17 Sep Professional Liability Insurance for Attorneys
Professional Liability Insurance for Attorneys
As an Attorney, Professional Liability may the most important Insurance coverage you ever purchase. There are many things that are unique to Professional Liability that may not readily apparent to someone purchasing Professional Liability for the first time. We are going to go over some of the basics of Professional Liability Insurance and why you need it to protect your practice.
Professional Liability Insurance for Attorneys- What is E&O?
Professional Liability Insurance is often referred to as Errors & Omissions Insurance, or E&O. Professional Liability is a type of Liability Insurance that is specifically designed to protect you against claims that arise from the advice you give. Typical professions that need Professional Liability include attorneys, doctors, consultants, insurance brokers, accountants, and just about every other profession that relies on advising or consulting a client.
Professional Liability Insurance for Attorneys- Claims-Made
Most people are familiar with occurrence based Insurance policies, meaning the policy covers claims based on the time of the occurrence, not when the claim filed. However, the majority of Professional Liability policies use a claims-made form. Claims-Made policies differ from occurrence policies in that they cover claims based on when the claim was filed, rather than when the work was performed. It is very important to understand the difference because as an attorney, claims may arise years after the work was completed.
Professional Liability Insurance for Attorneys- Retro Dates & Tails
Claims-Made policies can vary from other Insurance policies in that they typically have a retroactive date, or retro date. A retro date is similar to a policy inception date, however, as you renew your policy each year, the retro date should stay the same. This means each year your policy renews, your current policy will provide coverage for the year before as well. As you can imagine, there is an increased cost associated with this as well. As we explained above, a claims-made policy provides coverage based on when the claim is filed, not when the work was performed. Therefore to maintain coverage, you must keep your current policy in force, or purchase an extended reporting period, also referred to as a tail. A policy tail is optional, but you can purchase this to extend the reporting period after the policy period has ended. Many Attorneys purchase this coverage when they retire to assure that their policy continues to cover claims that may arise well after the work was completed.
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All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.