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Of all the topic,s ever posted on CADO E & O is the most missunderstood. Many many coverage and defense lawyers will tell you "we can not tell you what triggers full cost of defense and indemnity"; until we have all the facts.

You all know my thoughts on this topic. Its the carrier, vendor and then the street adjuster.... if sued-  cut a deal with the plaintiff attorney and roll over on the two masters above you in the chain..... if they do not defend you. You will still get hired, IF they need good adjusters.

I think of E & O coverage as a screen to keep wantabee cat. adjusters out of the carriers office. kinda like a fidelity bond that would protect only the carrier.

Posted By Montana Goldust on 02 Nov 2010 08:37 AM
Just wondering out loud here.
When you work for a vendor do they pay for E & O or do you?

Most pay for their own
 top guys, get paid for them
Understand that is only doing claims for the same vendor

I know Pilot pays for E & O. I really think they have the best perks, temp employee, some medical coverage for reg. employees. , WC and unemployment and don,t mind if you file for checks in slow times. Just the FICA is a big payraise. I really do not know about the other 4-5 biggies

Crawford & Company also pays for the E&O,

Annually, I have interviewed www.cplic.net - Claim Professional Liability President Michale Hale about E and O coverage for independent adjusters. They specfically recommend in their Q and A that independents secure their own E and O coverage for their own protection. I think you will find their 2010 comments as well as our interview with them in 2009 and 2008 very helpful to consider your needs whether or not the independent firm provides you coverage. Another especially important area regarding E and O is getting confirmation your coverage provided by the independent firm provides all of your defense costs if you are sued and whether or not those costs are part of the coverage limit or an additional coverage. I have learned so much from discussing these very important topics from CPLIC and I highly recommend you contact them since they do specialize in E and O coverage for claims professionals. To read all of the informatin we have collected from them, you'lll find it on this blog on our adjuster information blog:

http://dimechimes.wordpress.com/201...adjusters/

Posted By Dimechimes on 04 Nov 2010 10:12 AM
Annually, I have interviewed www.cplic.net - Claim Professional Liability President Michale Hale about E and O coverage for independent adjusters. They specfically recommend in their Q and A that independents secure their own E and O coverage for their own protection. I think you will find their 2010 comments as well as our interview with them in 2009 and 2008 very helpful to consider your needs whether or not the independent firm provides you coverage. Another especially important area regarding E and O is getting confirmation your coverage provided by the independent firm provides all of your defense costs if you are sued and whether or not those costs are part of the coverage limit or an additional coverage. I have learned so much from discussing these very important topics from CPLIC and I highly recommend you contact them since they do specialize in E and O coverage for claims professionals. To read all of the informatin we have collected from them, you'lll find it on this blog on our adjuster information blog:

http://dimechimes.wordpress.com/201...adjusters/

Awesome post Ms. Debbie, thank you !

I have some questions about why an individual adjuster needs E&O and I have never gotten a straight answer on this website or any where else.

Is it really realistic that an adjuster would not be defended by the carrier, when the carrier is also being sued?

I mean really, the carrier would let the adjuster hang out to dry, let the adjuster go into a deposition unprepared, MAKE THE CARRIER LOOK BAD AND WEAKEN THEIR DEFENSE, and then the carrier is more likely to lose big bucks.

Do the carriers really play that way?

I am surprised if they do.

Someone please tell me:

1) yes, carriers not only say the adjuster is on his/her own, they actually act that way too, when the lawsuits come. If an adjuster says all kinds of things in a deposition that make the carrier look liable, the carrier figures that's the price they pay for saving some money on attorney's fees.

OR

2) No, in reality the carrier will defend the adjuster because it makes total sense for their own defense. By defending the adjuster the carrier mounts a more vigorous, unified defense.

OR

3) They defend adjusters when they like them, but hang bad ones out to dry. They defend against claims like "negligent hiring" by pointing the finger at the vendor.


Somebody please tell me how it really works in the real world in a real lawsuit.

I can tell you from my personal experience in daily claims that:

1) the adjuster doesn't even get named as a defendant - just gets called as a witness.

2) the carriers defense attorney preps and supports the adjuster.

I'm not saying my personal experience is the norm, it just happens to be my (limited) experience.

And I'm not saying E&O insurance isn't needed- I'd just like some real world examples, and I'd like to know some percentages if possible.

For example, will the carrier defend you almost always in certain situations, half the time in others?

Does it depend on the carrier?

How about the vendors?

Anybody ever have a situation where a carrier left the adjuster hanging and the vendor provided a defense?

Can anybody give an example where the adjuster did nothing wrong and the E&O carrier was the only one will to defend him/her?

thanks

All of your info has been very helpful so far.I have been blessed enough in the 11 years I have adjusted to be a witness only 1 time. I was one of 5 adjusters that handled a large loss and the insured was trying to get a new home .I and their contractor had taken the time to take over 80 photos of substandard construction in the attic and other areas of the claim w/ the measurements shown on the photos. The insured didn't have a leg to stand on. My vendor supplied an attorney as well as the major carrier had 5 attorneys also present. I cannot divulge the insured other than to say they were  public known people all over the usa.

Leland, I have always had the suspicions you pointed out. Since I have been in this business, I have worked claims in just about all of the target rich environments for litigation: Andrew, Northridge, Florida 04, Katrina, etc. Looking back, the only legal encounter I had with the other side was to give a deposition once and that was for a daily claim in South Alabama concerning ALE. In each and every other case when there was litigation involved I met with the carrier’s lawyer, went over what I did and why, and they took care of the matter from there. Sometimes it may have involved two or three meetings but I was not named as a defendant or called to give depositions except for that once.

In my opinion, E&O (like all insurance) is sold by marketing to the fear of loss, whether realistic or not. There are adjusters who leave the reservation and, on their own, expose the carriers to bad faith and other legal nightmares through ignorance or design on the adjuster’s part. These may be the ones that are left to hang on their own hook by the carrier but, by and large, I have found carriers to stand with the adjusters in cases of litigation.

I down loaded the CPLI policy read it again. I still think it only gives the "the people" who require you to show a policy # that you have a policy. I does not spell out what the protection is. This policy says "it does not cover any expense you have before they have written notice and they do not have to pay for ANY thing that they decide is covered until they have the facts AND then you have to pay the deductible amount 100% BEFORE they pay the first penny of defense cost or damagesIF they decide its an ACT,EVENTS,OMISSIONS or OCCURRENCES.

Never never does any E & O policy I have ever read make a statement like a liability policy should : "we will defend you from suits even if the allegation are false or non meritorious.  Who sues who ? Does the carrier sue you to get some bone head deal you made back? Does the vendor sue you because you lost the account for them ?(3)  OR does the policyholder sue you becuase you did not have enough education in insurance or construction? I think it,s always  # 3 and the two masters above you had better CYA for you.,

Every vendor that I have ever worked for carries E&O that covers everyone. If you are working direct for a carrier, I would definitely carry E&O. You never know when their might be a conflict or the carrier might not defend you.

It seems most adjusters on this site, thinks, hopes E & O insurance pays their cost of defense. I do not think E & O is a cost of defense and indemnity if you are sued by a third party like an auto liability policy. When an insured sues you, does that not make them a 3rd party?  We have never had a real expert make a post on this topic.

Most contracts I have read states they will only defend, WHEN you have spent your deductible amount. How many have $25,000 or $100,000 set aside for lawsuits ?

A good friend has a judgement of one million on her for her comparitive actions when she was the 1099 WC adjuster for Cunningham Lindsey about 10 years ago. They gave her a limited defense; but.....no indemnity. Be very careful with vendors.