The upsides of early reporting.

• Position: Tip oft the Month: CAMICO Insurance

A common problem in professional liability insurance claims is the late reporting of potential claims to the insurance company. Most policies require a potential claim to be reported in the same policy year that the policyholder becomes aware of it. But occasionally a loss or dispute will be handled internally without reporting it, sometimes because of concerns about premiums increasing as a result of reporting.

The late tax payment penalty is just one example. If the CPA handles a penalty abatement request internally without reporting it, and the IRS denies the request, the client is still faced with a penalty. If the policy period has lapsed in the meantime, a claim for the penalty damages may be denied, or the policy limits restricted.

CAMICO provides strong...