Need some perspective from you folks. Had a client dispute arise over a rate analysis I did for Empire District Electric here in Springfield. Client claimed my recommendation to switch from Schedule LP-1 to Schedule LP-2 actually cost them money instead of saving it due to a seasonal adjustment I missed. They want their $3,200 audit fee refunded plus $8,500 in additional costs they claim I caused. Filed a claim with my E&O carrier and they're saying this falls under 'consulting services' which aren't covered - only 'professional errors' are covered. Isn't utility auditing exactly professional services? This seems like a bogus denial to me.
Claim denied - 'consulting services not covered'
Elmer, that sounds like your carrier is trying to weasel out of a legitimate claim. What company are you with? I've seen similar language in some of the cheaper policies where they try to draw artificial distinctions between 'consulting' and 'professional services.' In Texas, CenterPoint Energy tried something similar with one of my audits and my carrier (Professional Underwriters) told me the distinction was meaningless - utility auditing is inherently professional work that requires expertise and analysis.
I'd push back hard on that denial Elmer. If you have a policy that covers 'errors and omissions in professional services' then utility rate analysis absolutely qualifies. The insurance company is probably hoping you'll just accept their denial and go away. Get copies of your policy language and consider hiring an attorney who handles insurance coverage disputes. Georgia Power tried a similar rate switch denial with me and it took 6 months but my carrier eventually covered it fully.
What's your policy limit and deductible Elmer? If the total exposure is only $11,700, it might not be worth fighting the carrier if your deductible is high anyway. Sometimes these battles cost more in time and legal fees than just settling with the client directly. I had a similar situation with FirstEnergy last year - just refunded the audit fee and moved on rather than deal with insurance company games.
Don't let them off the hook Elmer. These carriers collect premiums specifically to cover this type of professional liability. If utility auditing wasn't a covered service, they shouldn't have issued you a policy in the first place. I'd file a complaint with your state insurance commissioner if they maintain the denial. LG&E had a similar rate schedule issue with one of my clients and my E&O carrier stepped up and handled it properly. You deserve the same coverage you're paying for.