Mold InsuranceMold Insurance FAQs
(1) What's the difference between Professional Liability, Errors & Omissions.
Professional Liability (PL) and Errors & Omissions (E&O) Insurance are terms used interchangeably to describe insurance covering any alleged mistakes, acts, errors or omissions on the part of the policyholder. The term Professional Liability Insurance is frequently used for licensed professionals.
(2) What's a "claims made" policy? How is that different from most liability policies?
Most PL / E&O policies are written on a "claims made" basis. That means that your current insurance carrier will protect you when the claim is made, i.e., when the claim is presented for the first time, even if the alleged mistake, act, error or omission happened in the past. With most "occurrence" policies, the carrier that was insuring you when the incident occurred will be the carrier responsible for defending you now, even if you're sued after the policy expired.
(3) What's a "retroactive date?"
The retroactive or "retro" date shown on your currentpolicy is the date from which yourcurrentinsurance carrier will cover you when a claim is first made / first presented. Let's say you had ABC Insurance Company from 12/1/1990 until 12/1/2005. You're now insured by XYZ Insurance Company. If the alleged mistake, act, error or omission happened on 10/1/1999, your current insurance carrier will cover you as long as the "retro" date shown on your current policy goes back to at least 10/1/1999. Whenever possible, your "retro" date should go back to the date you first took out a PL / E&O
(4) What happens if I cancel my PL / E&O Policy?
PL / E&O policies "self-destruct" once you or the carrier cancel your policy. That means if a claim is presented 6 months after your policy was dropped, you'll have no protection. If you cancel your policy, you would have the option to purchase tail coverage or an extended reporting period.
5) Is there a deductible? How does it work?
Most PL / E&O policies have a deductible. In the mold insurance world, most are $5000 or $10,000 per claim. Some offer as low as $2500 per claim. The deductible usually applies to your defense costs (attorney's fees, expert witnesses, etc.) as well as to actual payouts by your insurance carrier to the parties suing you. You are responsible for paying this deductible.