Don’t Lose Malpractice Insurance Coverage Due to Lapsed/non-Pay Cancellation
Not renewing or allowing coverage cancellations for not making payments or non-sufficient funds results in coverage loss. Counting on an insurer backdating coverage or reinstating a non-pay NSF cancelled policy is difficult. Insurers increasingly refuse to put coverage back inforce.
Coverage gaps open firms up to uninsured claims. Whether it is Business Auto, Business Owners Coverage, Professional Liability Insurance or Workers Compensation letting your insurance coverage lapse can be costly.
With Business Auto, Business Owners and Workers Compensation occurrence policies letting the coverage lapse leaves permanent coverage gaps. Given Murphy’s Law this gap might exposure your assets to uninsured claims. Auto accidents, fires and worker injuries can happen at the worst possible time. Plus, your premiums might increase once you decide to get coverage inforce again. Insurers do not like insureds that let their coverage lapse or bounce payments.
Insurers normally report workers compensation coverage lapses directly to state workers compensation bureaus. The state work comp bureau may fine businesses for not having workers compensation in place.
Letting claims-made insurance lapse exposes the firm’s past acts. With lapsed claims-made coverage and no extended reporting period endorsement in place coverage ceases for past acts when the policy terminates. Permanent loss of past acts coverage may occur. While it is sometimes possible to restore prior acts coverage it is expensive. Lurking past act liability claims that you know nothing can pop up at any time. Without inforce continuous claims-made coverage there is no insurer to report the claim to or to provide a defense. Uninsured claims exposes your personal assets to defense and settlement costs. The average liability claim defense costs are over $60,000 even with no indemnity payment.
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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
