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Last Post 03/07/2011 5:26 PM by  Ray Hall
E&O insurance
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HuskerCat
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04/12/2009 12:01 AM

Posted By cowboy26995 on 11 Apr 2009 08:25 PM
In response to Husker Cat that why I said add ons. There is a straight E&O these other provisions are thrown in by the carrier.. I also have a CGL with Hartford for the mundane dropped ladder etc.

Sorry, I must just be dense...but those "add-ons" are non-additions to an E&O policy, IMHO, with all of the useful qualities offered by the elixirs drummied by the snake oil hawkers (according to 'Ol Ghost). Deception by bells & whistles to avert one from all of the exceptions,exclusions and limitations. In 17 years, the only applicable coverage under an E&O I have ever seen apply was on a Printer's policy when a large volume mailing went out with incorrect pricing on the sales add & coupons, and also when some promotional items (mugs, caps, etc.) were accidentally misprinted. These incidents were water under the bridge before any correction orloss could be averted.  Claims are different, as oversights & supplements are very common and no harm done.  However, to ignore or stonewall a legitimate complaint or oversight, becomes or is viewed as an intentional act and is not covered.

Can anyone out here give a scenario of a property loss (whether cat or daily) that could result in a covered E&O claim against the adjuster?          


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Ray Hall
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04/13/2009 10:57 AM
I am with huskercat. I would like some examples. Most of us know what a tort is and the definition of negligence, and the allegation of negligence; but what is an act, error or omission ?
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HuskerCat
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04/13/2009 9:34 PM
Before anyone pipes up, don't include coverage issues or denials due to "Cause of Loss".  Those decisions are made by the carrier.  If there is a dispute, the carrier is obligated to engage an expert, order a reinspection, pay supplements,  or deal with the agent of record on certain issues.  The independent field adjuster never ever has the last word, nor final authority.  Remedies are always at the carrier's discretion, and the field IA is immune even if the carrier fails to resolve the complaint.  That opportunity is there, unless the carrier ignores it.  
 
Granted, the IA may be named in a suit.  If there is an E&O policy in effect, the E&O carrier may engage counsel to file the answer to the petition (which is a "canned" denial of all allegations) while at the same time sending the insured (you) a ROR letter advising to engage private counsel "as it does not appear coverage applies".  
 
The requirement of E&O coverage for field IA's should be analyzed and looked at a lot closer by the powers that be.  E&O coverage certainly has its place in the world...but if you don't have ultimate control over the final outcome/decision, who made the error or ommission that resulted in legal action?
 
Most readers of this site probably have a background in property for the most part, and have never seen an E&O policy.  In fact it's been a little while since my staff days as a multi-liner that I've actually read one.   But the exclusions & limitations on one of those forms don't escape your memory any time soon.  Maybe there's someone out here that can enlighten us if able to share a scanned pdf of their own E&O coverage form.
 
      
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okclarryd
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04/13/2009 10:06 PM
It appears that the danger might be in being "named" in a suit. If the IA company does not provide a defense for the adjuster and the carrier does not provide a defense for the adjuster, he or she will be liable for the defense costs just to get dismissed from the suit. If the adjuster does not respond by the due date, he or she will be responsible for their share of any settlement.

I've given depositions with a court reporter present, answered interrogatories, met with plaintiff and defense attorneys and otherwise been occasionally involved personally in claims lawsuits. I have never liable for any settlement or any part of any settlement. BECAUSE I HAD BEEN REMOVED AS A DEFENDANT.

There's a term for this process but it escapes my poor, old, feeble mind.

That being said, my involvement was long ago in a land far away and my experience may not be applicable to the current legal environment.

So,...........once again,............what do I know?
Larry D Hardin
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Tom Toll
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04/14/2009 2:11 PM
Lawyers could care less who they destroy, guilty or not. Since all the lawsuits from Katrina and others, they will be on the prowl even more now. It seems to me that all would be better off making themselves judgment proof, rather than getting E&O coverage, but that is just my opinion. Anyone that I know that has been named in a suit, (adjusters), have never had their E&O coverage defend them. I am beginning to wonder what E&O is. I have never read any of the current policies, so I have no idea what coverage there is.
 
Fortunately I have never had an E&O, but like others, I have been involved in suits on claims, property, aircraft, and casualty. Needless to say, I don't like attorneys.
Success is not final, failure is not fatal: it is the courage to continue that counts.
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HuskerCat
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04/15/2009 2:24 AM
The Methuselahs (Ray & Tom) have spoken.  Does anyone have something to the contrary on the property claim handling side, outside of bad faith which would not be covered anyway?    
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ChuckDeaton
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04/16/2009 6:16 PM
Generally speaking, paid advocate is a better term, at least less difficult to understand than Plaintiffs Attorney. An Advocate is paid to represent the plaintiff and is required by law to do an acceptable job. Unfortunately those representing the insured generally get paid a contingency fee. That is the advocate's fee is an agreed on percentage of the amount secured for the insured/plaintiff. Unfortunately, low dollar recoveries generate low dollar contingency fees and the converse is true. This fosters some amazing results, one example is the famous Rigsby sisters and the MS judge bribery case.

It is no wonder to me that attorneys/advocates that will bribe a sitting judge will name an adjuster in a suit. They start off advocating an insured's claim and greed and ego get a grip and it is off to the ridiculous races. Then the adjuster has to somehow remove their name from the suit and as long as nothing heinous was done while adjusting the claim then usually the adjuster is let off the hook, but getting off the hook is not free. The legal system runs on money and time. If you live in Arkansas and you get named in New Orleans then your court dates will be in New Orleans. I am working on Katrina claims that are in litigation in New Orleans. Could you afford to live in Texas, say Houston or in Arkansas, say Little Rock, and defend yourself in New Orleans. I doubt it.

As the economy gets worse so will this problem.
"Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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HuskerCat
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04/17/2009 3:30 AM
So who is going to defend me?  My GL carrier?, or E&O carrier (which I don't have)?...and neither of which has coverage for the non-covered loss by the plaintiff reaching for deep pockets.   Incorporate, put your money in your kids' & grandkids' names, bury it in the back yard in a milk can.  Every adjuster I know, including myslef,  has had the occasonial screw up or lapse due to work overload, lack of knowledge in a particular field, or personality conflict with the insured.  But all of those can be overcome way way before you are faced with a legal action. It's just a matter of knowing when to hike up your britches, and wade out of the water.   
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jsindallas
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03/06/2011 6:30 PM

I could not have said it better Husker. In the ten years I've been handling high volume claims there's always the ones that somehow feel shorted or did not get policy limits on their claim. But, as a field adjuster you can only move as fast as the slowest claims rep approving your recommendations or a bad CAT company where you find checks were thrown into files and not sent to the insureds. I've always relied on my old stand-by...."you cant get blood from a turnip." 

All the horror stories I've read on WHY you should have E&O never address the fact that $1,000,000.00 policy limit does sort of place a target on your back for an attorney that needs a buck. When I storm I deposit my income into a ITF Money-market fund in my son's name and draw from it. If sued, they cant seek damages from him.

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ChuckDeaton
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03/07/2011 4:45 PM
Viewing E&O from a seat in the real world, there is no coverage for small dollar matters under an E&O policy. Even though the duty to defend supercedes the duty to pay a loss/judgment, the deductible generally is much more than the cost to defend. So the adjuster is out, not only the dollars to pay for defense, the adjuster also has to pay the deductible before any E&O loss is paid.

Furthermore, there is, from a practical standpoint, no way to make yourself judgment proof. As most adjusters are broke to begin with buying E&O contributes to their financial problems.
"Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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Ray Hall
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03/07/2011 5:26 PM

Several large vendors pay for the adjuster or sale to a sub-contractor at a reasoanble rate. Try to only work for these venders. Many of the large real estate franchise national broker firms, will subtract an amount from each file. The exposure is much greater for real estate people. Just don,t let a vender use this as a profit center also.

Many TX. adjusters discovered they we only named to keep the suit out of Federal court. Most plaintiff firms will non suit the poor slob of an adjuster under a 4 year contract if they will keep their mouth closed. (OOPs)

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