Due to the litigious nature of society today, professional liability insurance has become increasingly important in many industries, especially the Title Industry.
Professional liability policies are written on a claims-made and reported basis, covering claims that occur subsequent to the retroactive date stated in the declarations and which are first made against you and reported to the company while the policy is in force. For this reason, maintaining prior acts coverage is extremely important. Without prior acts coverage, your covered acts are limited to those performed and reported during the current policy period only. While switching carriers, please be aware of the significance of the retroactive date in your policy.
When seeking Professional Liability insurance, it is easy to be mislead by some carriers offering a much lower premium than you had paid previously. We'd advise you to be very cautious in this situation. It is common for these policies to be written retro-inception (with no prior acts coverage) or placed in the surplus lines market. The surplus lines market can be dangerous, it is not backed by the insurance guaranty fund in the case of insolvency. Therefore, it is important to work with an admitted carrier. Check the declarations page of the policy to make sure it does not have a surplus lines warning on it. The National Conference of Insurance Guaranty Funds is a good source of information on this topic, including excluded lines of business, assessment information, and claim parameters.
For more information please give us a call and we'll be happy to answer any questions you might have regarding professional liability.
