There are two ways to get coverage for claims that arise outside your policy period: tail coverage and retroactive (or prior acts) coverage.
It’s important to ensure you have the right combination of these types of coverage anytime you make a change in your legal professional liability insurance so you have the protection you need.
Most legal malpractice policies cover claims made during the reporting period; this can be very different from claims that originate from acts performed during the reporting period. If you only have coverage for what’s happening now, your future self could have to pay the price after your coverage period is up.
What, exactly, is tail coverage?
Tail coverage is also referred to as an extended reporting period. It provides coverage for claims made after your policy reporting period ends. This is particularly important when an attorney retires, changes professions, or ends coverage for any other reason. It ensures continued protection from liability for errors and omissions in work performed while the attorney’s policy was active.
How do I purchase tail coverage?
Tail coverage can be purchased for a period of years, or unlimited tail coverage is also available. The tail coverage premium will typically be calculated as a percentage of your annual policy premium and costs less per year the longer the extended reporting period you purchase. For example, you might pay 100% of your policy premium for the first year of extended reporting but less than 300% for unlimited tail coverage.
How do I know if I need tail coverage?
If you’re changing jobs, tail coverage can protect you from claims arising from acts you performed in your prior position, which your new employer’s malpractice insurance may not cover.
If you’re just changing insurers, you may be able to get prior acts coverage from your new insurer for this type of protection. If you go this route, make sure you understand the terms of this coverage, including the retroactive date.
If prior acts coverage is not available from your new insurance provider or insufficient to provide you complete coverage, then you should look into purchasing tail coverage for your current policy to eliminate any gaps.
A knowledgeable agent can help you identify the combination of tail and retroactive coverage that you need and determine the most cost-effective solution.
The dedicated account services team at ProDefender specializes professional liability plan design, underwriting, and client service. Get in touch with us at (866) 434-8557 to get a quote or ask any questions you have about lawyer’s professional liability insurance.