Moving a law practice can open up an exciting new chapter. But make sure to add insurance to your moving checklist. As with the practice of law, property and casualty insurance is regulated by each state. Insurers and insurance policies by state can differ. To prevent coverage gaps make sure that you notify all of your property & casualty insurance carriers and /or agents, including your attorney malpractice insurer as soon as possible. Do not wait until renewal.
Specifically for malpractice insurance, your insurer will either cancel your coverage midterm or non-renew your Insurance at renewal. Even if your agent and insurer are licensed in the new state this will likely occur. The new state may have different policy forms for even the same insurer or your insurer may not be licensed or not want to write in your new state. Remember that attorney malpractice insurance is written on a ‘claims-made’ policy form. So it is important that you address coverage for your past acts.
Be prepared to be told that your new state insurer may not want to cover your past acts in the old state. This can happen even if it is the same insurer. There are a number of reasons from the policy forms differing to more importantly your new insurer may not be writing attorney malpractice insurance in your old state. Particularly with attorney malpractice, insurers do not want claims in states where they may not have empaneled counsel for work you did in your old state.
If you cannot obtain past acts coverage you will need to exercise your rights under your old attorney malpractice insurance policy to purchase an Extended Reporting Period Endorsement (ERP/Tail). Your right to purchase an ERP is time sensitive. Generally you only have 30 or 60 days from coverage termination to exercise that right. So if you cannot obtain past acts coverage, purchase the ERP as soon as possible. This ERP must be purchased from your incumbent insurer. It is fully earned so be prepared to pay the entire amount due in one lump sum.
The good news is that if you did purchase an ERP, your new policy without past acts coverage is less expensive than a ‘fully rated’ policy. But your rates may be higher or lower depending on your new state insurer rates.
If you find yourself in need on a new insurance agent, contact L Squared Insurance Agency. L Squared is a nationwide agency that can help you transverse the move across state lines.