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When daily money managers practice together, questions often arise regarding who exactly is covered under their errors and omissions ("E&O") insurance policies. Related questions concerning the coverage implications of various forms of doing business also come up from time to time.
As to this latter question, the AADMM-endorsed Daily Money Manager Professional Liability ("MML") policy which provides E&O coverage, as well as optional general liability insurance, covers sole proprietorships, limited liability partnerships and companies, as well as corporations, including professional corporations, so long as such entities are listed as the Named Assured in the policy declarations.
Any daily money managers who are, or during the policy period become, a stockholder, member or partner in the Named Assured entity, including incorporated partners, qualify as Assureds under the policy, but only for acts on behalf of the Named Assured. So, for example, if a daily money manager is working for multiple firms or even "moonlighting" on an occasional basis, coverage would apply only with respect to work performed on behalf of the specific entity listed as the primary Named Assured.
Employees of the Named Assured, whether or not qualified or acting as daily money managers, are also deemed Assureds under the policy. Individuals hired and paid as independent contractors can qualify as covered Assureds as well, so long as they are performing services as "Daily Money Managers", as that term is defined in the policy. New hires brought on during the policy period fall within the scope of coverage as well. While notification to underwriters of the addition of new daily money managers is generally required, no such mid-term notice requirement applies to the hiring of support staff and other such non-professional employees. Again, however, coverage for any of these persons is limited to claims arising out of work performed for the Named Assured entity.
Former employees, independent contractors, partners, members or shareholders of the Named Assured continue to be covered under any current or subsequent policies for claims arising out of work previously performed for the Named Assured or for a covered predecessor entity. Predecessor entities must be advised to, and accepted for coverage by, underwriters to be considered an Assured under the policy. The estate, heirs, executors, administrators, assigns and legal representatives of deceased Assureds are likewise viewed as Assureds under the policy.
In conclusion, accurately identifying the Named Assured as well as any predecessor entities is of primary importance. All other Assured relationships flow from that designation.
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