Been shopping E&O policies and seeing some concerning exclusions. One carrier wants to exclude coverage for 'rate design or tariff development' which would eliminate most of what we do for Rocky Mountain Power. Another excludes 'errors in mathematical calculations' - isn't that exactly what we need coverage for? What language should I be watching out for?
Policy Language Red Flags
Connie those are definitely red flags. The 'mathematical calculation' exclusion would gut your coverage for most utility audit work. I've seen exclusions for 'failure to achieve projected savings' which is another killer. Make sure coverage includes errors in analysis, missed deadlines, and failure to identify billing errors. That's our core exposure.
Derek's absolutely right about the savings projections exclusion. I saw that in a policy once and ran the other way. Also watch for exclusions around 'regulatory compliance' or 'utility commission matters' - MidAmerican Energy has had some audits that touched on regulatory issues and you need coverage if a client claims you gave bad advice about compliance requirements.