By Patrick Manning, Senior Account Executive
We recently wrote an account that had some challenging issues with retro dates. When dealing with claims made policies one of the biggest E&O considerations we face involves retro dates. If a carrier advances a retro date and it’s missed by the agent, there could be some potentially serious negative repercussions. That type of situation tends to be the most common but there is another issue when an insured goes from one agency to another and the new agent doesn’t think to try to carry the original retro date forward. The account we recently rescued from a retro date snafu dealt with a few of these things going wrong at the same time.
Originally the new business account was written with our agent a few years ago, and included Pollution and Professional Liability, but on a claims made basis, both with $2M/$2M limits. The date it was placed was 5/1/2015, so its retro date was 5/1/2015. At renewal, after a bit of a struggle, the agent ended up losing the account.
Fast forward to the renewal for 2017 on the same account. The insured has approached the same agent about retaking over their insurance program. Upon review of the new program the agent discovered an issue involving the retro date from the prior year. Not only had the limits been reduced to $1M/$2M, but the retro date had been advanced to 5/1/2016, essentially losing the coverage that had already been in place.
My agent did everything he could to try to get the original retro date in place, including having the original market that set the 5/1/2015 retro date quote it, but that market wouldn’t give the original retro date. The agent gave us the details on everything that had occurred and the goals they were looking to attain for the account this year. We confirmed with the agent that the account had remained loss free and that there was never a lapse in coverage. Beacon Hill worked to get the insured the retro date they originally had and for a premium in line with what they were currently paying.
We received the full submission the same day, which was only two days away from expiring. We submitted everything to our underwriter with a full written description, timeline, and as much policy and loss data as we could obtain. (We were still awaiting loss runs from the previous agent, which everything hinged on). The underwriter was given full approval to quote with the original 5/1/2015 retro date subject to clean loss runs.
The day of binding came and we received the bind request and shortly thereafter, the clean loss runs. Everything worked out and we were able to get the coverage back in place that the previous agent had overlooked. Additionally, the underwriter said that at renewal we will be able to convert the Contractors Pollution Liability from claims made to occurrence.
Understanding retro dates is crucial to making sure your clients have the coverage they need during the time they expect to be covered. Our longstanding partnerships with our trusted carriers provide the foundation to really analyze situations like the one above and to find successful solutions. If you ever find yourself in a similar situation, Beacon Hill Associates can assist you in correcting the errors of others and help strengthen your relationship with your insured.
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