Many Law Firms have a misconception that the Lawyers Professional Liability Insurance Coverage for an attorney continues until the end of the policy term because it is paid for even after the attorney has left the firm. Once an attorney leaves a law firm their work after they leave the firm is not covered. That attorney will need to purchase a new policy or be added to their new firm’s Lawyers Professional Liability Insurance policy to have on going coverage.
With this stated, for most Lawyers Professional Liability Insurance policies the old law firm that the attorney left continues to have coverage under the old law firm’s Lawyers Professional Liability Insurance Policy as long as the Law Firm continues to maintain continuous clams made Lawyers Professional Liability Insurance. This is because most Lawyers Professional Liability Insurance policies define as an “insured” past and present attorneys, employees & partners for work they have done on behalf of the named insured firm. Given this in many situations, there is no need for the firm or the individual to purchase an individual extended reporting period endorsement “tail” for that departing attorney. Many carriers do not permit the purchase on an individual “tail” only a firm “tail” is permitted.
The concern that that parting attorney may have is that if the firm breaks up later or fails to maintain their Lawyers Professional Liability policy do they have a “right” or are they able purchase a “Tail” later. Once an attorney leaves the firm their “right” to purchase tail under their old firm’s policy ends. There are alternatives, such as a “Run Off” policy that can provide that individual coverage for that attorney, but they are generally expensive and sometime difficult to obtain.