With Professional Solutions Insurance Company (PSIC) dropping Lawyer s Professional Liability Insurance what happens to the “Free” Retirement Tail?
- If PSIC has issued the non-practicing extended reporting period endorsement (ERP) attached to your policy, then you have nothing to worry about. PSIC continues to be in business as an insurance company and will meet its obligations under the terms of your policy.
- If you renew with Carolina Casualty Insurance Company (CCIC) there should not be an issue. CCIC purchased the PSIC renewal rights. They have stated that they will honor time spent with PSIC for the purposes of determining if you quality for a non-practicing ERP.
- If you do not renew with CCIC, then their obligation to you ends when the PSIC coverage terminates. Keep this is mind if you switch to a different insurer.
L Squared Insurance should be able to help you with this planning. Depending on your timeframe for retirement they may have other insurers that will offer a non-practicing ERP after one year with a new insurer.
Otherwise most attorney malpractice insurers do provide an ERP if you are with them at the time you stop practicing for an additional premium. The cost for doing so is between 2.5 to 3.5 times the inforce premium at the time you cancel or do not renew the coverage your attorney malpractice insurance policy.
But remember the time to make the decision as to whether you renewal with CCIC is before renewal not after. Once you renew with a different insurer your rights to the ERP from CCIC end.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080