What COVID-19 Means to the E&O Marketplace

GUEST BLOG: Dean Milber, JD/MA, Director, CalSurance and Lancer Claims

When it comes to Errors and Omissions coverage, expertise matters.

Now more than ever, given the current risk environment related to the COVID-19 pandemic, expertise matters.

It’s why we’ve partnered with CalSurance and Program Administrator Brown and Brown to establish our group sponsored E&O program for our agency partners. And we're proud to be partnered with Dean Milber, who led the design and implementation of our E&O program, and who we're happy to have as our guest blogger for this most relevant article. 

The insurance agent/broker marketplace continues to swing wildly in this COVID-19 underwriting and claim environment.  Over the last few weeks alone, E&O carriers have been:

  1. Non-renewing or leaving the space altogether;
  2. Pulling back on limits and coverages (including removing the defense outside the limit option, or not writing certain size or location of agencies) and/or adding COVID-19 exclusions, and/or;
  3. Significantly increasing premiums (or requiring min. premium for excess coverage) and deductibles.

With all of this in mind, we look to the stability and predictability of our group sponsored E&O program to help our agency partners. This becomes especially important as we soon expect an uptick in E&O claims as Courts continue to find in favor of insurers in COVID-19 business interruption coverage litigation. 

As a recent example, one agent wrote, “You were right about [carrier name removed to protect the innocent]. They stuck the Corona Virus Absolute Exclusion in there.  We need to move our policy.”

We’ve also been asked, “I have gone online and pulled the sample policy.  I don’t see an exclusion for the virus on there; however, do you know if the carrier plans on putting one on at renewal?” To which we responded, "(w)e started the renewal process last week, and there was no discussion whatsoever of adding a COVID-19 or pandemic exclusion.  In fact, the discussions focused on lessons learned about (network) members, and to re-word policy language to better meet their needs and goals.” 

Recently, the District of Columbia judge in Rose's v. Erie issued a decision, the third in a row, rejecting COVID-19 related business interruption claims. The Court found that the DC Mayor’s lockdown orders (i) “did not effect any direct changes to the properties;” ; (ii) “did not have any effect on the material or tangible structure of the insured properties;”; and, (iii) did not constitute “a direct physical intrusion,” needed to constitute loss of use.

This decision is consistent with a May 2020 decision obtained by one of CalSurance’s TPA's panel counsel on another program where a Michigan Court gave teeth to one of the main arguments against business interruption coverage for COVID-19 related losses, namely that an insured owner cannot obtained such  business interruption coverage because the restaurant did not sustain "direct physical loss or damage." This decision which will likely be appealed has garnered some national attention in the US although Michigan is a pro-insurer state and not entirely surprising.  We do expect this decision will lead to more professional liability claims, including Insurance Agent & Broker and Management Liability (D&O) claims. Here is a link to an entire article on the decision:


Dean Milber, JD/MA, is the Director of Claims at Lancer Claims and Business Development for CalSurance. For more than thirty years, Dean Milber has been coverage counsel, litigation counsel, and supervisor counsel representing insurers and their policyholders throughout the United States. Dean has taken his unparalleled experience to better serve counsel, insurers and policyholders (i) as an expert witness with a substantive and service-oriented approach critical to a successful outcome; and, (ii) with an ADR insurance coverage and professional liability practice cognizant that each engagement is meaningful to all involved, and the resolution of a dispute requires the interest and willingness to listen together with the ability to be candid, creative and respected. 

For the last five years, Dean has taken his legal and insurance experiences to better serve the insurance community working with (i) CalSurance in the design and production of Professional Liability/E&O Insurance and (ii) Lancer Claims Services in providing cost-effective, high quality third-party claims administration of claims against professionals.