Just started my own utility auditing practice here in Springfield and working with some mid-sized commercial accounts. Looking at City Utilities bills mostly, some Ameren Missouri. What kind of E&O coverage do you all recommend for someone just getting started? I've heard anywhere from $500K to $2M minimum but not sure what's realistic for the premiums.
First time auditor - E&O insurance recommendations?
Elmer, congratulations on starting your practice! I've been using Professional Liability Insurance Services for about 3 years now. Started with $1M coverage when I was doing smaller CPS Energy accounts, now up to $2M since I'm handling some bigger industrial clients. The premiums aren't too bad - around $1,800/year for the $1M policy. They understand the utility auditing business which is key.
I second Angela's recommendation. Been with PLIS for 5 years, never had an issue. One thing to watch for is make sure your policy covers retroactive work - some carriers exclude claims related to audits you did before the policy started. Found that out the hard way when I switched carriers in 2011. Also make sure it covers defense costs outside the policy limits.
Jim makes a good point about retroactive coverage. I use Victor Insurance and they've been solid. The key is finding an underwriter who understands what we do. Had one carrier try to exclude "consulting services" which would have gutted the whole policy. Duke Energy requires all their approved auditors to carry minimum $1M E&O plus $2M general liability.
Derek's right about Duke's requirements. TVA has similar minimums. One more thing Elmer - make sure you get "claims made" not "occurrence" coverage. Claims made is standard for professional liability and typically cheaper. Also ask about tail coverage in case you ever want to retire or change carriers. The tail can be expensive but it's worth having.
All good advice here. I'll add that if you're doing any work in Connecticut, some of the larger industrial clients require proof of E&O before they'll even let you audit their Eversource bills. Had a $50K recovery get held up for two weeks because the client's legal department needed to review my insurance certificates. Small price to pay for peace of mind though.
Thanks everyone! This is exactly the kind of practical advice I was hoping for. Going to get quotes from PLIS and Victor this week. Better to have it and not need it than the other way around, especially when I'm seeing some of these AEP Texas bills with demand charges over $15K per month.