Claims Made Insurance PolicyAttorneys continue to be confused with claims-made coverage as to if a claim is covered. If the coverage is not in force at the time a claim is made there is no coverage. Some attorneys assume that claims-made coverage is like an occurrence policy in that if a covered act occurred during the time that coverage was inforce you can make claim at any time in the future.   This is not true.

Recently an attorney called that had their coverage cancelled for nonpayment of premium and wanted to report a disciplinary action. Unfortunately we had to tell the attorney that there was no coverage currently inforce because the policy was cancelled for nonpayment of premium and as such there would be no coverage under the policy.  

With claims-made coverage the four questions you need to answer to determine if there is coverage are:

1.      Was claims-made malpractice coverage inforce when the claim was reported to the insurance carrier?

2.      What was the date that the covered act or error was alleged to have occurred? 

3.      When did the firm become aware of the claim?  Was it prior to the current inforce policy period or knowledge date?

4.      Is the retroactive (prior acts) date on the current inforce policy prior to the alleged act occurring?

If you cannot answer in the affirmative to the above 4 questions generally there is no coverage.

This makes the Professional Liability Insurance coverage predictable to the insured and the insurer at the time a claim is made.

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