Covering Prior Acts for an Attorney Joining Your Firm
The short answer is “Don’t do it.”
Prior to making an offer to your new potential attorney about joining your firm this is an important conversation.
The best course of action is for your new attorney to purchase an Extended Reporting Period Endorsement (Tail) for past acts. This walls off the attorneys past acts from your firm.
Also called career coverage, the impacts of picking up an attorney’s past acts exposures:
- Expect a premium increase for your firm’s Lawyers Professional Liability Insurance. For a multi person firm an insurer may add an attorney without prior acts at no cost midterm. Any premium change occurs at the next renewal. With prior acts coverage, the insurer will charge for the increased firm exposure. Count on additional premium costs at renewal over and above an attorney added without prior acts coverage.
- An insurer may refuse to add prior acts coverage for additional attorneys. This can be because of the insurer’s underwriting practices, loss history of the attorney, or the attorney’s past practice areas.
- Malpractice Insurance policy definitions “Of Counsel” attorneys coverage precludes adding past acts outside of work done for the current firm. The reason is by policy definition the “Of Counsel” attorneys coverage is only for work done on behalf of the named insured firm.
- Adding an attorney’s prior acts exposure opens your law firm up to malpractice claims from the attorney’s prior firm. Covering past acts for the incoming attorney means your firm’s insurance protects them against claims outside of your control. The new attorney may not have even worked on the case. We have seen ‘surprise’ malpractice claims that have significant cost and/or insurability impacts. This can be a game-changer.
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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
