With Crum & Forster (C&F) dropping its small firm Lawyer s Professional Liability Insurance what happens to the “Free” Retirement Tail?
1. If C&F has issued the non-practicing extended reporting period endorsement (ERP) attached to your policy, then you have nothing to worry about. C&F continues in business as an insurance company and will meet its obligations under the terms of your policy.
2. If you renew with ISME, there should not be an issue. Where available ISME has stated that they will honor time spent with C&F for the purposes of determining if you quality for a non-practicing ERP.
3. C&F’s obligation to you ends when the coverage terminates. Keep this is mind if you switch to a different insurer.
L Squared Insurance can help you with this planning. Depending on your timeframe for retirement they may have other insurers that will offer a non-practicing ERP after one year with a new insurer.
Otherwise, most attorney malpractice insurers provide an ERP if you are with them when you stop practicing for an additional premium. The cost for doing so is between 2.5 to 3.5 times the inforce premium at the time you cancel or do not renew the coverage your attorney malpractice insurance policy.
But remember the time to make the decision as to whether you renewal with ISME is before renewal not after. Once you renew with a different insurer your rights to the ERP from C&F end.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080