What if I get a claim on my E&O insurance policy?

So one of your current or prior customers just sent you a demand for money or a lawsuit saying that you did something wrong and that they were financially harmed because of that. Now, don’t panic, this is why you have errors and omissions insurance.

The first thing you should do is locate a copy of your E&O policy. There is a section in your policy regarding what to do in case of a claim. You will need to notify your carrier in writing and give them some details about the claim.

Based on the allegations and amount of the claim, it is possible that you carrier will decide to non-renew your policy. This is a common practice when a carrier thinks that you are no longer a good risk.

In order to find coverage from another carrier, you will need to complete a new insurance application and disclose your claim history. You will also need you loss runs for the past five years. Loss runs are documents from insurance companies that show each claim you had in each policy year.

Some surplus lines carriers specialize in insuring agents or agencies with claims. You can however expect to see a significant increase in your E&O premium if a carrier agrees to quote you. You will usually be stuck with a higher priced policy until you remain claims-free for a period of five years.


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