Suspended and/or disbarred attorneys look for malpractice coverage because of cancelled or non-renewed policies. So, it begs the question can a suspended attorney obtain an attorney malpractice insurance policy?
Expect a suspension exclusion from insurers. Insurance underwriters will reject applications showing an attorney’s license suspended, revoked, or voluntarily surrendered. Even without a specific exclusion, as a suspended attorney, they should not be performing any of the services of an attorney. We know of no malpractice insurer that will write a new policy to cover a suspended attorney.
A malpractice insurer may permit the coverage to continue until renewal, but most cancel as soon as notified of the attorney’s suspension.
Typical coverage exclusion for a suspended attorney is:
“Professional Legal Services rendered by an Insured while the Insured’s license to practice law was suspended, revoked or surrendered.”
Suspended attorneys need to act quickly. A suspended attorney has little hope of finding other coverage to protect past acts. There only hope for protecting past acts is prior to cancellation or non-renewal of current coverage. Depending on the policy language, insurers may or may not permit purchasing an Extended Reporting Period endorsement (ERP), A typical condition for purchasing an ERP though is:
“The Insured’s license to practice law has not been suspended, surrendered or revoked.”
Firms with suspended attorneys on their payroll should expect issues as describe above. Once the suspended attorney is no longer associated with the firm, an insurer may offer malpractice insurance terms. But the firm should expect that their premiums will increase dramatically.
It is important to check your policy to see what rights you may or may not have. Protecting past acts may prove extremely difficult.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080