It is important to know when to report a claim to your insurance company but commonly the answer is as soon as your firm knows. Here are some guidelines to follow.
When to Report:
- Immediately upon receiving a claim:
- A lawsuit
- Written demand for money or services
- Formal complaint to a licensing board or regulatory body
- When you become aware of a potential claim (“Notice of Circumstance”):
- You learn of a mistake or error that could result in a claim
- A client threatens to sue or expresses dissatisfaction
- A known issue may lead to financial loss or legal exposure
Why Prompt Reporting Matters:
- Policy requirement: Most professional liability policies are claims-made or claims-made and reported, meaning coverage is only available if the claim is both made and reported during the policy period.
- Coverage could be denied if you delay reporting.
Best Practice:
- Check your policy for specific reporting requirements and deadlines
- Notify your insurer in writing as soon as a claim or potential issue arises
- Keep detailed records of what happened and how you responded
If you’re not sure whether a situation qualifies, it’s better to report it anyway or consult your insurer or broker—they can help determine the best course of action without risking a denial of coverage.
Most professional liability policies have pre-claims assistance. If you are not sure if it is a claim or not, report the incident to your insurance agent or the insurance company. The insurance company will then determine if it is a claim or a pre-claim. With pre-claims assistance the insurance company will also assist to hopefully avoid a claim.
HERE is an article that goes into detail on professional liability claims reporting.
If your firm has any questions about reporting a professional liability claim please call, or email, your Professional Underwriter agent for assistance.