Errors and Omissions (E&O) is an important type of policy in insurance programs for agencies, protecting them from claims of acts involving negligence and poor work. When acquiring this type of policy, consider including E&O insurance tail coverage, which adds an extra layer of security. The way it works is by giving an amount of time after the insurance policy expires or is canceled where claims can be covered, as long as the actions being filed against happened during the time when the policy was active.
Why Include Tail Coverage?
There are various cases where E&O insurance tail coverage is not only a positive policy to include but a vital part of the program. If you are trying to sell your agency, many may require a minimum tail coverage period, so it’s a good idea to include at least three years of tail coverage in your insurance policy. If you want to buy an agency, then ask for a minimum of three years before purchasing. This way, the buyer will not have to be forced to take on the seller’s wrongdoings.
If you are looking to close your agency, retire, or even just slow down, E&O tail coverage insurance will ensure that you are able to handle claims that are filed afterward. Then you can close down in peace without the fear that delayed filings could give you problems and have to be paid out of pocket.