Lawyers Professional Liability Excess Insurance Coverage
A Commercial Umbrella Insurance policy will not increase liability limits for attorney malpractice exposures. Commercial or Personal Umbrella Insurance policies specifically excludes coverage for work done by an attorney.
Do not purchase another primary attorney malpractice policy for the needed additional limits. Attorney malpractice insurance insurers will not knowingly issue another primary insurance policy for a firm that already has attorney malpractice insurance policy in place. With two primary insurance policies in force, the other insurance clause that deals with multiple primary policies addressing the same claim comes into play. Two primary attorney malpractice insurance policies that address the same claim may not “play nice” together. With no standard language expect unexpected claim handling and the claim settlements nightmares. The claims handling and settlements depend on how each policy addresses a claim based on the other insurance clause.
Where umbrella insurance policies may broaden coverage, this is rarely the case with excess liability insurance.
An excess liability policy by policy language goes on top of the primarily limits. It is possible to have multiple excess policies each one stacked upon the other policy(s). Following Form Excess Professional Liability Insurance Policy language is generally preferred. It basically states that it is incorporating the policy language of the primary policy as the basis for addressing covered claims. The Excess Policy has a policy retention limit or deductible limit that is equal to the underlying policy limits. The two (or more) professional liability insurance policies work together to provide coverage with the Excess Policy specifically referencing the Primary Policy. Beware of endorsements that may change or exclude coverage. In a perfect world you also want the effective, expiration and prior acts dates to match the underlying policy.
An Excess Liability Policy may not be “following form.” Thoroughly read a non-following form excess policy. Make sure that the policy does not exclude the required coverage. These excess policies may have different claim triggers or definitions as to what is a claim. For certain situations, a non-following form policy may meet your insurance needs.
It is important to report claims to all insurers on the risk. Even if the claim does not look like one that will pierce the underlying policy limits, put the excess insurer(s) on notice. With all claims-made coverage if the claim spans multiple years, the policies that will address the claim are the policies in force when the claim was made and reported. The excess insurer normally stands by and only gets involved with the claim if it looks like the claim will exhaust the primary policy limits. Not reporting the claim to the excess insurer(s) on a timely basis could cause a claim denial at a later time.
L Squared Insurance Agency has access to admitted and non-admitted excess insurance coverage to meet your law firms specific needs.
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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
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
