Call Us 866.940.1101 ☰ ˟
866.940.1101
Logo
  • Home
  • About Us
    • About Us
    • Employee Directory
    • Partners Page
    • Event Calendar
    • Refer a Friend
  • Get A Quote
  • Products
    • Lawyers Malpractice Insurance
    • Professional Liability Coverage For Attorneys
    • Accountants Professional Liability
    • Dentist Malpractice Insurance
    • Business Owners Policy
    • Cyber Liability Insurance
    • Workers Compensation Insurance
    • Title Agents E&O Insurance
    • Paralegal Malpractice Insurance
  • Testimonials
  • Common Terms
    • Common Terms
    • Frequently Asked Questions
  • Blog
  • Contact
  • Areas We Serve
    • Grand Rapids, MI
    • Detroit, MI
    • Lansing, MI
    • Kalamazoo, MI
Home > Blog > Malpractice Insurance—Coverage Rescinded? What does that mean?
THURSDAY, DECEMBER 21, 2017

Malpractice Insurance—Coverage Rescinded? What does that mean?

Malpractice Insurance Policy

Rescission of insurance coverage normally results from a material misrepresentation on the application for coverage.  But what does this actually mean.  There are a number of ways where issues come up that cause the malpractice insurer to want to get off of an exposure.  Rescission is the most extreme tool that an insurer has available to get off of a risk.  Here are the most likely tools that an insurer has to get off of an exposure:

1.       Cancel coverage at inception--Many policies allow the insurer to revoke or cancel coverage during the 1st 30 to 60 days at the inception of coverage.  Normally this is for a material issue not known at the effective date of coverage.  Sometimes a conditional binder is issued at inception subject to conditions being met.  If conditions not met, coverage is cancelled.

2.       Midterm Cancellation—A material change to the risk generally is a reason that an insurer is allowed to cancel midterm.  Without a material change coverage must continue until expiration.

3.       Non-Renewal—Prior to the renewal cycle an insurance carrier with giving the proper state required notice to the insured, informs the insured in writing that the insurer will not be renewing coverage.  The reasons for this can range from changes in the exposure, insurer withdrawing from the market, underwriting reasons, claims experience, or a variety of other reasons.

4.       The 30-Day (60-Day) extension—When the dates to give proper notice for the non-renewal at expiration date are missed, the 30-Day extension provides the need notice for the non-renewal.

5.       Rescission—Generally a rescission results from a material misrepresentation by the insured, i.e. not telling the insurer on the application about claims activity that has occurred is a common example.  Often this issue comes up when a claim is reported and discovery by the claims department finds non-disclosed material issues that should have been known to the insurer at the time coverage was originally underwritten or renewed.  Often the insurer goes to court getting a declaratory judgement that allows the insurer to remove coverage back to a certain date.  This can result in the insured losing many years of coverage.

With claims-made coverage a rescission is the worst-of-all-worlds.  If a claim is involved claim coverage is declined.  Not only is current coverage lost, but past acts coverage is gone.  There is no good way to get past acts coverage back after a rescission.  It is as if the insured never had malpractice insurance except for the insurance history issues and likely wasted thousands of dollars of premiums through the years.

Posted 4:55 PM

Tags: legal malpractice, attorney malpractice, malpractice insurance, rescission, non-renewal, carrier cancellations
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2013
  • 2011

  • lawyers professional liability insurance(429)
  • attorney malpractice insurance(404)
  • attorney malpractice(337)
  • legal malpractice(225)
  • legal liability(134)
  • cyber insurance(107)
  • data breach(93)
  • ethics(87)
  • erp(58)
  • malpractice insurance(56)
  • claims(39)
  • title agency e&o(36)
  • accountant e&o(34)
  • extended reporting period endorsement(30)
  • tail(29)
  • disciplinary coverage(27)
  • phishing(25)
  • legal malpractice insurance(23)
  • prior acts(22)
  • claims made coverage(21)
  • extended reporting period(21)
  • cyber security(20)
  • cyber liability(18)
  • accountant errors & omissions(18)
  • claims reporting(18)
  • crime insurance(16)
  • ransomware(16)
  • claim prevention(16)
  • attorney protective cle(14)
  • the hartford weekly newsletter(14)
  • attorney protective cle webinar(14)
  • 2022 mcgowan pro cpe webinar for accountants(13)
  • professional liability insurance(13)
  • attpro tip of the month(13)
  • business owners insurance(12)
  • mcgowan webinar series for cpas 2021(12)
  • retirement tail(12)
  • legal liability insurance(11)
  • bop(11)
  • fee suits(10)
  • full prior acts(10)
  • cyber crime(10)
  • accountant errors & omissions insurance(10)
  • prior acts date(9)
  • insurance(9)
  • coverage(9)
  • step rating(9)
  • non-practicing erp(9)
  • cyber liability insurance(9)
  • title agent errors & omissions(9)

View Mobile Version
Logo
Quick Links
Home Our Products Customer Service Payment Options Common Terms
About Us Refer A Friend Our Carriers Blog Contact Us
Location
2430 Camelot Ct SE
Grand Rapids, MI 49546

Local: 616.940.1101
Toll Free: 866.940.1101
Email: info@L2ins.com
Facebook Twitter Social LinkedIn
© Copyright. All rights reserved.
Powered by Insurance Website Builder