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We get this question frequently, especially after an attorney has received one of our mailers.  “I need prior acts coverage and your mailer states that you work with malpractice insurance carriers that offer prior acts coverage.”

This is true, in most cases admitted attorney malpractice carriers will offer prior acts coverage when writing a policy while matching the prior acts date that is on the current expiring policy.  Thus with a claims-made policy the prior acts coverage is maintained from one renewal to the next.  As has been mentioned before it is very important that the insured makes sure that the prior acts date on the renewal matches the prior acts date on the expiring policy.

But we also have a number of attorneys and/or law firms that have either never had prior acts coverage or let the coverage lapse.  Is it possible to “repair” the prior acts coverage?

Normally there is at least one insurance carrier that is willing to “repair” prior acts coverage that L Squared have access to.  Most of the time this is a non-admitted surplus lines malpractice insurance carrier.  These carriers will “repair” the prior acts coverage, but it comes at a stiff price.  Likely premiums, assuming no claims, generally start in the $5,000 per attorney per year range.  This cost will continue for this attorney or firm for at least a couple of years.  Again, it depends on the insurance markets as to if and when a firm can exit this market place and have their coverage written the admitted insurance market at more normal premiums.

Occasionally L Squared has an individual attorney that needs to just have prior acts coverage.  This can be for a variety of reasons.  The attorney is leaving private practice to become a judge or prosecutor and is being required to provide proof of attorney malpractice prior acts coverage after years of never having it.  Or the attorney is leaving a large law firm that carries a large deductible, and the attorney will be responsible for the deductible if there is a claim made against the attorney.  For a variety of reasons, the attorney cannot obtain a Lawyers Professional Liability Insurance policy with “career coverage”, which might reduce the deductible.  One of the main reasons is that the attorney is no longer in private practice and would not quality for attorney malpractice coverage.

In these cases the attorney does not need or cannot obtain an ongoing attorney malpractice policy but still needs prior acts coverage for past acts.  Again L Square normally has access to attorney malpractice insurance carriers that will offer what is commonly referred to as a “Runoff” policy.  Depending on the insurance market the policy may need to be renewed annually or sometimes will be offered for multiple years.

Note:  The above is general information about a Claims-made Insurance policy concept.  Different insurance policies and different situations may or may not treat these concepts in a similar manner.

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