Planning a Career Change or Retirement

The Covid crisis has had a big impact on our society. Lawyers are “retiring” at record levels. Other lawyers are making a decision to change their lifestyle in other ways. You may be one of these people. Instead of the private practice of law, perhaps you are thinking of working for a business, a charitable organization, or the government?

Since all Lawyer Professional Liability (LPL) policies are on a “Claims Made” format, Extended Reporting Coverage, also known as “TAIL” coverage is an important consideration if you are planning to retire or shift your career path in the near future. Most LPL policies provide the ability of the retiring lawyer to purchase adequate “TAIL” coverage. However, “TAIL” coverage is EXPENSIVE!

For a solo practice, the ability to obtain “TAIL” coverage at no additional premium is an important consideration. However, in order to maximize this benefit, some planning is required.

In order to qualify for the “TAIL” coverage at no cost, there are certain conditions built into the policy. A typical restriction is that the Company will require the insured lawyer to have been insured by the same Company for (3) consecutive years before the attorney qualifies for NO COST TAIL. The length of time varies, so it is important that you review your policy or you can contact Kaestner & Berry to determine the length of the waiting period your policy requires you to be insured by the same company in order for you to qualify. In addition, there may be other restrictions in your policy on your ability to qualify for this free benefit. For example, some policies require the attorney to be at least 55 years of age. This restriction is obviously attempting to limit the no cost tail to lawyers that are actually retiring.

There are malpractice policies that make it easier to qualify for NO COST TAIL. For example, many policies do not have an age requirement to qualify. In addition, the granting language for the attorney to qualify for the NO COST TAIL coverage is typically, “retired or otherwise ceased the private practice of law.”

If you are thinking about applying to be a Judge, taking an in house legal position, taking a government position, or otherwise leaving the private practice of law, you will want to plan in order to avoid the need to purchase a costly tail endorsement.  The good news is that you may be able to qualify for this important benefit at NO COST! However, it does take planning.

For all firms, but especially for a solo practice, it is important to plan for this benefit.

Kaestner & Berry is always available to assist you with this planning. Contact your agent if you are interested in maximizing your insurance coverage.