Not only is a professional liability claim a challenge for a professional, but the professional liability (E&O, D&O, EPL, Cyber) insurance renewal placement becomes significantly more challenging. The renewal underwriter may respond in a variety of ways, including:
- Increasing the renewal premium
- Severely restricting coverage going forward
- Non-renewing the coverage (or even cancelling mid-term)
Panic is not necessary, but some proactive work is necessary. There is always (almost always) coverage available for an account with one or more claims. Just because one underwriter takes aggressive action following a claim does not mean that all underwriters will view the account and the exposure in the same way.
The renewal pricing and terms will be dependent on underwriters’ perspectives on the forward exposure. The key question for underwriters is whether another claim will happen in the future. Why or why not?
So what to do? Work with your existing insurer to see what the possibilities are, and also pursue coverage from alternative insurers.
Information is critical to a new underwriter. Provide a thorough and professional submission, including a full application along with supplementary information. Supplementary information may include loss runs, a claim supplement, a description of what triggered the claim, key resumes and sample contracts. The submission information should answer the key question noted above: is a claim likely to occur in the future.
As the process moves forward there will be additional questions. Provide clear and detailed information as requested, be proactive in addressing potential exposures and be sensitive to underwriters concerns. This approach will positively impact the renewal terms.
Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary services to our retail insurance agent clients in the placement of professional liability insurance (E&O, D&O, EPL, Cyber). We excel at hard to place accounts.