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Errors and omissions clause

Ensures that the reinsurer is not relieved of liability if the reinsured has inadvertently made an error or omission in supplying risk information to the reinsurer. Errors and omissions must be corrected as soon as possible. Some E & O clauses apply to errors and omissions by either party. The aim is to place the parties in the position that would have existed in the absence of the error or omission.
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A provision in reinsurance agreements that is intended to neutralize any change in liability or benefits as a result of an inadvertent error by either party.

ERRORS AND OMISSIONS COVERAGE (E&O)

Also known as E&O insurance, this form of coverage protects the policy-holder for negligent acts and omissions that may harm customers. Errors and/or omissions are usually interpreted as mistakes and/or failure of your firm to perform services as promised in a contract. Coverage includes defense and court costs as well as the amount of any claim or judgment up to the limits of the policy. E&O is commonly written to protect insurance agents. (See Professional Liability Insurance).

Errors and Omissions Insurance

Liability insurance policy that provides protection against loss incurred by a client because of some negligent act, error, or omission by the insured.
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Policies generally available to the various professions that require protection for negligent acts and/or omissions resulting in bodily injury, personal injury and/or property damage liability to a client. For example, law firms are often exposed to the claim that inadequate or improper legal advice was provided resulting in a claim by the client that they suffered a loss. (02) A form of insurance which covers losses resulting from financial institutions failing to effect appropriate insurance coverage.

Escalation

(01) Increase in the value of the property insured during the period of Insurance. (02) Provision for automatic increases on some defined basis in premiums and sums insured.
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UK: Annual increase in the level of annuity, policy benefits or limits based on a fixed percentage or in line with an index, e.g Retail Price Index, subject to an upper limit, e.g. 5 per cent. Dynamised pensions have automatic increases in the pension payments or contributions. Builders’ risk marine risk policy escalate to cover a possible increase in the insured value of the vessel under construction.
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UK: provision for automatic increases on a defined basis in premiums and sums insured.

Escalation Clause for Fire Insurance

To allow automatic regular increase in the sum insured throughout the period of the policy in return for an additional premium to be paid in advance. Selected percentage increase shall not exceed 25% of the sum insured. The additional premium at 50% of the final rate to be charged on the selected percentage increase in advance. Sum insured at any point of time would be assessed after application of the Escalation Clause which is applicable all policies (and not only reinstatement value policies) covering Building, Machinery and Accessories only and shall not apply to stock.

Escalation Clause under Standard Fire and Special Perils Policy

In consideration of the payment of additional premium amounting to 50% of the premium produced by applying the specified percentage to the first or the annual premium the sum insured for the prescribed items shall be increased each day by an amount representing 1/365th of the specified percentage increase per annum. At renewal the insured shall notify the sums to be insured under each such specified items and the specified percentage increase required by the forthcoming period of insurance.