Frequently Asked Questions
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Selecting the amount of liability insurance coverage you purchase is unique to your risk-taking philosophy. Two individuals with the same set of circumstances can each come up with different limits. You know your business and your clients better than anyone else. Each policy limit is unique to the business. The underwriter will set a maximum available for your business, but below that maximum level you should choose the limit for your professional liability insurance that best balances the cost to your comfort level.
You may change your professional liability coverage limits on the policy anniversary date. Special consideration should be used when you renew your policy so that you select the appropriate limit to match your risk-taking appetite. It is possible to change in most instances when required by contract.
If you hire an employee mid-term, please contact your representative as soon as possible to get the appropriate paperwork for your policy. Generally, there is no charge to add mid-term if the hire happens after the first 30 days your policy is in effect.
Likewise, if you lose an employee mid-term, please contact your representative as soon as possible to get the appropriate paperwork for your policy. Generally, there is no decrease to remove an employee mid-term if the departure happens after the first 30 days your policy is in effect.
When looking at a deductible, you should choose a deductible that you can afford to pay. Raising the deductible will generally lower the premium, but in many cases, the savings are not as much as you might expect. Deductibles may be “per claim” (applying in full to each claim); or they may be “aggregate” (applying only once in a policy year, regardless of the number of claims). Aggregate deductibles are not always available, and when they are available the insurance premium with the aggregate deductible is higher than it would have been with a per claim deductible.
The prior acts (or retroactive date) date establishes how far back into the past, your professional liability policy will cover your acts or omissions. If your policy does not have a prior acts date, this will generally mean that there is no limit to how far in the past your policy will provide coverage. If you have been maintaining proper coverage since the start of your business, you will probably have either no prior acts date limitation or one sufficiently far in the past so as to allow coverage. However, any new coverage will normally be written with a prior acts date that is the same as the inception date of the new policy.
The extended reporting period endorsement is often referred to as tail coverage. Under certain circumstances, this feature can be useful because claims-made professional liability policies cover only claims that are made and reported during the policy period. Most insurers offer an optional extended reporting period for a specific time period. The extended reporting period only extends the time you can report a claim and does not extend the policy term.
There are two basic insurance contract types: claims-made and occurrence. These policies are fundamentally different in the way that they trigger coverage for a claim. Occurrence policies provide coverage for damage that occurs during the policy period (like your home or auto insurance). A claims-made policy provides coverage for claims for which the insurer receives notice during the policy period, regardless of when the damage occurred. This is why the retro-active date is so imperative (you have coverage for work performed from your retro-active date – forward).
The primary factor involved in calculating the rate for a policy is the number of employees in the company and how many “years of prior acts” that each will have covered. Additionally, the limits of liability and the deductible that you choose will be significant factors. Finally, modification to the premium will be based upon your insurance history. Your professional liability insurance premium will be unique to your business.
Generally, we will respond to your request for a quote in 48 to 72 hours. You will need to submit a fully completed application. The key step in achieving a quick turn-around is to fully answer each question on the professional liability application.
You will need to send us written notification of the new or additional location, along with a copy of the new letterhead that reflects the change.