That is correct.  E&O insurance is a "claims made" type of policy.  This means that if you don't have coverage "at the time a claim is made" there is no coverage, regardless of what you have paid for in the past.

When it comes to the point that you no longer need it, you can purchase tail coverage that will continue to insure the work you did for a 1 time premium, but it is my understanding that the maximum term for the tail coverage is 5 years.  I have been told that the cost is approximately 1 and a half times your annual rate.

Thus, it is very important that you maintain continuous coverage.  Any laps in your policies, and all of the years you have previously paid for are wasted... NEVER let your coverage laps!

There are a lot of issues associated with E&O insurance that are not common knowledge.  Things like this aren't explained when you purchase E&O insurance, but it is important to be aware of them.  Perhaps this would make an excellent topic for an article on Source of Title.

Regards,
Robert A. Franco
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