Is this Lawyers Professional Liability Policy Extended Reporting Period Endorsement Full Prior Acts?

Question from Client:

Is this Lawyers Professional Liability Insurance Policy Extended Reporting Period Endorsement (Tail) Full Prior Acts?

Response:

Many people think that there is a separate policy issued once “Tail” is purchased on a Lawyers Professional Liability Insurance Policy.  This is not the case.   Generally the endorsement is just one page and only one or 2 paragraphs long.  There is not a separate policy that is issued.  The Extended Reporting Period Endorsement (Tail) is attached to the last in force policy that was in force at the time coverage was terminated.  Other than amending the reporting period, for a specified time from up to unlimited, the endorsement does not amend any coverage or policy terms.  So if your last policy is “Full Prior Acts,” then the Extended Reporting Period Endorsement is “Full Prior Acts.”  Just remember that the endorsement is only “Full Prior Acts,” for the time reporting period specified on the endorsement.

All other terms and conditions of the terminated Lawyers Professional Liability Policy continue to remain in force.  For most “Tail” purchases this is not a major concern.  But recent claims activity in the last policy period or after the “Tail” is purchased, an issue that can arise is bumping into the aggregate policy limit.   Each claim reported in the last policy period plus any reported during the period of the Extended Reporting Period, count against the aggregate policy limits.  In some cases this can exhaust the aggregate limit.  Once the aggregate limit is exhausted no further claims will be covered.