Camico Mutual Insurance Co., the country's second largest provider of professional liability insurance coverage for CPAs, announced that it will provide limited coverage for policyholders who inadvertently fail to report a claim or potential claim in a timely manner.
Pending regulatory approval, the company will attach the new endorsement to its 2006 policy, providing for a $100,000 sub-limit, reduced by the policy deductible. The new endorsement is a feature not offered by any other insurer of CPAs. The benefit is activated when the policyholder has a known claim or potential claim but inadvertently fails to report the incident within the policy period and subsequent grace period, which is 30 days beyond the policy period.
For example, if a CPA policyholder delays reporting an incident because he believes he can resolve the situation himself, and a lawsuit occurs after the grace period expires, the CPA policyholder may still receive the benefit of the $100,000 sub-limit.
In addition to the new known claims endorsement, Camico is filing for another policy change to provide defense-only coverage for regulatory/disciplinary proceedings. This change will enable the company to provide up to $5,000 per year to cover the costs of responding to regulatory or disciplinary investigations. Fines or sanctions that might be imposed on the claimant are not covered.
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