Malpractice Insurance Not pleased

[Bjorn]

Does anybody have any thoughts on this unfortuante situation.
A mistake was made on the 2004 taxes and found in March of 2006.

My malpractice carrier {The one with a large animal with antlers} has informed me that claims must be reported within 60 days of the end of the policy year. The vast majority of tax errors are not found until at least 18 months after the tax return was filed, so they can effectively deny virtually every claim that could ever be filed. What a bunch of not nice people.

This may be a good time to learn from me.

Who has a good malpractice policy? Does anybody have any thoughts on this matter? Maybe the agent has some liability.

The ironic thing is I already paid all the damages and way more to kiss this hurt.

Read your policy because when the chips are down mine was all about the antler and nothing about me. They just kept asking questions until they could find a way not to cover.

[Gretel]

Bjorn, are you sure it is 60 days after the calender year closes for which the return was filed? Could it be 60 days after the error was discovered?

Anyway, what you describe is one of the reasons why I only have mandatory insurances.

[taxmandan]

E & O policy

Well now you've done it, got us all running to the insurance files to read that policy we got from the company. My policy says notice to them cannot be more than 60 days after the policy expires. Since I renew each year, the insurance policy hasn't expired. Doesn't say anything about 'policy year'. My company doesn't have antlers though, so YMMV.

[jainen]

Bjorn

>>got us all running to the insurance files to read that policy<<

Bjorn, you need to join us.

[Jesse]

Well now you've done it, got us all running to the insurance files to read that policy we got from the company. My policy says notice to them cannot be more than 60 days after the policy expires. Since I renew each year, the insurance policy hasn't expired. Doesn't say anything about 'policy year'. My company doesn't have antlers though, so YMMV.

This is how my policy is written but expiration date is each year, so when I renew for 2007 my 2006 policy has expired. Then for 5% of my total policy I can elect coverage for retro years, so I have to re-insure 2006. I think that's how it works.

[OldJack]

so YMMV.

Dan, most of us here only read English. What language is YMMV?

[outwest]

your mileage may vary..

or YMMV for short.

[jainen]

claims-made

>>claims must be reported within 60 days of the end of the policy year<<

Bjorn, this sounds like you let your policy lapse. E&O insurance is claims-made, which means it only covers claims made during the policy year. That's very different from, say, your car insurance.

With your car, if you get in an accident while you are covered you can still file five years later when you come out of the coma. But with E&O, you have to be covered when the claim is made, not when the event happened.. If the claim was made in 2006 but you aren't covered this year, it doesn't matter even if you were covered when the problem occurred in 2004.

So read your policy to see exactly what you bought. But don't bother looking for a different agent. All professional liability insurance is claims-made.

[sea-tax]

Bjorn sorry to hear about your unfortunate incident.
Just curious if you would be willing to share a little with us about what the specific issue was? Some times listening to others can help us all learn something.

[Bjorn]

Policy never lapsed

The policy never lapsed. I was insured at the time of the error and have been continually insured with Hartford every day since nearly forever.

[jainen]

a missing piece or two.

Well, Bjorn, then your post doesn't make sense to me and maybe your misunderstanding of the policy caused you to misfile the claim or something. When you complained about "18 months after the tax return was filed" it sounded like you were worried about the date of occurance, not the date of claim. What exactly does your policy say, and when did the policy year that contained March 2006 end?

Usually whenever somebody gets a claim that could be handled by insurance they're on the phone to their agent the same day. That's also what the company wants so they have an opportunity to defend against it if appropriate, and it's undoubtedly all spelled out in the contract.

I totally believe you (so nobody get worked up about whether I doubt Bjorn's veracity) but the way you are telling the story to us and probably yourself there seems to be a missing piece or two.

[Bjorn]

Hartford was in error

Hartford called me to back say there is coverage. Now, of course they won't pay for my stomach acid and lost sleep over the little goof up on theri end. However, since I felt I had no coverage and had to pay all my own legal bills which can easily get into the thousdands of dollars I wrote a check to the client which far exceeded actual damages. The good news. The matter is closed and the client relationship survived. The bad news. You can be threatened for anything at any time, even with good records, proper insurance. Sometimes you may end up paying when you don't have to in order to keep good public relations in a small town.

[veritas]

Amen

to that brother.

Some policies will insure for legal costs in addition to claim.