When It Comes to Claims-made Professional Liability Coverage, Make Sure You Keep It Continuously With No Gaps!
If you are an NASW member with professional liability insurance that you obtained as an NASW member,whether recently or years ago, this is critical information that affects you.
A lapse in coverage is a lapse in coverage. Don’t let it happen to you.
Claims-made Professional Liability insurance coverage has become the industry standard, popular because it offers high quality, portable protection at affordable costs, while keeping up with claims cost inflation. If you have had continuous coverage over the years with no lapses or gaps, you should check with your Professional Liability Insurance carrier to determine if the protection level you purchase today would apply should a lawsuit or complaint be brought against you now for a covered error or omission that occurred years ago when your policy limits may have been lower.
If you are like many professional social workers, whether just starting out or in practice for years, you focus more time and energy on taking care of your clients than you do on learning easy, affordable ways to protect yourself, your career and those who depend on you. If you already have Professional Liability Insurance, please take a few minutes now to learn more about how the policy works and how to avoid simple administrative missteps that could adversely affect coverage availability when you need it.
With Claims-made Professional Liability Insurance, even a short lapse or gap in coverage could leave you unprotected in the future. A lapse could jeopardize your past coverage for errors and omissions under the policy, as well as all the premiums you paid over the years. Unfortunately, some members have learned this the hard way, and found themselves without coverage or defense when they need it. Don’t let this happen to you.
Gaps and lapses in claims-made coverage are completely avoidable – just keep these important tips in mind.
If you plan to continue your current claims-made coverage:
- Always renew and pay your premiums on time, or ahead of time, to maintain continuous coverage with no lapses or gaps in coverage that could leave you without protection in the future for past errors or omissions.
- Follow up to confirm your renewal application and payment were received.
- Keep good documentation of your coverage renewals and payment history where you can find it.
If you plan to discontinue claims-made coverage:
- Do not let your policy lapse without contacting your insurance carrier to put an Extended Reporting Period, or “tail” coverage, in place first. Tail coverage or Extended Reporting Period is affordable, usually a one-time payment of your current annual premium. And it is free to NASW-Endorsed program policyholders who stop practicing due to permanent retirement or death, provided a notification form is completed and submitted to the program administrator.
- Keep good documentation forever – a copy of your policy, your continuous renewal history, and a confirmation of tail coverage or Extend Reporting Period – filed where you can find it should you need it in the future.
If you want to switch from one claims-made insurance coverage to another:
- Do not cancel your previous policy until you have received your new policy confirmation.
- Consider your options and costs for Prior Acts or “nose” coverage on your new policy, which provides coverage for prior errors and omissions, versus Extended Reporting Period or tail coverage on your old policy. You need one, but not both.
- Prior acts coverage is still available at no cost for eligible NASW members who enroll in the current NASW-Endorsed program, typically making tail coverage on an existing policy unnecessary. Make sure to obtain new policy effective confirmation before canceling your old policy.
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Published February 2014