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Review your coverage every year

RESSI — Tue, 26 May 2009 19:39:00 GMT

The coverage included in your Errors & Omissions Insurance quote is based on the information you report in the application. If the application reflects income from a particular activity, the carrier will quote with coverage for that activity (if the coverage is available). For example, if you reported income from the sale of personally owned property, the carrier would include an endorsement (if available) that specifically extends coverage to that activity.

Whether you realize it or not, your business changes from year to year. If these changes are not reflected on the application, the policy may not include the changes necessary to extend coverage for all your business activities. Even worse, the carrier you’re insured through may not even be able to offer the coverage needed.

It is important to review your quote and policy every year to ensure that the policy includes the coverage needed. It is best to review the coverage at quoting time. That way any necessary changes can be made prior to binding. Talk to your agent about your business so they are able to find the right carrier and coverage for your needs.

By Aliah Franco

Extended Reporting Period – When to Get One

RESSI — Fri, 05 Dec 2008 19:21:00 GMT

An Extended Reporting Period (ERP) is just that – an extended amount of time to report claims under your policy. Understanding the meaning is easy. Knowing when to get one and why it’s so important is not so simple.

Your prior acts or retroactive coverage is by far the most valuable portion of your E&O Insurance policy. This is the date in which you began and maintained current, continuous coverage. An ERP should be purchased anytime you lose your retroactive coverage. Prior acts coverage is lost when a policy is cancelled or expires.

An ERP can generally be purchased for 12, 24, or 36 months; meaning you will have 12, 24 or 36 months to report claims to the carrier after the policy is cancelled or expired. In some cases, an unlimited ERP can be purchased. You should review your policy or contact your agent to find out what is available. The cost of an ERP varies by carrier and is a percentage of the current policy premium (usually ranging from 100% to 250%).

If you have retired or you are selling your company, an extended reporting period endorsement is necessary to ensure that you and your agents are properly covered should a claim arise after the cancellation date of the policy. To avoid having to purchase an ERP due to a lapse in coverage, make sure to renew your policy on time each year. Some carriers may give a day or so leeway, but some do not and they are not required to in any way.

It is beneficial to have an agent to assist you in the renewal process. They will make sure that you have all the documents needed to renew your policy on time.

Retroactive Coverage: What is it and why is it important?

RESSI — Tue, 25 Nov 2008 19:05:00 GMT

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

Welcome

Phoenix Eight — Tue, 18 Nov 2008 15:27:30 GMT

Welcome to my blog. Please check back soon for new entries.