E&O Insurance is complicated. It is important to use an experienced agent, preferably one that has numerous carriers to choose from. Some carriers are priced more competitively than others in certain states and the coverage offered may vary. An experienced agent can guide you through this sometimes cumbersome process, saving you not only money but time and aggravation.

E&O Insurance policies are called “claims made” policies. This means that when your coverage ends, so does your ability to report claims. There are three important dates to be aware of listed on your policy’s declarations page. The first is your policy’s Effective Date. The second is the policy’s Expiration Date and the third is your Prior Acts or Retro Date. Should your coverage lapse, your RETRO date is gone and it is as if you never had coverage. Take great care to make sure this doesn’t happen. Most claims happen months or even years after the actual issue itself.

Should you be leaving the business, an extended reporting period may be purchased to cover potential claims and extend coverage. Depending on the carrier, you may have the right to purchase an extended reporting period of one year or in some cases unlimited coverage for up to 250% of the policy’s annual premium. Again this option varies from carrier to carrier so if you think you may be retiring in the near future, you should pay close attention to this provision within your current policy.

The bottom line: Having an experienced agent working for you can help de-mystify the sometimes confusing world of E&O.


by Aliah Franco