The new owners of a home had buyers' remorse when a flood damaged the home a month after they purchased it. They took action and sued the real estate agency. The agency received the lawsuit papers one month after the owners filed them with the court.

The insurance company denied coverage because the E&O policy was written on a claims-made basis and it expired two weeks before the real estate agency received the lawsuit. The real estate agency argued that coverage should apply because the lawsuit was filed when the policy was still in effect.

There was a very basic question that had to be answered. What date was the claim made?

Click here to review the appellate answer.

Claims-made coverage varies from occurrence coverage in a very important way and timing is everything. Insurance written on an occurrence basis provides coverage regardless of when the claim is made. Its only concern is the date the loss occurred. However, there are two dates to watch when coverage is on a claims-made basis.

Click here for an analysis of the differences between the Insurance Services Office (ISO) CGL occurrence and claims-made coverage forms.

Real estate agencies and brokers had a very difficult time during the Great Recession. Many of them ceased operations and quite a few agents and brokers left the industry. This is now changing. New agencies are opening and some who left the industry have returned. This may be an excellent time to solicit these as new accounts. However, not all real estate operations are the same.

Click here to review the Real Estate Agency General Information and Professional Questionnaire from the Producer's Commercial Lines Risk Evaluation System. It could help you quickly identify coverage concerns as you evaluate new clients.

Do your clients know that they have a professional exposure? Many may incorrectly assume that their homeowners or general liability policy provides coverage and is sufficient.

Click here for an emarketing article you can post to your website or add to your newsletter to alert your clients and inform them of this potential gap in coverage.