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  • Writer's pictureAIM

Ask the Underwriter: Prior Acts Coverage and Legal Malpractice Insurance

Recently, I helped a lawyer secure coverage for his new practice.  He had been with a couple of firms up to that point in his career.  He advised me that those previous firms were no longer around, and he had no idea if they had purchased tail coverage.  When I brought up prior acts coverage, he asked me, “Wouldn’t the prior firm’s policies cover my prior acts?" 


Graphic with question, "Will my old firm's legal malpractice insurance policy cover my prior acts?

This lawyer was confusing the occurrence form, which is for homeowners and auto insurance, with Lawyers’ Professional Liability Insurance (LPLI) which is typically written on the claims made and reported form. With occurrence policies, you do go to the policy that was in place when the incident occurred for coverage.  This is where the lawyer’s thought process was taking him.  And at one point, LPLI was written on the occurrence form. 

 

However, starting in the late 1970s, the insurance industry began to move away from writing LPLI on the occurrence form in favor of the claims made and reported form.  It has been some forty-plus years since we have seen an occurrence form LPLI policy.

 

With the claims made and reported form, coverage is limited to liability for only those claims that are first made against the insured and reported to the carrier during the policy period.  That is, you go to the current policy, not a prior policy period, for coverage.  As the insured maintains continuous coverage over the years, he builds prior acts coverage.  We addressed prior acts coverage in a previous Ask the Underwriter.  Prior acts coverage is how the claims made and reported policy addresses claims arising from work performed or that should have been performed in prior years when you must look to the current policy for coverage. 

 

Because this lawyer had maintained continuous coverage throughout his career, albeit at different firms, we were able to offer him prior acts coverage.  Needless to say, he opted to take the prior acts coverage and has a better understanding of claims made and reported policies. 

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