An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following EXCEPT?

The reasoning behind the answer lies in the purpose of errors and omissions (E&O) insurance, which is designed to protect professionals and businesses from liabilities arising from negligent acts, errors, or omissions in the course of providing services.

In the context of an insurance agency, E&O insurance would typically cover situations where a client alleges negligence in service, such as failing to provide adequate advice or making incorrect statements to a client regarding coverage. This insurance also covers claims arising from missed deadlines due to the agency's actions.

However, the scenario in which the agency loses commission income from policies not issued by the insurer does not fall under the protection provided by an E&O policy. This is because E&O insurance does not cover lost income or profits as a result of business decisions or operational issues that do not involve errors or omissions in service provision. Essentially, the loss of commission income is a consequence of business risk rather than negligence or mistakes made in the delivery of professional services, which is the focus of E&O insurance coverage. Therefore, this situation is the exception in the context of what E&O insurance would cover.