This question comes up with some frequency from Prospective Insureds getting close to retirement:
“I received your inquiry letter dated June 14, 2017. I currently insure with MLM However, I am considering retirement within the next two years and I am wondering what insurance is offered for lawyers in retirement.
MLM has handled all my past claims and any recent possible legal malpractice claim has been reported to MLM for notification.”
“Assuming that retirement means completely stopping the practice of law, you should get your retirement Extended Reporting Period Endorsement (Tail) from MLM. Any other option will be extremely expensive and not in your best interest.”
While it is possible to buy a standalone policy to just insure an attorney’s past acts (Tail), these policies tend to be very expensive; normally needing to be renewed each year. Standalone Tail policies are individually underwritten and can be declined because of underwriting concerns such as prior claims and areas of practice. The terms and conditions of the standalone Tail policy are normally not as generous as an admitted and many non-admitted insurance carrier’s Attorney Malpractice policies.
Most Lawyers Professional Liability Insurance policies give the insured the right to purchase an Extended Reporting Period Endorsement (ERP or Tail) within a specified timeframe after the coverage has terminated. This is a right of most claims made policies that cannot be taken away by the insurer. The pricing terms and conditions are generally stated in the Lawyers Professional Liability Insurance Policy. The ERP is attached to the last inforce policy and extends the reporting period for claims; all other terms and conditions are not changed. A purchased ERP is usually purchased from 1 to 5 years for extending the reporting period. Some carriers offer an unlimited ERP. Pricing is a multiple of the current inforce premium.
In addition, if the attorney as in this case has been with the same carrier for a number of years, the carrier likely will offer a ‘Non-Practicing ERP’ at no cost.
This is general information based on a specific inquiry. Note that given individual circumstances this response may or may not be appropriate. Always best to check with your incumbent professional liability insurance agent to help guide you.