Arkansas Insurance Adjuster Practice Exam

Errors and Omissions coverage in an Equipment Breakdown Protection policy provides coverage for:

1. damage not covered due to the insured's mistake or omission

2. damage after a business mistake or omission required by the insured

3. losses due to insurer's error or omission

4. losses to the insured's customers due to insured's error or omission

The correct answer is: damage not covered due to the insured's mistake or omission

Errors and Omissions coverage in an Equipment Breakdown Protection policy provides coverage for damage that is not included under the policy due to the insured's mistake or omission. This means that if the insured fails to adhere to specific guidelines, fails to disclose important information, or makes other errors or omissions, the coverage will still protect them against any resulting damage. The other choices are incorrect because they either refer to coverage for losses related to the insurer's errors or the insured's customers' losses, which are not covered by this type of insurance. Additionally, option B suggests that the coverage is only applicable after a business mistake or omission required by the insured, which is not the case as the coverage also includes unintentional or accidental errors and omissions.