Which term describes the professional liability for mistakes in putting a policy into effect?

• A. Insurance fraud
• B. Fiduciary liability
• C. General liability
• D. Errors and Omissions

Answer: (D)

The idea being tested is professional liability for mistakes made while providing a service. Errors and Omissions liability covers claims arising from mistakes, oversights, or negligence in performing professional duties—like an insurance agent incorrectly putting a policy into effect, misplacing coverage, or failing to apply the right endorsements. This protection helps with defense costs and damages when a client suffers a loss due to those mistakes.

Insurance fraud is about criminal deceit to gain something unlawfully. Fiduciary liability comes from mishandling someone else’s money in a fiduciary role. General liability covers injuries or property damage to others arising from normal business operations. None of these address mistakes in delivering professional services like placing a policy, which is why the correct term is Errors and Omissions.