Accountant Selling Practice Wants to Protect Prior Acts
All Accountant E&O policies sold in the US are written on a claims-made basis. In essence, once your Travelers Insurance Policy is canceled so is your coverage for past acts. The Travelers policy does provide for purchasing an Extended Reporting Period Endorsement (ERP) to protect your past acts. All insurers have time limits set to purchasing an ERP. Please note that Travelers allows 60 days to request and pay for an ERP from the termination date of coverage.
The cost of an ERP is on Item 8 of your declarations page per the attached:
ITEM 8 OPTIONAL EXTENDED REPORTING PERIODS:
Additional Premium Percentage: Additional Mo
125% 12
185% 24
200% 36
250% 60
300% Unlimited
Your annual premium is $500. So for example the cost of an unlimited ERP is 3 times your annual premium or $1500.00. The total cost of the ERP must be paid in full prior to the end of the 60 days after termination. It cannot be financed or put on a direct bill program. ERPs must be purchased from the insurer that has the coverage inforce prior to termination.
As it is your intent to become an independent contractor for the buyer. Once at independent contractor the buyer will be responsible for providing insurance coverage for you.
Let me know if you have any further questions. Good Luck with your future endeavors.
Click here for an Accountant E&O Quote
Contact Me Today
Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
