E & O Insurance - Western Surety

[HaroldinGeorgia]

Does anyone have any experience with Western Surety? They are offering E&O which would also cover prior year returns. My present one will not cover prior years unless you purchase the new year.

Any comments appreciated.

[mwrightea]

I have a policy through them.  I have never had a claim.

[SaraEA]

Your present insurer won't cover prior years when you ALREADY PAID insurance premiums for those years?  What kind of insurance is that?

[Randall]

13 hours ago, SaraEA said:

Your present insurer won't cover prior years when you ALREADY PAID insurance premiums for those years?  What kind of insurance is that?

I'm not sure but isn't that standard practice?  The new insurer covers the past years.  Then when you retire, I think they offer some extension for a year or two (extra premium of course).

[HaroldinGeorgia]

Randall, that is my understanding also. I called this year to confirm it. I have a "Claims Made and Reported Policy" which I am told is standard in the industry for E&O insurance. I have had insurance with the same company (Affinity Insurance Services, which is a sub of CNA Surety) since 2010, and as long as I continue with them each year, I have coverage back to 2010. However, since this is a "claims Made and Reported  Policy" if I don't continue with them, then I lose that coverage. Claims have to be made while the insurance is in force.

After research I see that the one I inquired about, Western Surety Co, is also a sub of CNA Surety, so I would guess the policy would be the same, so maybe I don't gain anything by changing - in fact lose coverage.

[JimTaxes]

any time that I changed carriers they picked up the prior acts date but I had to have that on the application.

 

[FDNY]

I have Hiscox and they covered prior years, I think up to 20.  This amazed me, but I was assured by the agent it was true and it was in writing when I received the policy. 

[jklcpa]

As Randall said, it's fairly typical for a renewal policy with a continuing insurer to cover prior acts. When changing to a new insurer, the prior acts coverage is usually an add-on of optional coverage handled as a rider. 

I've renewed the same policy through AICPA/AON since going out on my own, and it covers prior acts all the way back through 1996.

[SaraEA]

Interesting how the insurance companies play this to their advantage.  We all know that IRS often waits 18 months to send notices. (If they wait longer they have to pay interest if the audit results in a refund.)  Our state waits the full three years, just letting those penalties and interest add up.  Also, when the IRS changes a return preparers often forget to amend the state; the state finds out a couple of years later and sends a notice, with lots of interest and penalties tacked on.  Our state DRS official actually pleaded with us at a liaison meeting to remember to amend the state return because a lot of people get hit with fees for being very late.  Looks like if you change insurers, you end up being uninsured for issues that haven't even come up yet but occurred when you had that insurance.  What a racket.

[HaroldinGeorgia]

Thank you all for your response and input. There is a wealth of knowledge on this board, as we all know.

I have never had to file a claim, but this is good to know.