Agency Sale Transition E & O

northcountry

New Member
1
I am thinking about the sale of my agency to an agency that also represents my main carrier. It is my understaning that the transfer of the business accounts from my agency code to the buyers code will only occure on the renewal date of the business. My question is during the transition, during which time I will still service the accounts under my code do I continue with my own E & O or do I purchase a tail for my coverage as of the date of the sale?
 
I am thinking about the sale of my agency to an agency that also represents my main carrier. It is my understaning that the transfer of the business accounts from my agency code to the buyers code will only occure on the renewal date of the business. My question is during the transition, during which time I will still service the accounts under my code do I continue with my own E & O or do I purchase a tail for my coverage as of the date of the sale?

Are you staying in the business or leaving the industry altogether? If staying, I would continue your existing policy and renew as normal (pay attention to retro date). If leaving, upon expiration I would pick up tail coverage for at least two years if not more.

FWIW - sales, acquisitions and mergers are a significant concern for E&O carriers due to the increased exposure and incidence of claims. This is actually more of a concern for your buyer, but this does not mean you are off the hook.
 
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