Where the broker's E&O exposure hides in a policy

A broker’s errors-and-omissions exposure rarely starts with a bad recommendation. It starts with a document nobody compared: a policy that says something different from the binder, delivered to a client who reasonably assumed the broker had checked it.

This post is about where those differences hide. It describes the kinds of drift that policy checking exists to catch, using the illustrative examples in InsightProofing’s demo book. It makes no claim about how often each happens in the market; it describes what to look for.

In short

The headline limit is rarely wrong. The drift is in deductibles, sublimits, forms, dates, towers and arithmetic.
Two questions, not one: did the carrier issue what was bound, and what changed against the expiring?
Wording hides differences: the same field carries a different label on every carrier’s paper.
The record matters as much as the check: what was found, what was asked, what the client was told.

Seven places drift hides

Where	What drifts	Illustrative example in the demo book
Retentions	Deductibles and retentions that are higher than bound.	GL deductible $5,000 bound, $10,000 issued
Sublimits	A sublimit lower than quoted, or quietly lower than expiring.	Cyber extortion $1M quoted, $500K bound; flood $10M → $5M at renewal
Forms	An endorsement the contracts require missing; a restrictive one added; an edition change.	Waiver of subrogation missing; total pollution exclusion added
Lists	Additional insureds, exclusions, subjectivities.	A convention partner bound as additional insured, not on the policy
Dates	Claims-made dates reset; renewals that don’t start the day the expiring ends.	D&O prior-and-pending date reset from 2019 to inception
Towers	Layers that don’t stack; underlying that doesn’t match.	A $5M gap between layers 2 and 3
Arithmetic	Totals that aren’t the sum of their parts.	Premium + taxes + fees $500 more than the stated total

Proofing and comparison are different questions

flowchart LR subgraph Proofing["Proofing: did they issue what we bound?"] Q["Quote"] --> B["Binder"] --> P["Policy as endorsed"] end subgraph Comparison["Comparison: what changed for the client?"] E["Expiring"] --> R["Renewal at quote,
binder and policy"] end P --> D{"Deliver?"} R --> D D --> S["Summary names every
narrowing in plain words"]

A policy can pass proofing and still carry bad news: a flood sublimit halved at renewal, agreed at quote, bound and issued exactly. That is not the carrier’s error to correct. It is the broker’s responsibility to make sure the client heard about it. InsightProofing reports both questions separately and a control requires the delivery summary to name every narrowing.

Why wording is the hard part

Every carrier prints its own forms. “Per Occ Limit”, “Each Occurrence” and “Each Occurrence Limit” are the same field; “Total Due”, “Total Payable” and “Grand Total” are the same field. A comparison that runs on labels will report a dropped field and a new one where nothing changed, and train people to ignore its output. Proofing on canonical fields is what makes the output trustworthy enough to act on.

The Fields zone: the canonical coverage model for general liability — Fields: one row per canonical field, each document’s value with the carrier’s own label and page under it. The named insured and the deductible differ.

The record is part of the defence

When a client asks, after a loss, “did you know?”, the useful answer is a record: what was checked, what failed, what was asked of the carrier and when, what was waived and by whom, and what the client was told at delivery. InsightProofing writes each of those to the check’s decision record and builds a proofing record report from it for the E&O file.