This has become an E & O issue (Error & Omissions). They agency should have this insurance and you will need to file a claim against it to get back your money plus damages. As a former agent, that is a nightmare since it would cause litigation, and a large rate increase to their already expensive yearly premiums. Most agency's use this as an ultimate last resort when someone in their office screws up. I would threaten legal action in hopes for the agency to make it right and pay back the lost money. If they don't, then go after them... it seems like a pretty solid case. Don't be afraid to get back what's yours if there not willing to accept responsibility and make it right.