A legal reminder: E&O insurance is (usually) required

Most insurance carriers require an in-force E&O insurance policy as part of obtaining and/or maintaining an active appointment. More importantly, E&O policies are typically claims made and reported. What this means, is that once your policy has been cancelled, no coverage exists under the policy for anything you’ve sold or serviced unless you replace your cancelled E&O policy with a new E&O policy without a gap in coverage. Even a one day gap in coverage can leave you financially exposed should a claim arise from an error or omission created prior to or during the coverage lapse. If you're unsure if you might be creating a gap in coverage, call a NAPA E&O expert at (800) 593-7657 and they will assist you.

Some policies allow for an extended reporting period (ERP), which is an extension of the time period during which you, the insured, must report a claim. For example, if you are retiring from the business, you will want to see if your policy has an automatic ERP and/or the ability to purchase one so that you may continue to have coverage in case you are named in a lawsuit for anything you have sold in the past. If you are participating in a sponsored program that requires coverage to maintain your active appointment status, we are required to notify the group administrator of any cancellation.

Circumstances when you might consider cancelling your E&O policy:

1. Your employer or agency is providing coverage. That’s great news and less expense for you! Just make sure they pick up coverage for anything you’ve sold in the past and/or if you are doing business outside that agency. In most cases, the agency’s E&O will only cover you while you are selling or servicing products through the agency. Anything prior to or outside of that relationship is typically not covered.
2. You are retiring from the business. You’ve had a long and successful career and are no longer working in the industry or you are starting down a different career path. Here are some things to consider. First, retiring means you will no longer be selling insurance products or servicing clients. This usually means you don’t renew your insurance license and sell your book of business. Unfortunately, in today’s litigious world, even that does not prevent you from being named in a lawsuit or having a claim filed against you. Understand what your Extended Reporting Period is and consider buying an additional ERP or, if you are still licensed, maintaining your current E&O.
3. You are switching insurers. Of course we would be sad to see you go, but respect your decision. Take steps to ensure you are not creating a gap in coverage and leaving yourself exposed to claims. Also, make sure you are fully covered for all the products you are currently selling or have sold under your prior policy. If you have any questions, one of our representatives would be happy to assist you.

To cancel your E&O policy, please submit a policy cancellation request form:

E&O Policy Cancellation Request Form

Please Note:Cancellation requests must be received at least 2 business days prior to the first day of the month.