Insurance agents today must understand the reality of being sued. In the past, it was unusual that an agent was subjected to an E&O claim. We are in a new era in which an agent who has not been sued is the exception. It's like termites in Arizona: If you haven't had them, you will. Commercial insurance agents are becoming more susceptible to this disturbing trend.

Which of the following are real cases brought against a commercial insurance agent?

• An insured suffers an uncovered loss and later sues the agent, stating he had wanted a certain coverage he did not have, claiming he told the agent he wanted that coverage during a meeting that never occurred.
• The employee of a client business is severely injured on the job. The insurance carrier sues the agent, claiming there was insufficient information on the application, causing the carrier to pay a large claim due to an unexpected exposure, even though the carrier was in the second year of coverage.
• A contractor who was not a client, but his client's client, sues an agent for an inappropriate additional insured endorsement, even though the agent had sent his client a copy of the endorsement.
• A client sustains a loss which could have been covered by either the CGL or auto policy, but each had exclusionary wording such that the main exposure of the insured was not covered.
• An agent sold a policy with inadequate limits to cover a loss; another agent who had sold other lines of coverage was sued for not recommending higher limits on that policy, even though he was unaware it existed.

Although one or two situations may appear to be obvious failures on the part of the agent, sadly these are all real. And these cases don't just apply to young, inexperienced agents. Most agents had a decade or more in insurance and many had a professional designation. Small firms are sued as often as large ones.