how long should you keep professional liability insurance as an attorney

What happens when a lawyer's insurance policy expires?

If you drop your professional liability coverage for a period of time, you may lose coverage for all legal work you’ve done in the past. Extended Reporting Period Many claims-made policies have an extended reporting period of 3-6 months that is included in the policy at no cost.

How long should you hold onto your insurance policy?

Oct 06, 2020 · Annual Premium: $1,610. At year 5, this same firm’s premium: $3,000. Many factors are evaluated when determining the cost of insurance for a solo attorney. There is a large range between premiums that solo attorneys potentially pay for their professional liability insurance. However, the one thing that most attorneys come to realize is that ...

How long should you retain an occurrence-based liability policy?

Apr 18, 2013 · Lawyers' professional liability insurance is often called a "long–tail" line of insurance. An act or omission may take place today, but a claim arising from that act or omission may not be discovered or made against the lawyer for …

What is lawyer's professional liability insurance?

Jun 04, 2012 · How long one should carry his or her professional liability policy depends on the type of policy they have purchased (as above) and the statute of limitations for specific types of injury. As an example, if you are a pediatric nurse, the statute of limitations for filing a suit involving a minor (someone 17 years of age and younger) is much longer than that for a suit …

How long is professional liability insurance good for?

This is generally a 30- to 60-day period, but you can extend this period to a year or more for an additional cost. Your insurance company only covers claims made against your business during your policy period or within the extended reporting period.

What is tail coverage for lawyers?

A: Tail coverage retains the policy limits that were in place on the last policy of an attorney's career. Therefore, you should consider whether the premium savings on the reduced limits of liability are worth the potential exposure in retirement.Oct 11, 2021

Are lawyers required to have malpractice insurance in Texas?

Are Attorneys in Texas Required to Maintain Insurance? No. ... Unlike attorneys in Oregon and Idaho, lawyers practicing law in Texas are under no obligation to carry malpractice insurance.

Are malpractice and professional liability the same?

Malpractice insurance is another name for professional liability insurance for legal or medical professionals. No matter what it's called, professional liability policies offer coverage if you make a mistake in your professional service.

Is tail insurance necessary?

Tail coverage only applies to a claims-made policy. It extends the amount of time a claim can be brought against you and reported. Because it doesn't matter when a claim gets filed with occurrence insurance, as long as the loss occurred during your policy period, tail coverage isn't necessary.

How do you buy tail coverage?

1: You can only purchase Tail Coverage from your existing claims-made insurance carrier. There is a number of “A Rated” insurance companies that are now willing to write Tail Coverage for physicians leaving another company. We can shop your Tail Coverage among these companies, insuring you get the best possible price.

What are client protection funds?

What is the Client Security Fund? This is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonest conduct by a California lawyer. It is a State Bar program paid for entirely by California lawyers.

Does New York require attorneys to have malpractice insurance?

New York does not require its lawyers to purchase and maintain malpractice insurance. However, a number of states now require their lawyers to notify their clients at the time of engagement if they have less than a minimal level of coverage. ... Notice to the client is required also if the lawyer's insurance is terminated.

Are Colorado attorneys required to have malpractice insurance?

Colorado lawyers in the private practice of law are required by Supreme Court rule to report to the Colorado Supreme Court Attorney Registration Office, on an annual basis, whether they have professional liability (malpractice) insurance. ... Not all Colorado lawyers in private practice carry malpractice insurance.

Is professional liability insurance a malpractice?

What is professional liability insurance? Professional liability insurance is also called errors and omissions insurance or malpractice insurance, depending on the industry. Its coverage focuses specifically on lawsuits that stem from professional services.

How does professional liability insurance work?

Professional liability insurance is a type of business insurance that provides coverage for professionals and businesses to protect against claims of negligence from clients or customers. Professional liability insurance typically covers negligence, copyright infringement, personal injury, and more.

What is the difference between professional liability and general liability?

The main difference between general liability and professional liability is in the types of risks they each cover. General liability covers physical risks, such as bodily injuries and property damage. Professional liability covers more abstract risks, such as errors and omissions in the services your business provides.

What is claim history?

Claim History. Claim history is another factor insurance companies consider when determining the cost of professional liability insurance. Insurance carriers recognize that all claims are not created equal. If a claim is reported but nothing is paid out, you can expect little to no change to your premium.

How much is a deductible on a car insurance policy?

Most policies require the firm to carry a deductible. The lowest available deductible is usually $1,000. Other common deductibles are $2,500 and $5,000. However, if you want to save on premium, you can have a deductible of $10,000 or higher.

What is step rate insurance?

Step rate is an industry wide pricing structure where the cost of insurance gradually increases during the first few years of coverage. Professional liability insurance is most commonly provided on a claims made policy. Because of this, your first year of coverage will be the least expensive year. The cost of insurance increases each year ...

How many hours do solo attorneys work?

Typically a solo attorney will not come across this pricing factor as most solo attorneys work at least 40 hours a week. But, for attorneys working part time, they can experience a pricing discount for the annual hours worked. Some insurance programs do not offer part time policies, especially for solo attorney firms.

When Do They Apply?

Non-practicing extensions provide extended reporting periods under claims-made professional liability policies—for no charge and for an unlimited duration—under three circumstances as follows.

Why Are They Necessary?

If an insured has had professional liability coverage written on a claims-made basis throughout the course of his or her career, it will be necessary to continue coverage even after he or she is no longer practicing.

Where Are They Found?

Nearly all non-practicing extensions are contained within four lines of professional liability insurance. Specifically, those written for:

What Do They Cover?

As noted above, non-practicing extensions in professional liability policies provide ERP coverage at no cost— and for an unlimited duration —in the event that an insured dies, retires, or becomes permanently disabled.

Concluding Thoughts

Non-practicing extensions are important considerations, especially when choosing between professional liability policies written for physicians, attorneys, accountants, and architects & engineers. This is especially true when an insured is contemplating retirement within the near future.

What is professional liability insurance?

Occurrence Coverage: A policy that provides coverage for claims arising from acts or omissions occurring during the period of time covered by the policy, regardless of when the claim is actually made.

Can you cancel an ERC?

Some insurers may allow the premium for the ERC to be paid in installments over time. If an installment premium is not paid, the ERC will be cancelled. It may also be possible to purchase an ERC with lower limits of liability than was provided by the expiring policy, thus reducing the cost of the ERC.

What is retroactive date?

Some policies have a "retro date" or retroactive date, which limits prior acts coverage to claims arising for work done in the name or on behalf of the insured firm on or after the retro date.

Does insurance cover lawyers?

Some insurers may offer a "part–time" policy to lawyers who are doing a limited amount of work . Even though the policy is issued on a part–time basis, at least one state bar–related insurer will cover full–time prior acts under such a policy. Example: Lawyer Smith leaves a law firm, and begins his own solo practice.

Question

Because lawsuits about medical care can be filed many years after an incident, do I need to continue my liability insurance after I retire? If so, for how long?

Nancy Brent replies

Specific answers for your questions depend on some additional information. For example, the first issue is whether you have a claims-made policy or an occurrence policy. Claims-made policies will cover a claim or lawsuit filed while the professional liability insurance policy is in effect.

What is an expert comment?

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion.

What is professional liability insurance?

Professional liability insurance is often an afterthought for large-scale construction projects. With builders risk, general and excess liability, and workers compensation risks to be addressed, professional liability often does not require the immediate attention of owners and contractors that are responsible for insuring ...

Do architects need professional liability insurance?

Since most architects and engineers maintain professional liability insurance, the cost of using their insurance as a means of protecting the owner of a project is typically charged as a component of their contract cost. Removing the requirement for professional liability insurance from the contract may not change the cost ...

What is breach of contract?

Breach of contract typically must be resolved in accordance with the provisions of the contract itself and involve principles of contract law and is not addressed by professional liability insurance. Errors and omissions in rendering of professional services may involve bodily injury or property damage, but these are often the subject ...

What is the lowest cost option for architect and engineer?

The lowest cost option is to require that design professionals provide specified limits of insurance and rely on their coverage for protection. This is also the least effective option in providing complete protection to the owner. Each architect and engineer in contract with the owner is required to provide professional liability insurance ...

What is design protection?

The protection applies to all design professionals providing services for an insured project. Since the owner is the named insurance on the policy, it can tailor the coverage to meet the risk requirements of a project (from the owner's point of view).

What is an OPPI policy?

The OPPI policy is triggered by a claim made by the owner against the professional liability policy of a design firm in contract with the owner. The owner gives notice to the OPPI underwriter at the same time it files a claim for errors and omissions against the design professional.

Why do businesses need general liability insurance?

General liability insurance for businesses helps safeguard business owners against unexpected risks that could result in financial disaster. Keep your general liability policies forever to remain protected against the unknown.

What is commercial auto insurance?

Businesses rely on commercial vehicle insurance to cover any cars, vans, or trucks used in conducting their business. Just like a personal auto policy, commercial auto insurance provides coverage such as collision, liability, uninsured motorist coverage, and medical payments (personal injury protection). As an occurrence-based policy, you want ...

Can you cancel medical malpractice insurance?

It is wise to never cancel your medical malpractice insurance policy to avoid leaving yourself exposed to future problems.

What is DBA insurance?

The Defense Base Act (DBA) provides contractor employees who work under government contracts outside the U.S. with workers’ compensation-type insurance coverage. The DBA provides medical treatment and compensation to employees of contractors who become injured in the course of employment. As DBA insurance provides continuous coverage until it is canceled, it is best to keep the policy papers as well as any amendments until the coverage is cancelled. Once cancelled, shred the policy as it will likely contain a great deal of personal information.

What is directors and officers liability insurance?

Directors and officers liability insurance is a type of insurance that covers directors and officers against claims made while serving as an officer or on a board of directors. For smaller businesses, D&O claims may not occur very often, but when they do it can be financially draining to fight the lawsuits. ...

What is general liability insurance?

General liability is a type of coverage most businesses must have for their own protection. Policies can help ensure that you do not have to pay the hefty expenses of out-of-court litigation, settlements, or judgements awarded by the courts. General liability insurance for businesses helps safeguard business owners against unexpected risks that could result in financial disaster. Keep your general liability policies forever to remain protected against the unknown.

What is a claims made policy?

Claims-made insurance policies, such as directors and officers’ liability insurance and professional liability, are only triggered by claims made against the insured business during the policy period and throughout the “tail” following the policy’s expiration.

What are high risk areas?

Some of the higher risk areas may include transactions involving securities, intellectual property, trusts and estates, plaintiff’s personal injury cases, and newly emerging areas such as loan modifications. In the intellectual property area, most carriers consider patent work a high risk area of practice, but, ...

Does in house counsel cover moonlighting?

This coverage is generally called “Employed Lawyers Coverage” and may or may not cover moonlighting and/or pro bono work.

What is considered consideration?

A consideration is the nature and extent of both your business and personal assets, since, if you are liable for malpractice, your personal assets are potentially subject to collection under a judgment. Another consideration in determining your appropriate limit is whether you want a per claim limit for a given policy period for multiple claims. ...

When Do They Apply?

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Why Are They Necessary?

Where Are They Found?

What Do They Cover?

Concluding Thoughts