1. Forms
2. PR
3. PR-02-00

What the form is

The PR 02 00 "Earlier Notice of Cancellation Provided By Us" endorsement is an Insurance Services Office (ISO) form used to modify the cancellation provisions within a medical professional liability insurance policy. Its primary function is to increase the number of days of advance notice that the insurer is required to provide to the named insured before cancelling the policy. This offers the insured an extended period to seek alternative coverage or address the reasons for cancellation.

Classes of business it applies to

This endorsement is specifically used with ISO's various medical professional liability coverage forms. Therefore, it applies to a range of healthcare providers and organizations, such as:

• Physicians and surgeons
• Clinics and medical groups
• Hospitals (though they may have manuscript policies, ISO forms can be a base)
• Other allied healthcare professionals or facilities that utilize ISO-based professional liability coverage.

Real-world example: A private medical practice might request this endorsement to ensure they have more than the standard 30 or 60 days' notice if their insurer decides to cancel their malpractice policy, giving them more time to secure new coverage without an interruption.

Special considerations

Key considerations for the PR 02 00 endorsement include:

• Unilateral Increase: The endorsement can only be used to increase the notice period; it cannot be used to shorten the notice period already stated in the policy or mandated by state law.
• State Regulations: Cancellation notice periods are often governed by state insurance regulations. While this endorsement can provide more notice than the policy's base terms, it cannot override minimum statutory notice periods if those are longer. Its availability and specific wording can also be subject to state approval. For instance, this form was noted as withdrawn in Illinois, with a state-specific endorsement (PR 02 05) introduced for Illinois changes regarding cancellation and nonrenewal. It was approved in California with the 09 08 edition.
• Mutual Agreement: While the title says "Provided By Us" (the insurer), the attachment of this endorsement is typically a result of negotiation or a request by the insured that the insurer agrees to.

Real-world example: If a state law mandates a minimum of 60 days' notice for cancellation of a medical malpractice policy, and the policy itself offers 30 days, the PR 02 00 could be used to increase the notice to, say, 90 or 120 days. However, it could not be used to reduce the notice period below the statutory 60 days.

Key information for agents and underwriters

• Agents: This endorsement can be a value-added offering for clients, particularly those in volatile specialties or markets, providing them with greater peace of mind regarding policy continuity. Agents should verify its availability and any state-specific versions or rules in their jurisdiction.
• Underwriters: When agreeing to this endorsement, underwriters are committing the company to a longer notification period before it can effectively cancel a policy. This should be factored into the overall risk assessment and pricing. Underwriters must also be aware of how this endorsement interacts with state-specific cancellation and nonrenewal laws. They need to ensure that the notice period provided by the endorsement complies with all applicable regulations and that the correct edition of the form is used.
• Coverage Gaps: By providing a longer notice period, this endorsement can help insureds avoid potential coverage gaps that might arise if they have insufficient time to secure replacement coverage.