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Request from our Client:

Need to add a rider to our Lawyers Professional Liability Insurance Policy to increase my limits to cover a large real estate deal for a client.

Response:

The term “rider” is normally associated with life insurance and health insurance policies.  For property and casualty policies the general term is an "endorsement."

As to the request, a Lawyers Professional Liability Policy is a “claims made policy.”  Given this, if a claim is made against the policy, the carrier will settle using the policy form in force at the time the claim is made, regardless as to what the coverage was in the past.  Once the policy is endorsed for the increased limits you need to maintain those limits until the statute of limitations has run to be assured that you have the proper coverage in place.  There is no temporary endorsement that would be added to accomplish this.

The alternative is to purchase an excess policy from another carrier to cover additional exposure.  Being a “claims made policy” you would then need to cancel it later and purchase an Extended Reporting Period Endorsement (ERP) for this policy.  You also would need to purchase this coverage from a carrier that would permit you to purchase the ERP. An excess policy and subsequent ERP will likely run in the thousands of dollars.

Lee Norcross, CPCU

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