E&O Tips
One of the latest innovations in the marketplace are forms provided by wholesale brokers. HOWEVER, it seems some of these brokers are giving the impression that they are the carrier. I see this in cyber, flood, wildland fire, HOA's, and other lines.
As a retail agent, you MUST LIST THE ACTUAL CARRIER on the application. You cannot correctly complete an application stating the broker is the market. The broker does not have a license as a carrier. The carrier must be on the application. For example, I have seen agents make major E&O mistakes by listing the broker as the cyber carrier.
To make things more difficult, one such broker advised they do not disclose the carrier until the policy is written. This is flat out unethical, and I encourage you to avoid doing business with any wholesalers that take this position. Some of these markets are admitted and some are surplus lines. YOU MUST KNOW this point at least before providing a quote because your quote/proposal should identify whether the actual carrier is admitted or surplus lines. Some of these brokers use both admitted and non-admitted markets.
Do your due diligence with these new markets. If something seems too good to be true it usually is too good to be true. Some of these markets are truly providing innovation and others, well, what they are offer is too good to be true. Always list the actual carrier on your applications!
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None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.