Attorney malpractice insurance protects in case of a malpractice claim made against your firm. Simple enough. But when to report a claim?
A major reason for claims denial is prior knowledge. Of course, reporting a claim that’s not a claim could impact your insurance rates and future insurability. Every situation has its own set of facts. And every attorney malpractice policy is different.
The AIG policy provides guidance that is similar to other attorney malpractice insurer policies:
“VIII. Claims
1. Notice of Claims. You must give us written notice of any claims made against you as soon as practicable but not later than sixty (60) days after expiration of the policy period or any applicable extended reporting period. In the event suit is brought against you, you must immediately forward to us every demand, notice, summons, complaint or other process received directly or by your representatives. Written notice of any claim against you, as well as of each demand on or action against us, must be delivered to us at the address stated on the Declarations.
All notices to us must be in writing. Notice given by or on behalf of you to our agent shall be considered notice to us.
2. Discovery Clause. Should you first become aware during the policy period of a wrongful act for which coverage is otherwise provided hereunder, and should you give written notice to us of:
a. the specific wrongful act;
b. the injury or damage which has resulted or may result from such wrongful act; and
c. the circumstances by which you first became aware of such wrongful act,
then any claim that may subsequently be made against you arising out of such wrongful act shall be deemed for the purposes of this insurance to have been made during the policy period in which such notice was given to us.”
Consult your specific policy to make sure that you follow that insurer’s guidance. If in doubt report the claim in writing. Discussing the issue with the insurer’s ‘claims repair’ in not normally considered notice. One reported non-claim is much better than one non-reported incident that turns into a claim.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080