Golden Bear Attorney Malpractice Retirement Tail
Attorney Malpractice Insurance Policies are claims-made and reported policies. When the coverage ends the ability to report claims for past acts ends at policy termination. Attorneys leaving private practice via retirement, becoming a judge or working in the private or public sector need to protect their past acts. Insurers will not renew attorney malpractice policies for attorneys that are no longer in private practice. Given this it is important for attorneys to protect their past acts once coverage ends. For solo practitioners and small firms that may close once the practitioner leaves, the nonpracticing Extended Reporting Period Endorsement/Retirement Tail (ERP) may be an answer.
Note: For attorneys closing or leaving their small firm to work at another law firm the nonpracticing Extended Reporting Period Endorsement/Retirement Tail (ERP) is not an option. Coverage for their past acts is outside of the scope of this blog.
Each insurer’s policy differs on requirements and wording for obtaining this valuable ERP endorsement at no or reduced cost. Careful planning by the attorney may save the attorney thousands of dollars. The ability to request an ERP differs by insurer but is time sensitive. Regardless of the insurer, the attorney must completely stop private practice to obtain the nonpracticing ERP.
The Golden Bear Insurance Mutual policy provides a nonpracticing ERP based on the following policy language:
VI. CONDITIONS
M. Extended Reporting Period
3. Individual Extended Reporting Period
An Individual Extended Reporting Period will be offered if the Policy is cancelled or non-renewed by either the Insured or the Company for any reason other than for the Insured’s non-payment of premium or nonpayment of Deductible or Self-Insured Retention or for the following:
a. an employed lawyer of the Insured who becomes permanently disabled by an injury which impairs the physical and/or mental ability to perform his/her normal work for the Insured;
b. an employed lawyer who permanently retires and is no longer providing Legal Services on behalf of the Insured; or
c. an employee who is deceased.
The additional premium for an employed lawyer who became disabled, is retiring, or is deceased; the Individual Extended Reporting Period is fully waived.
The additional premium for an employed lawyer other than who became disabled, is retiring or is deceased, the Individual Extended Reporting Period is based upon a percentage of the rates in effect of
the date this Policy was issued and the proportionate percentage applied to the full annual premium.
Any employed lawyer of the Insured who wants to purchase Individual Extended Reporting Period must provide written notice to the Company within thirty (30) days of ceasing employment or providing any Legal Services, whether monetary or non-monetary on behalf of the Insured.
IX. DEFINITIONS
L. Extended Reporting Period means the period of time after the end of the Policy Period for reporting Claims by reason of Wrongful Acts that occurred after the Retroactive Date and prior to the end of the Policy Period. The Extended Reporting Period does not extend the Policy Period. Extended Reporting Periods are stated in Section VI. CONDITIONS, paragraph J.
O. Insured means:
1. the Insured stated in the Declarations;
2. any Subsidiary or Predecessor Firm of the Insured stated in the Declarations;
3. any person who is an employee, Independent Contractor, partner, principal, director, shareholder, or Executive Officer of the Insured, Subsidiary, or Predecessor Firm, but only with respect to Legal
Services;
4. any person employed as an attorney or “of-counsel” as evidenced in the Insured’s records, but only with respect to Legal Services performed for the Insured, including any such person who ceases the practice of law during the Policy Period because such person became permanently disables, is permanently retired or is deceased;
5. any former employee or Executive Officer of the Insured, Subsidiary, or Predecessor Firm, but only with respect to Legal Services performed prior to his or her termination as an employee or Executive Officer of the Insured;
6. the heirs, executives, administrators, and legal representatives of any Insured in the event of death, incapacity, or bankruptcy of that Insured, but solely with respect to the liability of that Insured as
otherwise covered by this Policy;
7. the spouse or domestic partner of any Insured, but solely with respect to the liability of any Insured as stated in Section II. COVERAGE ENRICHMENTS, paragraph D. Spousal Liability.
Q. Legal Services means professional services rendered by an Insured as:
1. a lawyer;
2. a paralegal;
3. a title insurance agent, provided such professional services are pursuant to a written agency agreement with a licensed title insurance company;
4. a notary, mediator, arbitrator, administrator, conservator, receiver, executor, guardian, trustee, court appointed trustee, or any other fiduciary role;
5. a member, director or officer of any non-profit professional legal association, ethics or peer review board, formal accreditation or licensing body, or similar committee related to the legal profession; or
6. as a government advisor or lobbyist.
Coverage with respects to Legal Services shall only apply for such professional services performed by an Insured for remuneration inuring to the benefit of the Insured, or on a pro bono basis, but solely if, prior to the rendering of Legal Services, an Executive Officer of the Insured approved the performance of such Legal Service without a fee.
Switching insurers near retirement to save a few dollars may cost an insured attorney thousands of dollars to buy the same protection. Planning retirement or a transition out of private practice should be discussed with your malpractice insurance agent prior to ending private practice when possible.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
