Professional Liability Insurance: The Cost Of Expiration
When it comes to insurance of any kind, expiration can be costly if there is a problem. With professional liability insurance, or Errors & Omissions insurance, these can be even more costly in the event of a structure failure or death.
Insurance policies typically are purchased according to certain time periods. These time periods can be months, or years, depending on how your policy is set up. When that date is approaching, steps should be taken to ensure that there is no lapse in coverage. While there is some protection for projects already completed under an extended coverage policy, it will not cover any new projects that have been started.
Letting the liability insurance policy expire can carry some fairly heavy costs. One of the costs is with reactivating the policy again. Most insurance companies will charge a surcharge in order to activate the policy. In the event that the policy expired because of non-payment, there will be added late fees. If the policy is not renewed, or is late in being renewed, underwriters can choose to deny the policy. As business picks up, and things get busier, it is important to have a reminder about the policy bill dates, and expiration dates.
Another cost associated with an expired liability insurance policy is in any damages suffered through negligence or ignorance. With the policy, this is not a problem. However, without the policy behind the engineer, or architect, on a particular job, this can be devastating financially.
When it comes to professional liability insurance, expirations are a serious consideration. There are policies that do have some built in protection, but ultimately when the policy expires it can be very costly and lead to problems securing further insurance coverage. For busy engineers and architects it is important to maintain a current insurance policy, and renew well before the expiration date.