Career Coverage provides an individual attorney with prior acts coverage for work done prior to their association with their current law firm. The reasons an attorney may want this coverage is:
1. To cover past acts if their old firm did not continue 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 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 for potential malpractice claims brought against said attorney at the old firm.
5. The old firm’s insurer attorney malpractice policy only covers attorneys while they are working for the firm. While L Squared does not represent insurers that sell such a policy, there are malpractice insurers that do have these policies in place.
Not all malpractice insurers offer Career Coverage. This is usually done by endorsement to the current firm’s policy. Malpractice underwriters may choose not to provide this coverage given the attorney’s claims/disciplinary and work history. It is important to request this coverage when starting with a new firm. If generally will not be added later.
Career Coverage is secondary coverage. It is only pays 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.
For the new attorney’s firm, adding this endorsement has consequences. If 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. Covered career coverage claims may cause the new firm’s malpractice insurance carrier 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 individually underwritten.
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.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
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