14.10 Errors and Omissions Insurance

The Company shall maintain Errors and Omissions Insurance coverage with an insurer designated by the Company. Currently, the Company charges a per transaction fee of $65.

The Company carries Errors and Omissions Insurance in the amount of $1,000,000 with a deductible of $15,000. All agents and staff of the company are covered by the policy. The policy is paid by the Company.

Errors and Omissions Insurance generally cover the negligent acts of the insured. It does not cover all possible damages for which the Company could be liable. For example, no errors and omissions insurance covers punitive damages. For other exceptions, contact the broker (sales manager) for a copy of the policy.

Errors and Omissions Insurance does cover defense costs, that is, the legal fees involved in defending a claim against the Company or Agent. This is very valuable coverage.

The policy of the Company is that each agent must notify the broker (sales manager) as soon as the agent is aware of a possible claim against the agent/broker. "Possible claim" means the potential of a disagreement which could lead to a lawsuit against the Company or Agent. Only in this way can the company properly invoke the errors and omissions coverage, if necessary.