What is the main cause of Errors and Omissions claims against brokers?

The primary cause of Errors and Omissions claims against brokers centers around failing to identify the client's loss exposures. Brokers are responsible for understanding their clients' unique needs and potential risks, enabling them to recommend appropriate coverage to mitigate those risks. When a broker neglects this critical step, it can leave clients inadequately protected, leading to financial loss when an unforeseen incident occurs. Clients may look to the broker for errors in judgment about their coverage needs, particularly if they experience a loss that could have been prevented with proper coverage or if they are not adequately informed about their insurance options.

On the other hand, providing unnecessary coverage, not canceling policies when asked, or violating the Agency Agreement, while they may contribute to customer dissatisfaction or disputes, do not directly align with the fundamental responsibility of risk identification that brokers hold. The essence of a broker's role is to assess and advise on risks accurately; neglecting this duty is what primarily drives claims against them.