Service

Professional liability (E&O) review for service firms and tech companies.

Retroactive date and continuity, the definition of "claim," consent-to-settle wording, defense treatment, and the contractual liability carveouts that decide whether your customer indemnity actually carries through to the carrier.

What we review

Form, retro, and contract reality.

Retroactive date and continuity

The retro date on the current policy, prior policy retro dates, and whether continuity has been preserved through every carrier change. Where it has been lost, the implications for current open engagements.

Definition of claim and wrongful act

Whether regulatory proceedings, written demands for non-monetary relief, and pre-claim circumstances count. The reporting trigger that decides when defense costs start.

Prior knowledge exclusion

The exclusion that bars coverage for claims arising from circumstances the insured knew about before the policy inception. The application warranty that activates it. We document the position before it becomes a denial letter.

Consent to settle and hammer

Whether the carrier needs the insured's consent to settle, whether the form has a soft or full hammer clause, and how the split works on disagreement.

Defense inside vs outside

Defense erodes the limit on most mid-market forms. Where the realistic defense burn is large, we evaluate defense-outside-limits options and the premium trade.

Contractual liability carveouts

Customer master service agreements typically require the firm to indemnify the customer. Many E&O forms exclude liability assumed under contract beyond what would have existed in the absence of the contract. The mismatch is structural and we document it.

When this matters

Triggers that bring service firms in.

• A renewal where the carrier proposes a retro date reset or a new exclusion.
• A customer's contract review demands E&O limits or wording you do not currently have.
• A circumstance has surfaced that may give rise to a claim and reporting timing matters.
• A new service line, M&A integration, or international expansion changes the exposure profile.
• You are evaluating bundled E&O / cyber against separate towers.

FAQ

Common questions about E&O.

What is a retroactive date and why does continuity matter?

On a claims-made E&O policy, the retroactive date is the earliest date a wrongful act can have occurred and still be covered. If the retro date is the inception of the current policy, anything that happened before is uncovered. Continuity, meaning the retro date is held back to the original date the firm first carried E&O, is what protects the long tail of professional services work that may not surface for years. Losing continuity at a renewal or carrier change is the single most common way E&O coverage quietly disappears.

How is 'claim' defined, and why does the definition matter?

The definition of claim drives when the duty to report attaches and when defense costs start eroding the limit. A narrow definition limited to a written demand for monetary damages misses regulatory inquiries, written demands for non-monetary relief, and circumstances that may give rise to a claim. A broader definition including written and oral demands, regulatory proceedings, and potential claims provides earlier triggers and earlier carrier engagement.

What is the consent-to-settle clause, and what is a hammer clause?

The consent-to-settle clause requires the carrier to obtain the insured's consent before settling a claim. Many forms add a hammer clause: if the insured refuses a settlement the carrier wants to make, the insured becomes responsible for any judgment above what the settlement would have been, plus defense costs from that point forward. Soft hammer clauses split the excess between the insured and the carrier; full hammers make the insured eat all of it. The form variation is significant.

Defense inside or outside the limits?

On a defense-inside-limits policy, every dollar spent on defense reduces the limit available for indemnity. On a defense-outside-limits policy, defense is paid in addition to the limit. For service firms with longer-tail claims and material defense costs, defense outside is materially more valuable, but it costs more in premium and is not always available. We model the realistic defense burn against the indemnity limit before recommending a structure.

Tech E&O or miscellaneous E&O?

Technology E&O is purpose-built for software, SaaS, and IT services, with grants for failure to perform, intellectual property infringement (typically excluding patent), and integration with cyber liability. Miscellaneous professional liability covers a broader set of professions on a more generic form. For a tech company, the tech E&O form usually responds better to actual claim patterns. For a hybrid services-and-tech firm, the question is which exposures dominate and where the carve-outs land.

Should I bundle E&O and cyber, or buy them separately?

Bundling, where the same carrier writes both lines on integrated wording, eliminates the gap that arises when one carrier disclaims based on the other's coverage. The trade is that bundling concentrates capacity at one carrier and may underprice one line at the cost of the other. Separating gives more capacity flexibility and clearer carrier accountability, at the cost of needing to confirm that the wordings dovetail. Most mid-market firms benefit from bundled wording up to a point, then start separating capacity above it.