What is a Claims Made Policy?
28 September 2018
Category: Claims
28 September 2018,

Nearly all Errors & Omissions (E&O) insurance is provided in the form of a “claims-made” policy. Claims-made policies require that the policy be in effect at the time a claim is made or reported regardless of when the wrongful act took place. This is different from an “occurrence” policy which responds even after a policy is canceled or has expired as long as the incident occurred during the in-force policy period.

Carefully consider all of the transactions in which your firm has been involved. Even if your policy was active while you worked on a transaction, if a claim is brought against you as a result of that transaction after you have let your claims-made policy lapse, you will not be covered. It would be as though the policy never existed.

Many claims-made contracts include a “retroactive” or “prior-acts” date. This is the date from which your uninterrupted coverage begins and the policy provides coverage for wrongful acts that occur on or after this date. Policies without a retroactive date are referred to as “full prior-acts” coverage policies.

Understanding your E&O policy and its coverages is vital to protecting your assets. Some title professionals may consider an E&O policy with severe limitations or even going without coverage to reduce expenses. However, dropping your E&O coverage or switching to a more restrictive option may cost more than you think. Keeping your E&O coverage in force is the best way to protect your firm against future claims.

Copyright © 2018 Title Industry Assurance Company RRG. All rights reserved.

This information is provided for the purpose of illustration. The coverage provided is that set forth in the terms, conditions, and limitations of the policy of insurance.

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