Attorney Malpractice Insurance Retirement Tail
With claims made policies such as Attorney Malpractice Insurance (Lawyers Professional Liability (LPL)) when coverage ends the ability to report claims for past acts ends at policy termination. Attorneys leaving private practice via retirement, becoming a judge or working in the private or public sector need to protect their past acts. Insurers will not renew attorney malpractice policies for attorneys that are no longer in private practice. Given this it is important for attorneys to protect their past acts once coverage ends. For solo practitioners and small firms that may close once the practitioner leaves, the nonpracticing Extended Reporting Period Endorsement/Retirement Tail (ERP) may be an answer. The ERP is an endorsement attached to the last inforce policy that extends the claims reporting period. An ERP does not modify the policy terms and conditions. The ERP does not modify the expiring policy’s liability limits or deductible. The ERP does not provide coverage for work done after the policy expires.
Not all insurers offer an individual retirement ERP. Each insurer’s policy differs on requirements and wording for obtaining this valuable ERP endorsement at no or reduced cost. Careful planning by the attorney may save the attorney thousands of dollars. If an attorney were to purchase an equivalent ERP, plan on paying 2.5 to 3.5 times the expiring premium. The ability to request an ERP differs by insurer and is time sensitive. Regardless of the insurer, the attorney must completely stop private practice to obtain the nonpracticing ERP.
Note: For attorneys closing or leaving their small firm to work at another law firm the nonpracticing Extended Reporting Period Endorsement/Retirement Tail (ERP) is not an option.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
