List Looks Long However We Wanted to Pinpoint to Give Brokers Ideas

MISCELLANEOUS ERRORS & OMISSIONS

PROCESSING SERVICES

GUIDELINES

1.6.09

E&O UNDERWRITING/RATING GUIDELINES

TABLE OF CONTENTS

I.COMPUTER/SOFTWARE TECHNOLOGY E&O

A.Eligible Classes

B.General Guidelines

C.Submit Guidelines (Phone Call or E-Mail to Underwriter Prior to Quoting)

D.Prohibit Guidelines

II.CONSULTANTS & MISCELLANEOUS E&O

A.Eligible Classes

B.General Guidelines

C.Submit Guidelines (Phone Call or E-Mail to Underwriter Prior to Quoting)

D.Prohibit Guidelines

III.ADVERTISING/MARKETING AGENCY & PR E&O

A.Eligible Classes

B.General Guidelines

C.Submit Guidelines (Phone Call or E-Mail to Underwriter Prior to Quoting)

D.Prohibit Guidelines

IV.CLAIMS ADJUSTERS

A.Eligible Classes

B.GENERAL GUIDELINES

C.SUBMIT GUIDELINES (Phone Call or E-Mail to Underwriter Prior to Quoting)

D.PROHIBIT GUIDELINES

E.POLICY FORMS

V.GENERAL PROHIBIT

VI.UNDERWRITING REQUIREMENTS

A.Authority

B.Minimum PremiumS (All States Unless Otherwise Indicated)

VII.ADDITIONAL INSUREDS

A.UNDERWRITING ADDITIONAL INSUREDS

B.Additional Insured Requests To Be Declined

C.Requests to Use Broadened “Named Insured” Language

D.Approval

E.Primary And Non-Contributory For Specified Additional Insureds

VIII.PROFESSIONAL LIABILITY RATING

A.Premium Computation

B.Rates (Assuming a $1,000,00/$1,000,000 Limit)

C.INCREASED LIMIT FACTORS (MP Applies)

D.Deductible credits (MP Applies)

E.Prior Acts Step Factor

F.Extended Reporting Period Premium Computation

G.Additional Insured Endorsement

H.*DEFENSE COSTS OUTSIDE OF LIMITS OF INSURANCE

I.*Waiver of Transfer of Rights of Recovery

J.PERSONAL/ADVERTISING INJURY COVERAGE

K.*Contingent Bodily Injury

L.*CONTINGENT PROPERTY DAMAGE

M.*AMENDATORY – COPYRIGHT, TRADE DRESS, TRADEMARK – SUB-LIMIT

1.6.09

E&O UNDERWRITING / RATING GUIDELINES

I.COMPUTER/SOFTWARE TECHNOLOGY E&O

A.Eligible Classes

1.6.091

• Application Services Providers
• Aggregating/Warehousing
• Backup Services/Data Archives
• Computer Consultants
• Content Providers/Aggregators/Publishers
• Data Conversion
• Data Management/Data Processing
• E-Commerce
• Enterprise Resource Planning
• Graphic Designers
• Hardware Installation
• Imaging
• Information Retrieval/Storage
• Internet Marketing/Advertising
• Internet Portals
• Network Design/Installation/Support
• Online Auctions
• Security Consulting
• Server Facilities
• Software Development/Designers
• Software Integration
• Software/Systems Training or Support
• Software Testing
• Systems Analysts
• System Design/Analysis/ Migration
• Systems/Software Customization
• Technical Writing
• Technological Research
• Technology Consulting
• Telecommunications Consulting
• Value Added Resellers (Hardware/Software)
• Website Designer/Developers
• Website Hosts
• Website Owners

1.6.091

B.General Guidelines

• Class code: 41675

• Gross receipts under $1,000,000;

• Geographic locations as stated per Letter of Authorization;

• Risks with no claims or losses;

• Prior Acts (Declaration page required upon binding documenting existing coverage in place at equal or higher limits and the same retroactive date).

C.Submit Guidelines (Phone Call or E-Mail to Underwriter Prior to Quoting)

• Any risk with receipts greater than $1,000,000;

• Any risk with limits over $1,000,000Per Claim limit and/or $3,000,000 Aggregate limit;

• Any risk requesting copyright/trademark sublimits over $100,000/$100,000;

• Chat rooms;

• Temporary employee staffing or permanent placement;

• Game design including on-line gaming;

• Voice-Over Internet Provider (VOIP) services;

• Any services for clients in the automobile or oil & gas industry, manufacturing, industrial, utility, banking/investment/financial, aerospace or medical fields;

• Software designed, programmed or developed that is used as part of a product manufactured in whole or in part by the client or the applicant;

• Any contracts lasting longer than one year;

• On-line publications;

• Custom software development;

• Adult-oriented content, games, web-sites;

• Subcontracted work at 25% or more;

• Any risk or applicant located outside of geographical area(s) as stated per Letter of Authorization;

• Any risk desiring a quote for Contingent Bodily Injury or Contingent Property Damage coverage;

• Any risk with any incidents, claims or losses;

• Any risk classification not listed above;

• Any work for publicly held companies;

• Any lawyers, real estate agents or brokers, insurance agent or broker, mortgage broker, property manager.

D.Prohibit Guidelines

See General Prohibit listing below.

1.6.091

II.CONSULTANTS & MISCELLANEOUS E&O

A.Eligible Classes

1.6.091

• Accounts Management Consulting
• Answering Services
• Association Services Consulting
• Auctioneer
• Business/Operational Re-engineering
• Business Plan Development/Review
• Business Process Consulting
• Career Consulting
• Convention Management / Convention / Tradeshow
• Court Reporter
• Creative Design
• Credit Consulting
• Crisis Management Consulting
• Data Processing/Work Flow Configuration
• Dating Services
• Educational/TeamBuilding Seminars
• Executive Coaching
• Expert Witness
• Forensic Investigation
• HIPPA Consulting
• HR Consulting
• HR Translation/Integration
• Jury Selection
• Life Coach
• Management Audits
• Management Seminars
• Medical Billing/Coding
• Medical Practice Management Consulting (no peer review, credentialing, temporary staffing or permanent placement)
• Medical Transcription
• Motivation Consulting
• Museum Consulting Management
• Notary
• Operational Consulting
• Payroll Processing
• Personnel Agency Consulting
• Process Consulting
• Public Policy Consulting
• Records Management
• Regulatory Compliance
• Seminar & Training Materials
• Shredders
• Strategic Planning
• Translators
• Turnaround Consulting
• Tutoring

1.6.091

B.General Guidelines

• Class code: 47366

• Gross receipts under $ 1,000,000;

• Geographic locations as stated per Letter of Authorization;

• Risks with no claims or losses;

• Prior Acts (Declaration page required upon binding documenting existing coverage in place at equal or higher limits and the same retroactive date).

C.Submit Guidelines(Phone Call or E-Mail to Underwriter Prior to Quoting)

• Any risk with receipts greater than $1,000,000;

• Any risk with limits over $1,000,000Per Claim limit and or $3,000,000 Aggregate limit;

• Any risk requesting copyright/trademark sublimits over $100,000/$100,000;

• Business Brokering;

• Repossession;

• Safety Consulting;

• Lobbying;

• Political Campaign Management;

• Consulting services regarding class action lawsuits with 300 or more participants and high profile cases/clients;

• Sarbanes-Oxley consulting;

• Mergers & Acquisitions consulting;

• Third Party Administration (TPA);

• Preferred Employer Organization (PEO);

• Online dating services;

• Any risk or applicant located outside of geographical area(s) as stated per Letter of Authorization;

• Any risk desiring a quote for Contingent Bodily Injury or Contingent Property Damage coverage;

• Services regarding pharmaceutical or medical related consulting;

• Any risks with any incidents, claims or losses;

• Any risk classification not listed above;

• Any work for publicly held companies;

• Any lawyers, real estate agents or brokers, insurance agent or broker, mortgage broker, property manager, temporary staffing or permanent placement;

• Collection agency.

D.Prohibit Guidelines

See General Prohibit listing below.

1.6.091

III.ADVERTISING/MARKETING AGENCY & PR E&O

A.Eligible Classes

1.6.091

• Advertising Agency
• Ad Copy
• Advertising/Commercial Production
• Bindery
• Bulk Mailing
• Catalog Design
• Competitive Analysis/Research
• Content Development
• Planning/oversight
• Creative Design
• Direct Mail Dev/Distribution
• Event Planners
• Focus Groups
• Graphic Designers
• Incentive Plan Promotion
• Letter Shop
• Mailing List
• Marketing Firms
• Market Research
• Market Survey/Design/Analysis
• Media Buying / Placement
• Package/Display Design
• Photography
• Post-Production
• Press Management
• Press Release Development
• Printers
  Apply Form ME50-1005
• Promotions Design/Development
• Public Relations
• Redemption/Fulfillment Services
• Strategic Planning
• Subscription
• Target Marketing
• Telemarketing
• Trademark Development

1.6.091

B.General Guidelines

• Class code: 47366

• Gross receipts under $ 1,000,000;

• Geographic locations as stated per Letter of Authorization;

• Risks with no claims or losses;

• Prior Acts (Declaration page required upon binding documenting existing coverage in place at equal or higher limits and the same retroactive date).

C.Submit Guidelines(Phone Call or E-Mail to UnderwriterPrior to Quoting)

• Any risk with receipts greater than $1,000,000;

• Any risk with limits over $1,000,000Per Claim limit and or $3,000,000 Aggregate limit;

• Any risk requesting copyright/trademark sublimits over $100,000/$100,000;

• Ad development for lotteries, sweepstakes or games of chance;

• Any work involving use of celebrities/high profile clients;

• Mergers Acquisitions;

• Publishing;

• Project management;

• Interim management;

• Bindery to repair old or antique books;

• Wedding planners;

• Services to clients in the banking/investment/financial, pharmaceutical, biological or medical fields;

• Concert Promoters;

• Any risk or applicant located outside of geographical area(s) as stated per Letter of Authorization;

• Any risk desiring a quote for Contingent Bodily Injury or Contingent Property Damage coverage;

• Any risk with any incidents, claims or losses;

• Any risk classification not listed above;

• Any work for publicly held companies;

• Any lawyers, real estate agents or brokers, insurance agent or broker, mortgage broker, property manager, temporary staffing or permanent placement.

D.Prohibit Guidelines

See General Prohibit listing below.

1.6.091

IV.CLAIMS ADJUSTERS

A.Eligible Classes

• Small to mid size claims adjusting firms who adjust personal or commercial liability and property claims on behalf of third parties;

• Independent Adjusters;

• Public Adjusters.

B.GENERAL GUIDELINES

• Class code: 47366

• Gross receipts under $1,000,000;

• Geographic locations as stated per Letter of Authorization;

• Risks with no claims or losses;

• Prior Acts (Declaration Page required upon binding documenting existing coverage in place at equal or higher limits and the same retroactive date).

C.SUBMIT GUIDELINES (Phone Call or E-Mail to Underwriter Prior to Quoting)

• Any risk with receipts greater than $1,000,000;

• Any risk with limits over $1,000,000 Per Claim and/or $3,000,000 Aggregate Limit;

• Any risk that has experienced a claim within the past five years;

• Any risk handling cases valued at $500,000 or higher or handling any specialized lines of insurance such as:

Medical Malpractice

Healthcare & Managed Care

Aviation

• Any risk that has an authority level to settle claims on behalf of their client that is greater than the limit of insurance requested;

• Third Party Administration of Insurance & Pension Funds.

D.PROHIBIT GUIDELINES

• Risks with 50% or more of gross receipts derived from one client;

• Risks performing claims adjusting for themselves or for an owned/affiliated company;

• See General Prohibit listing below.

E.POLICY FORMS

Form Number / Edition Date / Form Title
MPL0001 / 0508 / Professional Liability Policy
U002 / 0904 / Minimum Earned Premium
ME29 / 0104 / Punitive Damage Exclusion
U094 / 0702 / Service of Suit
AP045 / 0904 / War Liability Exclusion
AP041B / 0108 / Cert Acts & Other Acts of Terrorism Exclusion
ME51 / 1005 / Claims Adjusters Coverage Extension

1.6.091

V.GENERAL PROHIBIT

General Prohibit applicable to the above:

• Accounting or software design or services;

• Computer Aided Design (CAD) or Computer Aided Manufacturing (CAM);

• Applicants with an inherent Architects or Engineering exposure;

• Airport/aircraft operations;

• Military;

• 9-1-1 or emergency response services;

• Casino/lottery/games of chance related services;

• Financial advisory;

• Tax preparation;

• Dating services with lack of protection for personal information/lack of screening;

• General Liability coverage.

1.6.091

VI.UNDERWRITING REQUIREMENTS

A.Authority

• Ability to quote up to $1,000,000/$3,000,000 limits;

• Deductible credits (MP would still apply);

• 15% credit application (subject to MP);

• Debit for prior acts;

• Authority to quote gross revenues up to $1,000,000;

• Authority to quote copyright/trademark sublimits of $100,000/$100,000;

• Authority to add an annual aggregate deductible when the deductible for each claim is $1,000 or greater. Minimum of 2x the deductible per claim.

B.Minimum PremiumS (All States Unless Otherwise Indicated)

Monoline E&O:

Limit / Minimum Premium
$100,000/$100,000 / $1,000
$250,000/$250,000 / $1,250
$500,000/$500,000 / $1,350
$1,000,000/$1,000,000 / $1,500
$1,000,000/$2,000,000 / $2,000
$1,000,000/$3,000,000 / $2,100

• Minimum Premium is $1,000 for Monoline E&O at lowest limit available ($100,000) or as otherwise indicated.

In the event of cancellation, a 25% minimum earned premium is required based on the estimated annual premium. No downward adjustment is allowed. The company reserves the right to conduct audits and adjust premium upward. Please refer to the policy for complete details.

1.6.091

VII.ADDITIONAL INSUREDS

A.UNDERWRITING ADDITIONAL INSUREDS

The relationship between our insured and the entity requesting additional insured status must be determined prior to accepting the additional insured request. The documentation confirming the nature of this relationship must be forwarded along with your endorsement request you send to the company.

Acceptable Additional Insureds include entities for which work is being done.

A policy endorsement with the applicable premium charges must always be generated prior to the issuance of an ACORD certificate of insurance.

• Use endorsement ME21 0201for E&O.

B.Additional Insured Requests To Be Declined

• Requests for forms or edition dates not listed in the Processing Manual;

• Requests for manuscript wording to any ISO or company additional insured form;

• Contractors or subcontractors performing work for our insured;

• If the insured is a subcontractor it is acceptable to add the entity(s) they are performing work for as additional insureds;

• Subcontractors when our insured is a contractor they have subcontracted with;

• Manufacturers of products purchased by our insured that are for our insured’s use for resale by our insured;

• Tenants or lessees if our insured is an owner or referred to the company or manager of the premises;

• Blanket Additional Insured requests.

C.Requests to Use Broadened “Named Insured” Language

Often entities requesting additional insured status will request the “named insured” to be used with broadened language (e.g., to include “affiliates, subsidiaries and indemnities…” or to add multiple entities on a single additional insured form). Any request that broadens the “named insured” must be referred to your Argo Pro underwriter for final approval and pricing. We will want to have a listing of the known affiliates, subsidiaries and indemnities. Generally, pricing will be additional $50 to $100 per known entity, but your Argo Prounderwriter will make the final determination.

The only exceptions are parent companies, which do not require approval. Pricing would be an additional $50per entity to be named as a parent company.

D.Approval

E&O guidelines or your Argo Prounderwriter must specifically approve all Additional Insured endorsements. Risks that do not meet these requirements should be treated as Submit Risks to your Argo Prounderwriter.

A policy endorsement with the applicable premium charges must always be generated prior to the issuance of an ACORD certificate of insurance.

E.Primary And Non-Contributory For Specified Additional Insureds

Primary language that must be manuscripted to your Additional Insured endorsement is as follows:

“It is further agreed that this insurance shall be primary and non-contributory but only in the event of a named insured’s sole negligence.”

• Blanket primary is not available; and

• $250 flat, fully earned charge per entity.

1.6.091

VIII.PROFESSIONAL LIABILITY RATING

A.Premium Computation

• Apply base rate per $1,000 of gross sales, with no prior acts;

• Apply increased limit factor;

• Apply deductible credit;

• Apply minimum premiums;

• Apply prior acts debits, if any;

• Apply other debits/credits, if applicable.

B.Rates (Assuming a $1,000,00/$1,000,000Limit)

Revenue / Base Rate
$0– $500,000 / 3.00
$500,000 – $1 million / 2.75

C.INCREASED LIMIT FACTORS(MP Applies)

Limit / Factor
$100,000/$100,000 / 0.50
$250,000/$250,000 / 0.75
$500,000/$500,000 / 0.80
$1,000,000/$1,000,000 / 1.00
$1,000,000/$2,000,000 / 1.15
$1,000,000/$3,000,000 / 1.20

D.Deductible credits (MP Applies)

Deductible / $1,000 / $2,500 / $5,000
Credit / 1.00 / .97 / .95

E.Prior Acts Step Factor

Years of Prior Acts / Prior Acts Debit
0 / 1.00
1 / 1.15
2 / 1.25
3 / 1.35
4 / 1.40
5 and beyond / 1.50

F.Extended Reporting Period Premium Computation

One Year / Three Years / Five Years
100% / 175% / 250%

Please refer to policy form MPL0001 0801 Section VI – Extended Reporting Periods for conditions of the extension.

G.Additional Insured Endorsement

All premium charges for additional insureds, primary additional insureds and waivers of subrogation are:

• Flat;
• Fully Earned; and
• To be charged over and above the minimum E&O premium that applies.

Once an additional insured endorsement with a premium charge has been issued, the broker does not have authority to go back later and cancel the endorsement and reverse the premium charges without the approval of your Argo Pro underwriter.

List the premium charge for any additional insured separately on the E&O declaration page. The additional premium should be in addition to the Liability premium.

• The charge for EACH E&O Additional Insured is $100. Submit for approval if over 10 Additional Insureds.

H.*DEFENSE COSTS OUTSIDE OFLIMITS OF INSURANCE

Defense Outside Endorsement:

• ME42 0705 to be used after submitting to underwriter;

• Charge made as follows: Debit of 1.15 x total policy premium with MP of $500.

I.*Waiver of Transfer of Rights of Recovery

Waiver of Transfer of Rights Endorsement:

• ME48 0707 to be used after submitting to underwriter;

• Charge made as follows:Debit of 1.10 x total policy premium with MP of $250.

J.PERSONAL/ADVERTISING INJURY COVERAGE

Personal/Advertising Injury Endorsement:

• Coverage is afforded in form MPL0001.

K.*Contingent Bodily Injury

Contingent BI Endorsement:

• MPL003 to be used after submitting to underwriter;

• Charge made as follows:Debit of 1.15 x total policy premium or MP of $500.

L.*CONTINGENT PROPERTY DAMAGE

Contingent PD Endorsement:

• MPL002 to be used after submitting to underwriter;

• Charge made as follows: Debit of 1.15 x total policy premium or MP of $500.

M.*AMENDATORY – COPYRIGHT, TRADE DRESS, TRADEMARK – SUB-LIMIT

Amendatory Copyright Endorsement:

• MPL004 to be used. Submit limits in excess of $100,000/$100,000 to underwriter.

Limit / Factor / Minimum Premium
$250,000/$250,000 / 1.10 / $175
$500,000/$500,000 / 1.12 / $225
$1,000,000/$1,000,000 / 1.15 / $500

1.6.091