Alberta General Insurance Level 1 Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer regarding the minimum coverage of Errors and Omissions (E&O) Insurance that all agents and brokers must carry is $2 million. This level of coverage is designed to protect professionals working in insurance from claims of negligence, inadequate work, or mistakes made during the course of their professional services.

Having a minimum of $2 million in E&O Insurance ensures that agents and brokers have sufficient financial resources to cover potential claims arising from their work. It reflects a standard set by regulatory authorities to safeguard clients and maintain confidence in the insurance industry. Additionally, this higher coverage amount is often seen as vital, given the potential costs involved in legal defenses and settlements that might arise from disputes related to professional services.

While lower coverage amounts might be sufficient in other professions, the complexities and potential liabilities in the insurance sector necessitate more significant coverage to adequately protect practitioners.