Unlike many other types of insurance, Attorney Professional Liability Insurance cannot be bound without the malpractice insurer’s specific application. Some malpractice insures will use a competing insurer’s new business application but this is the exception rather than the rule.
As an independent malpractice insurance agency we work with my different malpractice insurers and can use our one page ‘indication’ form to provide what is called a ‘premium indication’. The ‘premium indication’ is subject to a full insurance carrier application along with supplements. The malpractice carrier underwriter must approve the application. Once the application is approved, we are allowed to provide ‘binding terms’ that may or may not be subject to additional conditions. Some malpractice applications are not approved on the first go. Underwriters may ask for more information depending on application answers. This makes for back and forth questions and answers. And depending on the answers premiums do change.
It is at this point upon acceptance of the terms and fulfilling the conditions that coverage can be bound.
In addition to the logistics, many malpractice insurance underwriters close early for end of the year and/or are fully scheduled with a backlog of work they already need done before they can leave.
Law firms that wait until the last minute to obtain coverage may get coverage sometimes at a much higher price or may not get it in time if they need insurance coverage proof by January 1 with only one working day left in the year.