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  • How can the MarketScout Professional Liability division help agents?

    When you contact the MarketScout PL Division, we will work with you to address your insureds or prospective clients professional liability exposure. We will provide you with specific applications needed in order to quote. Once completed applications are received we will review them with you and then identify the proper markets to send the submission to. Once quotes received we will review to ensure comprehensive terms and options are included and then provide to you to present to your client. Over the policy term, we are here to advocate for you and your client with the markets to ensure exposures are continually updated and addressed.
  • What is the difference between Claims Made and Occurrence Professional Liability Policies?

    The International Risk Management Institute (IRMI) cites occurrence based as a policy covering claims that arise out of damage or injury that took place during the policy period, regardless of when claims are made. These types of policies are generally more expensive, but beneficial to consumers, companies, and professionals that have from long-term exposure. This is different than claims made policies which cover claims, first made, reported or filed, during the year the policy is in force. Claims-made policies have a retroactive date which is normally the date the first policy incepted. The date will carry forward with each consecutive renewal of the policy. Most professional liability insurance contracts are now claims-made policies MarketScout can walk you through which type of form is best for your client.
  • What is a Retroactive date?

    Most claims-made insurance contracts include a retroactive date. Your policy’s retroactive date is the date on which your professional liability coverage begins, meaning you are covered for incidents that to a third-party that occur on or after this date as long as the claims related to these events are filed while your policy is in force. Typically, your policy’s retroactive date is the date on which your professional liability contract is written and will not change as long as you continually renew your policy.
  • What is cyber liability insurance?

    There are all kinds of terms to describe the same exposure including Cyber Liability, Privacy Liability, Security & Privacy liability, Data Breach, Network Security, and Cyber Security Insurance to name a few. All of these names focus on your exposure to a data breach. A data breach can occur when personally identifiable information is compromised by hackers, a faulty transaction, malfunctioning technology, simple human error and even lost or improperly disposed data. The effect of a data breach on your small business could be devastating. You will have to pay to notify the affected individuals as well as the potential expenses arising from credit monitoring, identity theft resolution, analysis into how the data breach occurred and any steps needed to avoid another occurrence. These costs can be heavy and time consuming to identify. Security and Privacy Liability Insurance, also known as Cyber liability protects businesses in the event of a costly data breach.
  • What are the Costs Associated With Data Breach Exposure?

    • Claims for failure to protect information, expense of legally required notifications and credit monitoring to those whose information is exposed, forensic expense to find out and resolve what happened, public relations expense to maintain business reputation, regulatory and payment card industry fines and hacker extortion demands. • Small business owners have gone out of business due to identity thieves impersonating their business and personal name leading to loan defaults, inability to access credit and loss of business reputation.
  • Why do you need cyber liability?

    You will be hacked, it is not a matter of if, but when. Data breaches occur every day. While hacking incidents are the most recognizable and expensive cause of data loss, they are not the most common. It’s a startling fact - simple human error accounts for three out of four incidents. • 40% of the data breach cases are from people making mistakes, such as losing laptops and flash drives. • 36% are system glitches, such as software updates, which inadvertently expose sensitive private files. • 24% are malicious and criminal attacks. No matter the sophistication of the security system, there is little that can be done to eliminate the risk of human error. A common, accidental breach is a real business risk worth considering today. Also, Federal government regulations such as HIPAA, HITECH, and Gramm-Leach as well as forty-seven individual states have all created legislation protecting personal information of individuals. These laws outline a business' responsibilities after a breach, regulatory requirements not to mention the possibility of lawsuits. • The average cost per record to a business from a data breach is $194. • Businesses that accept credit cards or debit cards may be subject to fines and penalties for violations of the Payment Card Industries Data Security Standards (PCI DSS). • Claims arising from activity on your website are likely not covered under your General Liability if it concerns intellectual property or activity in a chat room or bulletin board, including social media. • The Federal Trade Commission estimates that the average time spent resolving a single identity theft is 400 hours. A business owner or partner or board member cannot properly manage their business while resolving an identity theft. • If the personal credit of a business owner is ruined from an identity theft, that owner may lose the ability to access loans essential to the operation of that business.
  • What Is Miscellaneous Errors and Omissions?

    Miscellaneous Errors and Omissions (E&O) covers the errors made while providing professional services. These errors can arise from negligence, faulty materials, and simply disagreements over the end result. A Miscellaneous E&O policy is tailored to professionals that have different than normal risks. A typical E&O policy is designed for lawyers, architects, accountants, etc. But a Miscellaneous policy is used to cover professions such as advertising agencies, appraisers, photographers, teachers, and many more. Typical E&O policies can sometimes exclude the types of risks for these other professions, but with a Miscellaneous policy, almost any other line of work can be covered.
  • Why Have Errors & Omissions?

    An E&O policy can pay for damages arising from an error or negligence. These could range from defense costs to punitive awards in court. Some insurers even have lawyers in-house to cover the insured. Where a standard E&O policy usually has a narrow definition of a "negligent act", a Miscellaneous policy broadens this definition to help cover the range of professions in its scope. Many small businesses need this kind of coverage to protect them. Many businesses do not have enough money to pay for a settlement or to pay for a lawyer in the case of a claim. Settlement costs could be anywhere from $10,000 or more. To fight a claim or even prove non-negligence, a lawyer has the potential to cost even more. An E&O policy will be able to take this burden from the insured for a much lower cost.
  • Occurrence vs. Claims-made Coverage

    There are two types of coverages available in professional liability insurance: Claims-made and Occurrence. Your clear understanding of both types of coverage is essential to making a fully informed decision on which type of coverage to buy. Some carriers offer only Claims-made. Others offer both, but may limit access to Occurrence coverage to a few specialties. There are several important differences between Claims-made and Occurrence coverage. Key among them are: a. Timing of claim filings required to trigger coverage, and b. How the limits work. Occurrence Coverage Timing: An Occurrence policy protects you from any covered incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been canceled – so long as the incident occurred during the period in which coverage was in force. In effect, an Occurrence policy offers permanent coverage for incidents that occur during the policy period. Limits: Occurrence limits “restore” each year so that claims paid for incidents arising from one policy year do not deplete limits available to cover claims from other years. Each year an Occurrence policy is in force represents a separate set of limits. Ten years of coverage under a $1M/$3M Occurrence policy could provide the insured protection for up to $30MM in claims (ten year combined annual aggregate limit). Claims-made Coverage Timing: Claims-made policies provide coverage for claims only when BOTH the alleged incident AND the resulting claim happen during the period the policy is in force. Claims made policies provide coverage so long as the insured continues to pay premiums for the initial policy and any subsequent renewals. Each succeeding year the policy is continuously renewed, the “coverage period” is extended. Once premiums stop the coverage stops. Claims made to the insurance company after the coverage period ends will not be covered, even if the alleged incident occurred while the policy was in force. A Claims-made policy will cover claims after the coverage period ONLY if the insured purchases extended reporting period or “tail” coverage. Limits: Claims-made limits DO NOT “restore” each year the way Occurrence Coverage limits do. The policy limits in place when the policy is purchased remain the single set of limits available to protect the insured from all claims that could arise from care provided during the years the policy is continuously in force. The insured does not have a separate set of limits for each year the policy is in force. Step Factor: Because both the incident and the claim have to be filed during the coverage period, the Claims-made insurer has little risk of loss the FIRST year a new policy is in force. That is why the first year premium for Claims-made coverage is lower. Each year the policy continuously renews, the coverage period expands, and the insurance company’s exposure to loss increases. For the first four years a Claims-made policy is in force, the premiums increase incrementally to reflect this increased risk. This process is known as the “Claims-made step factor.” Usually by the fifth year of Claims-made coverage, the risk of loss levels off and the “step factor” reaches a “mature” Claims-made rate. “Mature” Claims-made rates are typically very close to normal rates for Occurrence Coverage. Summary Claims-made coverage has replaced Occurrence as the most common type of policy offered by professional liability insurance companies. A number of factors are behind this evolution, including the fact that reduced carrier liability under Claims-made can mean slightly lower premiums for insureds. Occurrence coverage, or “permanent” coverage, is increasingly difficult to find. The important thing to understand is why the Claims-made coverage costs less. Don’t ever assume coverage under a Claims-made or Occurrence policy are the same, even if the limits are identical. If you are considering a move from Occurrence to Claims-made coverage, be sure to seek professional legal advice to revise your partnership agreements, employment agreements, buy/sell agreements and other corporate contracts to specify who will be responsible for buying tail coverage. Finally, be sure to appreciate the commitment you are making to stick with a single carrier when considering a switch to Claims-made coverage. In order to keep coverage in force and avoid having to buy “tail” coverage you must renew with the same carrier year after year. If you ever have to leave, whether you choose to, or if the carrier non-renews you because of a claim, you will have to buy “tail” coverage and seek another carrier.

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