Career Coverage is offered by some Attorney Malpractice Insurance carriers. This is usually done by a endorsement to the current firm’s policy or a separate standalone policy.
The purpose of Career Coverage is to offer prior acts coverage for work done by an individual attorney prior to their association with the current law firm. The reasons an attorney may want this coverage is:
1. To cover past acts if their old firm may not have continued professional liability insurance claims made coverage and did not purchase an extended reporting period endorsement.
2. The attorney is concerned that their past firm may not in the future continue attorney malpractice coverage and likely will not buy a firm extended reporting period endorsement.
3. The attorney was a solo practitioner and is joining a new firm. The attorney is discontinuing his/her old solo firm and does not wish to buy an extended reporting period endorsement.
4. The attorney is leaving a large firm and is responsible for a “large” deductible if the attorney has a malpractice claim brought against the old firm in the further that the attorney had responsibility for with their old firm.
5. The carrier that their old firm is with has a Lawyers Professional Liability Insurance policy that only covers attorneys while they are working for the firm. While L Squared does not represent any insurance carriers that sell such a policy, there are Malpractice Insurance carriers that do have these policies in place.
Career Coverage is generally secondary coverage. In other words, it is only responsible for paying covered losses if there is no other coverage to answer for the act. As such, most attorneys do not need this coverage when moving from one firm to another.
This is not automatic coverage that can be added to a firm’s policy. Many insurance carriers will not offer a career coverage endorsement. The insurance carriers that do will underwrite the individual attorney’s past work, insurance and claims history. In some cases the insurance carrier may decline to offer the career coverage endorsement. It normally has to be asked for at the time the attorney is starting with the new firm and cannot be added on at a later date.
For the new attorney’s firm, adding this endorsement can have consequences. If at a later date, the attorney that has the career coverage endorsement has a malpractice claim, it impacts the current firm’s insurance coverage and insurance history. Adding career coverage to a policy opens the new firm up to past acts where the firm has no control or idea what controls existed at the old firm. In some cases this endorsement when a claim(s) have been presented to the new firm’s malpractice insurance carrier has caused the firm to be non-renewed and/or renewed coverage at a much higher premium.
It is also possible to obtain an individual career coverage policy, but these are expensive and are also individually underwritten.
If you have further questions about career coverage do not hesitate to contact L Squared Insurance Agency LLC, we will be happy to answer your questions and discuss your individual options.
Note: The above is general information about an Attorney Malpractice Insurance policy concept. Different insurance policies and different situations may or may not treat these concepts in a similar manner.