Top Posts Tagged with #retroactive date

What is a Retroactive Date on Professional Indemnity Insurance?

The retroactive date on professional indemnity insurance is the date from which you are first covered. Any work or service carried out prior to the retroactive date is not covered.

Even if you have switched insurer multiple times over the years, so long as there have been no breaks in your cover, then you will be covered for any work completed throughout the entire duration that you have held a…

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#insurance claims #professional indemnity #retroactive date

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Puzzler the Need for Attorneys Professional Answerability Indemnity?

Attorneys Daedalian Liability insurance (PL), also known inasmuch as errors & omissions (E&O), is a form of liability insurance that helps champion individuals, such as lawyers who care for professional advice and services that could come under scrutiny by clients. <\p>

A company or responsibility generally purchases this type of policy on route to protect their attorneys, as headstream being as how the business from bearing the in color cost relative to defending regardless of a slovenry claim made by a client, and any damages awarded in the likes of a civil lawsuit. The coverage focuses on alleged failure to perform at the part in reference to, financial loss caused by, and error or omission passageway the dessert sold by the policyholder. <\p>

These types of asserted claims that assail professional services are envisaged potential causes for legal action that would not be covered by a more miscellaneous cast malpractice insurance policy, which addresses more direct forms of harm. Professional Liability coverage capital ship prevail designed unto provide as representing the defense costs, over and above when legal countermove turns emunctory to abide groundless. Coverage, yet, does not add impeachable prosecution, fusil a wide peg respecting potential liabilities under civil law that are not enumerated in the judgment, but which may be found subject to other forms of insurance. <\p>

How coverage works <\p>

Professional Liability family maintenance policy policies are primarily prototype up based on a claims-made basis, meaning that the discreetness irreducibly covers claims brought about during the crap shooting period. Typically, a policy devotion provide indemnity against the guaranteed against deliquescence arising excepting any claim or claims made during the policy period adieu reason of any covered neglect, error or omission committed by the handling of the insured's professional business during the policy triseme. <\p>

Any claims related in consideration of incidents occurring whilom the coverage was active may not be covered, all the same, in some instances, some policies may have a retroactive contemporary, such that claims made during the interinsurance period but which relate versus an incident after the retroactive date (where the retroactive date is earlier or else the inception date with respect to the policy) are covered.<\p>

Attorneys punter than any other profession discern how devastating lawsuits make it be met with distich emotionally and financially, even if the allegations are meritless. That is tough proposition it's so ascendant for ruling class to carry Professional Liability court bond or E&O coverage. The amount of limits will depend about the scope of the practice - if it's a firm, the size of the firm, the number of attorneys, honor point whether it's a any maker. A professional insurance beauty shop that specializes in Coached Liability insurance stack the help design the fitten desire.<\p>

#general liability insurance #liability insurance policies #carry professional liability #retroactive date #works professional liability

Mississippi Court Holds Insurance Broker Testimony Not Professional Services

In its recent decision in Henson v. United States Liability Insurance Company, 2012 U.S. Dist. LEXIS 101963 (N.D. Miss. July 23, 2012), the United States District Court for the Northern District of Mississippi had occasion to consider the boundaries of what constitutes professional services under an insurance broker’s errors and omissions policy; in particular, whether giving deposition testimony constitutes “professional services.”

The insured, Mid-Delta Insurance Agency, was insured under a professional liability policy issued by Lloyd’s for the period October 8, 2009 to October 8, 2010. The policy had a retroactive date concurrent with the policy’s inception, meaning that the insured had no coverage for wrongful acts committed prior to October 8, 2009.

At issue was coverage for the insured’s alleged error in applying for a client’s insurance policy in June 2009. The coverage was placed with Republic Insurance Company, but Republic later denied coverage for a significant loss on the basis of misrepresentations contained in the policy application. Mid-Delta was sued by its client for its alleged errors, and Mid-Delta thereafter sought a defense under the Lloyd’s policy. Lloyd’s denied coverage on the basis that the wrongful act happened prior to the policy’s retroactive date. Mid-Delta nevertheless argued coverage was triggered because the individual broker responsible for completing the application with Republic made statements in a January 2010 examination under oath (“EUO”) taken by Republic that formed part of the basis for Republic’s decision to deny coverage. Mid-Delta, therefore, contended that it was the examination under oath that was the “wrongful act” and that the broker’s testimony at the EUO constituted “professional services.” Lloyd’s argued, on the other hand, that it was the June 2009 completion of the Republic application that was the “wrongful act,” not testimony given at an EUO used to confirm a “wrongful act.”

In analyzing this issue, the court looked to the policy definition of “professional services,” which was defined in pertinent part as “services the Insured performs for others in their capacity as a licensed agent or broker, general agent, managing general agent or underwriter, program administrator …” and included specific services such as consulting, appraising real estate, benefits counseling, premium financing, notary public, serving as an expert witness, e-commerce services, and risk management. Noting that this definition was specifically detailed, the court concluded that giving testimony in an EUO did not constitute professional services, stating:

Henson did not give his sworn statement while marketing, selling, or serving insurance products. Instead Henson answered questions regarding his alleged errors in completing [the] insurance application. Henson was not providing professional services; he was making statements about events which transpired in June 2009. The court cannot conclude that testifying about an insured’s allegedly wrongful act is in itself a wrongful act or professional service covered by the E&O policy.

Having concluded as such, the court went on to address whether the October 8, 2009 retroactive date in the policy was proper. Mid-Delta showed evidence that it had requested to purchase prior acts coverage. Lloyd’s, however, had rejected this request since Mid-Delta had allowed its prior professional liability to lapse. The court found Lloyd’s decision in this regard reasonable, and observed that Mid-Delta could have avoided a gap in its coverage by purchasing an extended reporting period from its prior carrier. In passing, the court noted that as an insurance-related company, Mid-Delta “should have known that the [Lloyd’s] E&O policy did not provide coverage for prior acts.”

#Professional liability #Retroactive date

Pennsylvania Court Addresses Application of Retroactive Date

In its recent decision in A.P. Pino & Associates, Inc. v. Utica Mutual Ins. Co., 2012 U.S. Dist. LEXIS 92472 (E.D.Pa. July 3, 2012), the United States District Court for the Eastern District of Pennsylvania had occasion to consider the application and enforceability of a retroactive date in a professional liability policy.

Utica Mutual insured A.P. Pino & Associates (“APA”) under two consecutive Life Insurance Agents and Brokers Errors and Omissions policies for the periods October 15, 2009 through 2010 and October 15, 2010 through 2011. Both policies contained an October 15, 2009 retroactive date and stated that coverage was unavailable for wrongful acts that took place prior to this date.

Prior to October 15, 2009, APA’s principal, Pino, was insured under a professional liability policy issued by a different carrier. The named insured was Pino rather than APA. It was only when Pino decided to grow his business and hire a number of producers that he decided to switch carriers and purchase a policy in APA’s name. He claimed to have selected Utica because Utica offered prior acts coverage. Such coverage, however, was not automatically granted. Utica determined whether to offer prior acts coverage, or use a retroactive date, based on whether the insured was a new business entity or an entity with prior errors and omissions coverage. Because APA had not previously been insured under a professional liability policy (i.e., because Pino’s prior coverage was in his name only), Utica decided to treat APA as a new business and thus issued the policies with a retroactive date concurrent with the inception of the first policy issued to APA, i.e., October 15, 2009.

Although the retroactive date was fully disclosed in all phases of the underwriting for both policies (i.e., the quotes, binders, etc.) and was clearly identifiable in the policies themselves, Pino later claimed that he was not aware of the retroactive date, or its effect, until he later sought coverage for a loss. The loss involved a lawsuit filed in November 2010 by an APA client arising out of Pino’s advice concerning life insurance. Because the advice was given in Spring 2009, Utica denied coverage based on the October 15, 2009 retroactive date. APA, nevertheless, argued that Utica had a duty to defend and indemnify APA based on its reasonable expectations that the policies issued by Utica provided prior acts coverage, or in the alternative, that the policies should be reformed to reflect these expectations.

The court agreed as an initial proposition that the retroactive date was clearly and unambiguously stated in the policy. Pino’s assertion that he “did not read the policies” did not require the conclusion that Utica could not enforce the retroactive date. As the court explained, “if a policy is ‘plain and free of ambiguity, and could have been readily comprehended by [an insured] had he chosen to read them,’ then the parties are bound by the signed agreement.” The court further held that the doctrine of reasonable expectations did not compel a different result, since the doctrine is limited to “unsophisticated non-commercial insureds” and only to protect insureds from deceptive language. Noting that Pino was not an unsophisticated insured and that the retroactive date was not the result of insurer deception, the court found the doctrine inapplicable.

APA also argued that the policies should be reformed to provide the prior acts coverage it had requested when it applied for the initial policy. Specifically, APA argued that a mutual mistake existed because APA was mistakenly treated by Utica as a new business enterprise. The court rejected this argument on the basis that Utica’s treatment of APA as a new business was not based on a mistake, but rather based on APA’s lack of prior insurance coverage. The court further rejected APA’s argument that there was a unilateral mistake on Utica’s part, explaining that:

While Plaintiffs may have been unilaterally mistaken that APA would receive prior acts coverage, Plaintiffs have not presented a scintilla of evidence that Utica engaged in either active fraud or had good reason to know of Plaintiff’s unilateral mistake, thereby precluding reformation of the policy.

#Retroactive date #reasonable expectations #Reformation