Can I Change My Business Insurance or Professional Liability Insurance Limits as my Needs Change?

Can I Change My Business Insurance or Professional Liability Insurance Limits as my Needs Change?

Many small business owners purchase higher limits on their errors & omissions insurance because their client contracts require it. But what about when those contracts expire? Is it a good idea to save a little money by reducing your professional liability policy limits? Or, what if you already have coverage, but a new contract requires a higher policy limit? Can you increase coverage in the middle of the annual policy term?

We answer these and other frequently asked errors & omissions questions below.

Is coverage fixed for an annual period, or can I modify my policy limits during the year?

Policy limits can often be adjusted during the year, though some insurance companies have restrictions regarding this. As a rule, they are willing to increase the limits due to contract requirements, but may request a copy of the contract. Their concern is that your request to increase your coverage amount may be related to an incident that has already occurred, and they do not want to increase the amount of coverage when there is already a potential or pending claim.

If I want to increase and decrease E&O insurance coverage based on what my contracts say I need, is the coverage limit based on when I delivered the project, or when a suit is brought? If I decrease coverage after the contract ends and am later sued, am I covered based on the level I had at the time I did the work, or on the level of coverage at the time I’m