Quick answer

The answer depends on the policy. Some policies require prompt notice of a claim, while others also allow or require notice of circumstances that may reasonably lead to a claim. Waiting for a lawsuit can create unnecessary risk.

Examples that deserve attention

• A written demand for money or corrective action.
• A client threatens to sue.
• An attorney contacts the brokerage about an alleged mistake.
• A licensing or disciplinary complaint alleges professional wrongdoing.
• A transaction problem creates a clear potential for financial loss.

Claims-made timing matters

Claims-made policies are sensitive to when a claim is first made and when it is reported. Reporting after renewal or after changing carriers may raise prior-knowledge or late-notice issues.

Known circumstances and prior knowledge →

How to report a potential E&O claim →

ECLICK broker perspective

When an insured is unsure whether something should be reported, we prefer to review the wording and involve the carrier or claims contact rather than assume the matter is too small. A complaint can evolve quickly, and claims-made timing can matter.

Reviewed by Marwan Nassar, broker/owner of ECLICK Business Insurance Services.