Attorney Switched Practice to all Criminal Work but Malpractice Premium Stayed the Same?
Attorney asks:
Why did my attorney malpractice premium not go down at renewal? I decided to switch my practice area to all lower risk criminal work, but the renewal application only wants to know the past not the future. I told the insurer that I changed my practice areas anyway. I want a lower rate this year.
Response:
The attorney malpractice insurance renewal application is meant to capture work on a retrospective basis. The attorney malpractice renewal claims-made malpractice policy not only covers acts that occur in the current year but covered acts that occurred in the past. With an occurrence policy form, changing the areas of practice in the current year impacts the premium. With an occurrence policy form the current insurer is responsible for claims occurring during the time the insurer is covering the risk. But in the USA all attorney malpractice policies written are on a claims-made policy form.
Given the retrospective nature of the claims-made malpractice coverage, rating the firm for what it has done in the past, not what the firm plans to do more accurately reflects the exposure. Obviously, it is frustrating for an attorney that is expecting an immediate change in the premium.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
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Lee@L2Ins.com
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