Understanding Claims-Made Lawyers Professional Liability Insurance (LPL)
What Does “Claims-Made” Coverage Really Mean?
If you’re a practicing attorney your legal malpractice insurance is written on a claims-made basis. But what exactly does that mean and when are you actually covered?
Assuming that claims-made coverage acts like an occurrence policy in that if a covered act occurred during the time that coverage was in-force you can make a claim at any time in the future. This is not true. The concept is simple but critical: you’re only covered if the claim is made while your claims-made policy is active (or during a valid extended reporting period), and the alleged error happened after your policy’s retroactive date.
Let’s break that down.
The Two Requirements for Coverage:
1. The Claim Must Be Made During the Policy Period (or Extended Reporting Period)
A “claim” typically includes:
– A lawsuit
– A written demand for money or services
– A disciplinary or grievance proceeding
If a claim is made after your policy expires and you haven’t purchased tail (ERP) coverage, it will not be covered even if the alleged mistake occurred during your last policy period.
2. The Wrongful Act Must Have Occurred on or After the Retroactive Date
Also called the “prior acts date,” this is usually the date you first purchased continuous claims-made insurance. If the error or omission happened before that date, your current policy won’t cover it.
Example Scenario
Let’s say:
– Policy Period: January 1, 2025 – January 1, 2026
– Retroactive Date: January 1, 2020
– Alleged Error: June 1, 2021
– Claim Made: October 15, 2025
✅This claim is covered. It was made during the policy term, and the act occurred after the retroactive date.
But what if:
– Claim Made: February 1, 2026 (after the policy expired)
❌ This claim would not be covered unless you had purchased tail coverage to extend your reporting window.
Understanding when your claims-made policy covers you isn’t just an insurance detail it can make or break your financial protection as an attorney. A claim denial because your policy lapsed or your retroactive date was reset can have serious consequences. Recently an attorney called to report a disciplinary action coverage was cancelled for Nonpayment of Premium. Unfortunately we had to tell the attorney that there was no coverage currently in-force because the policy was cancelled.
If you’re changing insurers or retiring, consider a tail policy to preserve your coverage.
Need Help?
Not sure where your retroactive date is? Thinking about switching carriers or retiring? Contact L Squared today we’re happy to help you make sense of your policy before it’s too late.
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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
