Friday, May 28, 2010
Thursday, May 27, 2010
Professional and Management liability claims have long "tails" on them. A wrong can occur in 2008 and not be realized until 2009. Once a claim is filed for that wrong, which policy responds: 2008 or 2009?
Claims-made policies state that the policy in effect when the CLAIM is MADE will be the policy to respond. As such, if the policy doesn't renew, then the coverage window ceases.
In the above example, a wrong occurred in 2008 and was discovered in 2009. If the insured chose not to renew their 2009 policy, then he or she would not have a policy to cover that claim - even though the wrong occurred in 2008, when they did have a policy in effect. Get it?
When a Claims-Made policy cancels or is not renewed, the policyholder has the option to purchase an Extended Reporting Period (ERP or Tail), which will extend that window allowing him/her to report claims resulting from activities when the coverage was in force. Any agent worth his or her salt should recommend an ERP to clients once a Claims-Made policy ends.
Wednesday, May 26, 2010
Did you know that Abraham Lincoln purchased a fire insurance policy from The Hartford to protect his home in Springfield, IL? He bought the policy in 1861, shortly after he had been inaugurated as President.
Hartford has been a reliable company partner for us. Congratulations on 200 years. You look great!
Monday, May 24, 2010
Sunday, May 23, 2010
If you serve on the Board of a Nonprofit organization, ask the organization how it will protect you if you are named in a Liability suit. Directors & Officers Insurance protects Board members individually if sued for mismanagement of the organization. Many smaller nonprofits have tight budgets and choose to go without this protection.
Directors & Officers Insurance sounds expensive, and it sometimes can be. However, if you're a small organization, you may be surprised at how affordable the coverage can be. Ask an agent about it.
One of my brokers, Victor O. Schinnerer & Company, Inc., developed a great article on the dangers of going without D&O coverage. This is required reading.
8 Compelling Reasons to Insure Your Non-Profit Organization
Here are some snippets:
Reason #2: Insurance protects your organization’s assets, as well as the personal assets of people that sit on the board. Remember, even frivolous claims cost you time and money to defend yourself.
Reason #4: Staying continuously insured could reduce your costs. Firms that renew their coverage may be eligible to receive longevity credits just for staying continuously insured in our program.
Reason #5: Buying and keeping Directors & Officers coverage is a much better option than relying on the Volunteer Protection Act for help. The Act/Law does not prevent a volunteer from being sued. In addition, compensated individuals (the most obvious being compensated employees and directors or officers) are not provided protection under the law.