Insurance provisions Hmmmm... - REO Property Preservation Forum
 
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post #1 of 7 (permalink) Old 07-31-2013, 01:46 PM Thread Starter
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Insurance provisions Hmmmm...

I'm shopping PL and E&O and I've run into something I find somewhat interesting.

Most of these policies are written on a "claims made and reported" basis. That generally means that any claims covered must arise from activities performed after the policy is in force, not before (which makes sense) but also that any claims REPORTED must be filed while the policy is in force. Since claims can be filed years after an incident occurs, that sounds like an insured person would need to pay premiums on a policy for a couple of years after going out of business or selling their company in order to protect themselves from claims that happened back when they were still in business. Also sounds like exposure if you switch insurance companies at some point. Sounds like one-man-shop sole proprietors should think twice too.

Anyone have any experience with this or have suggestions for PL/E&O?
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post #2 of 7 (permalink) Old 07-31-2013, 05:11 PM
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Check out Indiana insurance company their a subsidy of liberty mutual Ive had nothing but good luck with them
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post #3 of 7 (permalink) Old 08-01-2013, 06:30 AM Thread Starter
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I appreciate the suggestion but they don't operate in my state.
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post #4 of 7 (permalink) Old 08-01-2013, 08:06 AM
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Originally Posted by Homebrewer View Post
I'm shopping PL and E&O and I've run into something I find somewhat interesting.

Most of these policies are written on a "claims made and reported" basis. That generally means that any claims covered must arise from activities performed after the policy is in force, not before (which makes sense) but also that any claims REPORTED must be filed while the policy is in force. Since claims can be filed years after an incident occurs, that sounds like an insured person would need to pay premiums on a policy for a couple of years after going out of business or selling their company in order to protect themselves from claims that happened back when they were still in business. Also sounds like exposure if you switch insurance companies at some point. Sounds like one-man-shop sole proprietors should think twice too.

Anyone have any experience with this or have suggestions for PL/E&O?
A member posted awhile back discussing this very scenario. Chargebacks and claims were coming years after stopping work. If memory serves, the recommendation was to operate as an LLC or Inc. After leaving preservation, close that business down and open a new one. However, this may not be totally feasible if licenses or lines of credit are based on the original business.

Also, there is an insurance to get for this scenario. I believe it is an end of life or trailing policy (I probably screwed up the name).



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post #5 of 7 (permalink) Old 08-01-2013, 09:32 AM
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Most of the E&O policies offer "tail" coverage for up to 2 years after policy cancellation. Most chargeback "activity" happens within this 2 yr period....BUT not all. Read the new contracts- most of the 1's we were asked to sign said 5-7 yrs following termination.
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post #6 of 7 (permalink) Old 08-01-2013, 07:35 PM
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Most of the E&O policies offer "tail" coverage for up to 2 years after policy cancellation. Most chargeback "activity" happens within this 2 yr period....BUT not all. Read the new contracts- most of the 1's we were asked to sign said 5-7 yrs following termination.

Any chance you can send me the sections that say 5-7 years???
I'm in the process of putting something together on the charge back system and can use all the information I can get my hands on...
Thanks.

Aladay LLC
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Custom Glass&Wood
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post #7 of 7 (permalink) Old 08-01-2013, 11:18 PM
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We quit all Nationals 11-1-11. We only work direct or for brokers. If you want contracts from then (reason for quitting that b.s.) then i could dig around.
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