Retroactive Date Issue - Freaking Out

[InsRep]

Hello,

Long time lurker and this is my first post. I'm stuck in a pretty bad situation and was looking for advice. I understand that I am asking for advice on a online forum and that this might not "professional" advice, but just one person to another.


Here is the story: I started a P&C agency in 2009 and built a book of business of over $3million since then. The book is 90% auto and home. Every year I have renewed my E&O insurance on time, never had a lapse and never had a claim. In 2012 I had an agent, that I used to work for, find me E&O insurance through one of his MGA's. I figured he had everything taken care of when I cut him a check. Long story short, the E&O insurance did not have a retroactive date back to 2009, it was only as of inception of the policy in 2012. I was never mailed a policy and only given a quote and policy number by him when it was issued. I figured since this is an "old friend", everything is fine and didn't worry about it. When he offered me a renewal this year, the quote was more then double and I decided to look for my own E&O. This is when I found out that they never retro dated the policy they did. Now I can not find anyone willing to retro any new policy further back then 2012.

My question is, how screwed am I?

Should I just look into selling the agency?

I don't know of any claims in the works and we are really good about documenting points of contact and document retention. Im just freaking out, I have my first kid on the way and I just don't know what to do.

Does anyone know of a work around? Again, have never had a lapse or a claim.

 

[abcsales]

I"m sorry I can't help, don't want to offer bad advice. Maybe call the carrier to ask them?
I doubt its something you will need to sell your book of business

 

[strvinmarv]

I don't think it's anything that you need to sell your book over, I would explain to your new carrier what happened and ask if they can make an exception. You might also think about running it by the big I or PIA's e&o team as they have a lot of swing with carriers. If I might ask, wanna give me a hint as to how you got half a million plus in new business average over four years thats 90% pl? Thats some good work my friend!

 

[djs]

Not legal advice......
that out of the way.....
don't lose any sleep over it. If you could fix it, then sure, but you can't. Move on.

Fortunately, you are a year out of the problem anyway. Keep records that you had continuous coverage because it may come up in the future, but beyond that, move on.

Dan

 

[nbarnes]

I have seen this happen before. I would ask any new carrier to honor the retro back with proof of continuous coverage (loss runs and dec. pages) back to 2009.

Or see if you can get full prior acts. It might be best to find a wholesaler.

 

[oldinsuranceguy]

No need to sell your agency. Just find a new E&O agent.

Once you lose your retroactive date, it's pretty much gone for good unless you're willing to buy prior acts coverage at a big premium.

If you don't think that you might have a claim coming, I would not lose any sleep over this.

Just make sure that you review your retroactive date on your binder or policy every time you renew it.

 

[technology11]

When he offered me a renewal this year, the quote was more then double and I decided to look for my own E&O. This is when I found out that they never retro dated the policy they did. Now I can not find anyone willing to retro any new policy further back then 2012.

 

[nbarnes]

Do you have all of your declaration pages from previous policy years? Are your loss runs clean? Did you just decide to renew with him?

I hate to say this, but it sounds like a pretty big E&O exposure for this agent.