Alberta General Insurance Level 1 Practice Exam

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Session length

1 / 400

For what main reason should agents and brokers carry Errors and Omissions Insurance?

In case of physical injuries

For lawsuits due to actions or omissions leading to lack of coverage

Agents and brokers should carry Errors and Omissions Insurance because it protects them from lawsuits arising from their actions or omissions resulting in a lack of sufficient coverage for their clients. This is important because if a client suffers financial loss due to the agent's or broker's error or negligence, they may file a lawsuit to seek compensation. Physical injuries, property damage, and administrative penalties are not typically covered by Errors and Omissions Insurance, so options A, C, and D are incorrect.

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For property damage caused by the insured

To cover administrative penalties

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