An errors and omissions policy can only provide you with benefits as long as it’s active. Let’s say you retired as an agent, and discontinued your E&O policy. One day an old client of yours files a lawsuit against you for inadequate information when you provided your services. Since your policy is no longer active, you will have to bear the hefty costs of the lawsuit out of your own pocket.
In order to stay covered, you need to have an active E&O policy during the lawsuit and when the inciting incident occurred.