> I recently just renewed my errors and omissions policy and was a little shocked to find out if you let the policy expire then the policy does not protect you even in past while the policy was active.
This is to protect the insurer against adverse selection. Errors and omissions policies are typically on a "claims-made" basis, which means they cover claims that were filed against you during the policy period, as opposed to incidents occurring during the policy period.
It is assumed that if you let your policy lapse and then buy a new policy, that you know that there is some incoming claim against you for which you need protection from.
This is to protect the insurer against adverse selection. Errors and omissions policies are typically on a "claims-made" basis, which means they cover claims that were filed against you during the policy period, as opposed to incidents occurring during the policy period.
It is assumed that if you let your policy lapse and then buy a new policy, that you know that there is some incoming claim against you for which you need protection from.