INSURANCE GUIDE
What Are Insured Services in E&O Insurance?
The insured-services definition identifies the professional activities the E&O policy is intended to address. If an activity falls outside that definition, the policy may not respond as expected.
Insured services define the professional work
E&O insurance is not a blanket policy for every activity a business performs. The policy generally identifies or defines the professional services that are within its intended scope. Those services should match the firm's actual operations.
Real estate businesses often perform more than one service
A real estate firm may handle residential sales, commercial transactions, leasing, property management, consulting or transaction coordination. A mortgage business may broker, originate or process loans. An escrow company or appraiser has a different professional-services profile. Each activity should be disclosed during underwriting.
Ancillary services can create gaps
Problems can arise when a firm adds a service after the policy is issued or assumes a related activity is automatically included. Examples can include appraisal, consulting, property management, construction management, development, loan modification or other services not clearly shown in the policy wording.
Review endorsements and exclusions
An activity might be included by definition, added by endorsement, restricted by a sublimit or excluded entirely. Read the definition together with exclusions and endorsements rather than relying on the policy title.
When operations change
Tell your broker when the business adds services, enters new states, changes ownership, acquires another firm or materially changes transaction types. Waiting until renewal can create uncertainty about whether the new activity fits the existing policy.
Questions to ask
- Does the insured-services definition match everything we actually do?
- Are services performed by independent contractors included?
- Are ancillary or consulting activities included?
- Are any services subject to sublimits or special exclusions?
- Do prior acts apply to all covered services?
In this guide
Insured services define the professional work
E&O insurance is not a blanket policy for every activity a business performs. The policy generally identifies or defines the professional services that are within its intended scope. Those services should match the firm's actual operations.
Real estate businesses often perform more than one service
A real estate firm may handle residential sales, commercial transactions, leasing, property management, consulting or transaction coordination. A mortgage business may broker, originate or process loans. An escrow company or appraiser has a different professional-services profile. Each activity should be disclosed during underwriting.
Ancillary services can create gaps
Problems can arise when a firm adds a service after the policy is issued or assumes a related activity is automatically included. Examples can include appraisal, consulting, property management, construction management, development, loan modification or other services not clearly shown in the policy wording.
Questions about this coverage?
Talk with ECLICK about your current policy, upcoming renewal, or the coverage you are comparing.