staff.
- Do your own due diligence, investigate the companies you represent.
- When co-brokering business don’t assume anything, follow up.
- When filling out an insurance application with a client, don’t assume anything,
make sure that the client answers the questions.
If you need assistance, please call (877) 524-0265
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