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Questions dealing with Extended Reporting Period Endorsements (ERP or Tail) are the most frequent questions that we get.  Many attorneys are shocked at the cost of an ERP.  ERP premiums regardless of your attorney malpractice insurance carrier are a multiple of the expiring premium.  The only exception to this is a ‘non practicing ERP’ or ‘retirement tail’ that an attorney can get if he is with a carrier that offers this option at retirement and you have been with that carrier enough years to qualify.

Questions from a law firm partner where the firm is disbanding:

“Hi Lee, my current firm of three lawyers is disbanding.    Do you have any products for a tail? 

I have joined another firm and I’m covered under their policy.    My two other partners are practicing solo and are looking around for policies also.   Maybe I can connect you with them.

Background; there were 4 partners.    One (my father) passed away suddenly leaving three of us.      The firm is disbanding and the current policy holder wants the “firm” to pay a significant amount and my former partners are saying they cannot afford that.

If I became a partner of the firm only since July 2013, could I get coverage from that point? “

Response from Lee:

“Although we do have products to cover your past acts, normally the best place to purchase an Extended Reporting Period Endorsement (ERP) is from you incumbent insurance carrier as a firm.  If for some reason this is not an option, then we may be able to help.  The cost for what is called a ‘runoff policy’ start at around $5000 per year per attorney, which assumes no claims. 

Minimum premiums start at $5000 per year regardless of the number of years being covered for past acts.  Each year to continue the coverage you would need to pay the premium again for the past acts coverage and it only covers you for work that you did.  So if you get dragged into a dispute for work done by another firm’s attorney there is no coverage.  Your other alternative is to see your new firm would get their carrier to cover your past acts.

Other caveats are that it only covers past acts, it is underwritten, and if there are firm claims issues then the carrier may not be willing to write the coverage.

To get the ERP from you incumbent carrier is a one-time premium, it is not underwritten, and cannot be declined because of past claims issues.“

Note that response is for a specific situation.  Your situation may differ.  Best to contact your attorney malpractice insurance agent to address your specific ERP issues prior to making any decisions on what to do.

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