Insurance

Your legal professional liability policy is a claims-made and reported policy. This means that claims are covered if: (1) a claim is made and reported during an active policy period or extended reporting period, and (2) the alleged acts or omissions in the rendering of or failing to render legal services falls within the prior acts date stated on an active policy.

A claim is the notification of an incident made to the insurance company and a demand for benefits as provided by the policy. With a claims-made and reported policy, a claim must be reported to the carrier as soon as you know of the claim and during the time your policy is in effect. Unless this is done, the claim may not be covered.

Notification is the opportunity for an insured to report any potential claims or incidents which may result in a claim during the policy period. Reporting of all potential claims is crucial to the claims-made and reported policy and all insureds are asked to disclose incidents as soon as they are aware of them.

The amount that the Insured is obligated to pay on each separate claim.

Also referred to as tail coverage, is an option for extending the reporting period for claims that may be made after the policy term endorsement. Lawyers Mutual offers two endorsement options to extend the reporting period:

• 4-Year Period: provides up to four years after the policy period ends to report claims;
• Unlimited Period: provides an unlimited timeframe to report claims.

The limits of liability is the amount that will be paid for any claim or related claims.  The per claim limit is the total amount less the deductible that will be paid per claim during the policy period.  The aggregate limit is the total amount that will be paid if multiple claims are made and reported during the policy period.  The limits of liability are reduced by all claim expenses.

Prior acts refer to the retroactive date for each lawyer insured on the policy.  This date determines coverage for alleged acts or omissions in the rendering of or failing to render legal services.

This term has been used to describe both the exposure that exists after the expiration of a policy and the coverage that may be purchased to cover that exposure. On a claims-made and reported policy, tail coverage may be purchased to extend the period for reporting covered claims beyond the policy period.