During challenging economic times such as these, your clients understandably will be under significant pressure to reduce operational costs, including insurance costs. Faced with such pressures, many of your clients may ask you to consider taking certain drastic steps regarding lines of insurance coverage that Socius regularly places for these clients, such as canceling policies mid-term, non-renewing policies, reducing coverage limits, or choosing lower-priced alternatives that provide inferior coverage. Other clients might decide to forgo altogether adding new lines or limits of coverage that you recommend.
Our overriding goal during challenging economic times is to help your clients keep in place the best insurance coverage possible. In fact, maintaining optimal levels of insurance that we place for you is
perhaps more vital than ever for protecting your clients’ financial viability during tough times, because
your clients face many continuing or increased risk exposures and therefore need to transfer their risks as economically and efficiently as possible through insurance. Examples:
All of the lines of insurance described above are “claims-made”, i.e., they require that all claims occurring during the policy period be reported to the carrier as soon as practicable after your clients become aware of the claim, but no later than either the end of the policy period or, in many cases, the end of a short post-expiration window of time. Further complicating the situation, these policies also give your clients the ability to report “potential claims” prior to the end of the policy period.
Navigating the claims-reporting process under claims-made polices can be complex and tricky even during normal economic times, since what constitutes a “claim” is often broadly defined, and some of your clients might therefore not always be aware that a “claim” has even occurred. However, the timely reporting of claims becomes even more critical when adverse economic circumstances compel your clients to make insurance decisions that result in terminating or altering coverage (e.g., canceling or non-renewing policies, reducing coverage limits or changing retentions, ceasing coverage when acquired, etc.), or that result in changing carriers.
As always, Socius stands ready to help you and your clients understand and comply with the claims-reporting requirements of claims-made policies, and to help your clients secure additional time in which to report claims through the purchase of extended-reporting-period or run-off coverage options, if available. Never hesitate to consult with your Socius representative regarding your clients’ claims or claims questions.