Friday, January 27, 2012

"Retro" is always in fashion with E&O insurance

Retro is more than just a fashion statement.  It is the beginning of time as far as E&O policies are concerned.  Most E&O policies are "Claims-Made" policies, which means that the policy that is in force when the claim is made will be the policy that responds. 

Often, E&O claims are not discovered until much later.  For example, a consultant may forget to inform a client on a pertinent point in 2011, but the client doesn't incur damages as a result until 2013.  Under "Claims-Made" the policy in effect in 2013 will be the policy that responds to the claim.

Your E&O policy declarations will show a "Retroactive Date" or "Retro date."  The policy will not provide coverage for acts (or errors & omissions) that occurred before this date.  In order to ensure continuous coverage, make sure the Retro Date doesn't change as your policy moves forward year after year.

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