So, we don't ever want anyone to leave us, but, occasionally educators desire to cancel the coverage for various reasons. I think it might be valuable to discuss what happens.
First, the basics- you can easily cancel your coverage simply by logging on to your account. It takes just a minute. Simply choose the "manage my account " function and cancelling will be one of your options. We try very hard to get any refund owed to you within 30 days. Our system has recently made it a bit easier for us to manage the process, so we are getting quicker. Again,if we owe you money, we want to get it back to you right away.
With all of that taken care of, I really want to focus on the insurance ramifications of cancelling.
As I have mentioned in many previous posts and on the site, coverage purchased through us (and almost all professional liability insurance ,no matter where purchased) is written using a claims made reporting provision. This type of policy requires two different triggers for the insurance company to respond to a covered claim.
- The occurrence (alleged wrongful act) has to happen during the policy period
- The claim itself must be made during the policy period.
The information above is a probably the most fundamentally misunderstood and important aspect of professional liability insurance.
So, Lets take a real world situation. Educator 1 purchases insurance on January 1 because they are required to for a contract. The contract ends on March 31 and they cancel the insurance under the reasoning that it is no longer required by their contract. On June 30th they receive a letter from an attorney of the company they contracted with announcing that the company is being sued, and that they believe that Educator 1 will be party to the suit.
In this situation there would be no insurance coverage for Educator 1. The allegation here presumably is about a wrongful act that happened while Educator 1 was insured, but the reporting of the claim happened after the policy was canceled,
I want to emphasize the above point because I have received a few calls from folks who apparently want to cancel and restart coverage several times during the year. Insurance companies are happy to allow you to do this, but instead of gaming the system, you are really just degrading your coverage by eliminating its continuity.
So what are your options:
1) Keeping your coverage in place for some period of time after you have stopped working to allow times for claims to arise. This is often i the least expensive and most practical option.
2) Rely on the automatic 60 day extended reporting period in the policy. This allows 60 days for a claim to be reported after coverage is canceled. This is frankly not a great deal of time for a claim to come up, but it is better than nothing.
3) We offer a one year "extended reporting period" that allows for you to purchase a one year period for claims to arise from past work, after your coverage is no longer in effect. If you contact us, we will provide a quote for the option.
As I said before, we don't want to see anyone leave, but it does happen from time to time. It is important to remember that if you just cancel your coverage, it disappears.