Errors and Omissions claims are a result of?

• A. unethical behavior
• B. lack of knowledge or information
• C. Both unethical behavior and lack of knowledge or information are correct
• D. Neither unethical behavior and lack of knowledge or information are correct

Answer: (C)

Errors and omissions claims arise from the professional duties of an agent or adjuster when a client suffers a financial loss due to the professional’s mistakes or failures in performing those duties. Those mistakes can come from not having enough knowledge or information to handle a claim correctly, such as misinterpreting a policy provision or overlooking important endorsements. They can also stem from unethical behavior, like misrepresenting coverage or acting with deceptive intent that harms the client. Because E&O liability covers negligence in performing professional services as well as harmful misrepresentations, both lack of knowledge and unethical conduct can lead to these claims. For that reason, the best answer recognizes that either factor can be responsible.