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

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If coverage is reduced, the claim will be handled based on the amount of coverage in force when the claim is filed, regardless of how much coverage was in force when the work was done. In some cases, when coverage is increased in the middle of the policy term, the carrier will treat claims that occurred prior to the date change as covered under the lower limit, and those events that occurred after the increase as covered with the higher limit. Again, this is to protect against increasing coverage when there is a potential or pending claim that has not yet been filed.

If I move E&O coverage limits up and down, could the carrier deny me future coverage or drop me?

Probably not. Although making multiple changes in the course of the same policy term is very unusual, it is generally not a cause for non-renewal. However, as a rule, it is best to maintain a consistent level of coverage during a single policy term, unless a contract specifically requires an increase. Changes in coverage limits are best handled at the policy renewal.

If I reduce my coverage or completely let it lapse, would it be harder to later increase or reinstate my coverage?

You should always be able to start a new policy, as long as the previous policy was not canceled for non-payment of premium. E&O insurance policies are written on a “claims-made” basis. That means that coverage must be in force when the event occurred, as well as when the