Account snapshot
- Risk type
- Managed service provider with an open professional-liability claim
- Coverage placed
- Technology errors and omissions · Cyber liability
A failed project followed the MSP into renewal
A retail agent came to Nomos with an MSP whose recent professional-liability claim had made its insurance difficult to replace. A client migration had gone wrong, causing a prolonged interruption of the customer’s operations and a substantial demand against the MSP.
The existing insurer had advised that it would not renew. The agent’s initial replacement enquiries had also been unsuccessful: the insurers approached were unwilling to offer terms while the claim remained open.
The MSP continued to support customers and take on new work. The owner needed an insurance option for the ongoing business, without treating the past incident as something that would disappear at the next policy inception.
Explain the incident and the changes that followed
Nomos worked with the agent to separate three questions: what happened on the failed project, what the MSP now did differently, and what insurance was being requested for its continuing operations.
The client had introduced formal project approvals, documented testing and a clearer sign-off process before major changes. We requested supporting detail about those controls and the scope of services the MSP currently performed.
We also asked the agent to distinguish the known claim from other incidents or circumstances requiring attention. Policy dates, prior-acts terms and exclusions needed a careful discussion. The replacement placement could not be presented as a way to transfer an already-known loss into a new policy.
Work through the E&S underwriting questions
Nomos approached E&S underwriters with the claim history, an explanation of the failed project and the documented changes in how subsequent work was managed. The objective was consideration of the current risk without minimizing the past loss.
An underwriter agreed to develop a proposal, subject to further information and specified terms. We coordinated the questions through the agent and helped distinguish the proposed technology E&O and cyber coverage from issues outside the replacement placement.
The agent reviewed the option with the client, including the relevant exclusions, retention and coverage-continuity questions. The client accepted an E&S placement after those points and the remaining requirements were addressed.
A placement for the ongoing business
The outcome gave the agent a placement for the MSP’s continuing operations. It was not a promise that the new insurer would cover the prior claim or that every customer contract had been satisfied.
The obstacle was a professional-liability loss that made the account unacceptable to the insurers the agent initially approached. Working through the incident, operational changes and proposed terms allowed a different underwriting discussion.
Have a similar technology account?
Start with the incident, claim status, current services and renewal timeline. See our MSP and IT services specialty for related information. If customer requirements are also part of the request, our MSA insurance exhibit guide can help frame the questions.
