Ask the Underwriter: How do I ensure I remain protected when moving from firm to firm?

I was recently asked by a lawyer how she could be sure she was protected against claims arising from the work she performed at one firm as she moved to another firm. I told her there were a couple of options to ensure she has coverage for her prior work.

First, I told her she could rely on the former member coverage provision in her former firm’s policy. Every lawyers’ professional liability I have ever reviewed contained a provision for lawyers who leave the firm. This provision affords coverage for the former lawyer for claims arising out of the work the former lawyer performed at the firm. I pointed out that the former member coverage would be there for so long as her former firm continues to be in existence and continues to maintain coverage for the firm.

Next, I advised that if she had concerns about her former firm’s future plans, she could inquire into her options to purchase individual tail from the firm’s carrier. Tail coverage is an extended claims reporting endorsement, and the former firm’s carrier may give her the option to purchase an individual tail. The tail endorsement would give her an extended period of time to report claims arising from her work performed at the former firm. The coverage would be set for the duration she purchased and would not have any dependency on whether her former firm continued or kept its coverage in place. However, this option would be dependent on whether her former firm’s carrier offered individual tail endorsements as some carriers only allow tail endorsements at the firm level.

Lastly, I told her she could discuss with her new firm about being added to their policy with prior acts coverage. For this option, I suggested the firm would need to check with their carrier to see if they could add her with prior acts as not all carriers allow this. But assuming the new firm is willing and the carrier allows it, she could be added to the firm’s policy with a prior acts date that matched her prior acts date on her old firm’s policy. There would be additional premium for the prior acts coverage, and she would need to work out with the new firm who would pay that additional premium.

For the record, I let her know that AIM does offer individual tail endorsements for lawyers leaving firms. And we allow firms to add lawyers to their policy with prior acts coverage assuming the lawyer has maintained continuous coverage.

Should you have any questions or concerns about coverage when changing firms, please call or email me. I am happy to walk you through the issues and the coverage solutions.