Tail Coverage Issues
by James R. Kreider, Underwriting Manager of Legal Mutual

Lawyers Professional Liability policies are issued on a Claims Made basis. One important feature of a Claims Made policy is that coverage is based on the date that a claim is reported, and not on the date that the incident occurred. This is of particular significance to the sole practitioner who is retiring from practice, taking a leave of absence or joining another law firm.

An attorney should address the question of how can I protect myself from claims that develop after my own practice is discontinued. The solution to this coverage question is to obtain an Extended Reporting Period or Tail endorsement.

To the sole practitioner who is retiring, the Tail coverge offers peace of mind in that your professional liability insurance coverage will be extended beyond the date that you retire.

If you will be taking a leave of absence from practicing law, you should also consider securing Tail coverage. Most insurers are not willing to provide coverage for prior acts if there has been a lapse in your insurance coverage. To ensure that there will be no gaps in your insurance coverage. To ensure that there will be no gaps in your insurance coverage when you return to your law practice, a Tail endorsement should be purchased at the time you suspend your practice.

For the sole practitioner who is joining another law firm, it also may be advisable to obtain a Tail coverage endorsement. Coverage is usually excluded for professional services not performed on behalf of the named insured firm or predecessor firm. Also, many law firms would not want to assume responsibility for a claim that was the result of services rendered by you, while you were a sole practitioner. To avoid a gap in coverage in this situation, a Tail endorsement should be purchased.

Legal Mutual offers both a Three Year and an Unlimited Extended Reporting Period or Tail endorsement to its insureds. You should consider carefully which option best suits your needs.

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