Ask the Underwriter: I let my policy lapse, but I have a claim being asserted against me from a time when I had a policy. Do I have coverage for this matter?

We have had this exact scenario come up too many times in the last few months not to address it in this column. The answer to the question is no. That is because the lawyers professional liability policy, including the AIM policy, is a claims-made and reported policy, not an occurrence policy. With an occurrence policy like auto or homeowners insurance, you do go back to the policy period in place when the incident occurred, but not so with the claims-made and reported policy.

With the claims-made and reported policy, you must look to the current policy for coverage. And, as we have previously discussed, to have coverage for prior work, you must continuously maintain your coverage after establishing your prior acts date with your first policy period. Even if you had coverage for many years, but you let the policy lapse, and you do not purchase an extended claims reporting endorsement (“tail coverage”), those prior policy periods are not going to provide coverage for a claim being made against you after letting the policy lapse.

To avoid this gap in coverage, be sure to continuously maintain your policy while you are actively practicing. Then, when you decide to retire or leave private practice for other reasons, contact AIM to discuss your coverage options to protect yourself against malpractice claims that might arise in the future from the legal work you performed in the past (i.e., tail coverage, or former member coverage for those leaving multi-member firms). And if your circumstances change in your practice, and you are not certain what to do about your coverage, contact AIM, and let’s discuss.