The application was never returned and coverage was not replaced. Later an uncovered workers compensation loss occurred. The insured indicated they thought the agent was keeping coverage in place with another carrier. The company's responsibility is contractual, relating to the insurance policy. The agent's responsibility is professional, relating to a duty to perform.
Some agents believe that when the company cancels, their obligation is also terminated.
In many cases, however, the insured will expect the agent to maintain coverage in place through another carrier. In these two cases, the agents did not terminate their responsibility to provide insurance for their clients. One agent did send an assigned risk application but did not follow up to be sure the completed application was submitted. In both claims the insured said they were not informed and were misled as to their insurance protection. The uncovered losses led directly to the errors and omission claims against the agents.