Liberalization of Current Policy Coverages

Liberalization means, “If, during the policy term, the insurer files with the appropriate regulator, general revisions to the terms and conditions of this Policy that are intended to apply to all Insureds and provide broadened coverage without an additional or increased premium charge, then such broadened coverage will apply immediately to this Policy as of the date the filed revision is effective in the state shown in the mailing address of the Declarations (hereinafter “effective date”). However, this provision will not apply to claims that were first made against the Insured prior to the effective date of such revision.”


Introduction

Every insurance policy has a provision, known as a “liberalization” provision, declaring whether enhancements to a new version of the policy will apply to claims made under the current policy. CNA’s professional liability coverage is subject to approval in 53 jurisdictions across the US. The process of changing the policy form in every state can take years. Once a jurisdiction approves a new policy form that provides innovative and expanded coverage, the insurer can choose to increase the coverage even before an insured renews coverage under the new policy.

What is the change?

The current CNA policy states that revisions that broaden coverage without additional or increased premium which take place during the policy’s term would apply once the policy is renewed. This change hastens application to the benefit of your firm so that once general revisions to the policy are filed with the appropriate state regulator, the broadened coverage immediately applies to your existing policy coverage.

Why did we change it?

When new policy forms are filed with the state and territorial insurance commissions in the US, many allow the new coverage to apply immediately. It makes sense to start treating all claims from any jurisdictions in the same manner—applying the enhanced provisions to all policies in force is a good business practice.

How does it benefit my practice?

The CNA policy has routinely expanded coverage for the same premium. Many of the changes help insured firms expand into new services or take additional risks in their pursuit of enhanced business opportunities. Now that expanded coverage will apply to you immediately, without the often-lengthy wait for some regulators to review and approve the changes, it means that you get more coverage at no additional cost.


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