Review Your E&O Carrier’s Requirements for Carrier Writing Standards. There’s a myth going around that if an agency writes with a carrier rated B+ or better by A.M. Best, their E&O policy will cover them. Based on the E&O policies I have read, this is mostly true but definitely not always true. Some E&O carriers add a size requirement so that the carrier has to be B+ and a specific size requirement. Additionally, some E&O carriers require a rating better than B+.
Furthermore, some people mistakenly think all “B” ratings are the same so they think a “B” rated company qualifies. It does not in this scenario. That extra “+” symbol is critical as the requirement is clearly a “B+”, not a “B.”
On the other hand, an agency writing with some companies that have no rating may still have coverage if that company meets other requirements such as being part of, owned or associated with a government entity. Small but important differences exist between E&O policies regarding this point so read your policy carefully if you are writing with unrated carriers.
Unrated or poorly rated carriers are a particular problem in some states relative to health insurance. In these states, agencies are almost forced to write with poorly rated carriers if they want to write health insurance. If after reading your policy it appears the agency has no coverage for business placed with these carriers, then contact your E&O carrier. At the least they need to be advised and sometimes, they will make exceptions in these particular situations. At the very least, what harm is done by asking?