We often find that even lawyers who've been at it for a long time are confused about how claims made insurance policies work. It is essential, however, for the health of your practice to understand your claims made policy and how retroactive dates work.

1. UNDERSTANDING
“CLAIMS MADE”
LIABILITY INSURANCE
What every attorney needs to know

2. Key Terms
 Claims Made
 Occurrence
Coverage
 Retroactive Date
Nielsen & Geenty www.CaliforniaLegalInsurance.com

3. Claims Made vs. Occurrence
Examples
Most auto or homeowners
insurance is “occurrence”
coverage, so the policy covers
you when you have an accident
during the policy period.
Legal Liability is almost always
“claims made” coverage, so you
are covered for past acts where
the claim for damages happens
during the policy period,
regardless of when the act itself
happened.
Occurence:
 Covers event that
occurs during policy
period
Claims Made:
 Covers past work
where claim is made
during policy period.
Nielsen & Geenty www.CaliforniaLegalInsurance.com

4. Retroactive Date Definition
Retroactive Date, n. How far back your
coverage extends.
 Goes back to the original retroactive date on
your original policy if you maintain continuous
coverage.
 Can reset if you let coverage lapse.
 May be expensive, sometimes impossible, to
re-establish original retroactive date if it
resets.
Nielsen & Geenty www.CaliforniaLegalInsurance.com

5. Retroactive Date Example
 Policy Date: 1 January to 31 December 2013.
 Retroactive Date: 2 March 1991 (when you
bought your original policy).
 Scenario 1: Claim made on 2 March 2013 alleging
error made on contract from 13 April 2002.
Covered!
 Scenario 2: Claim made on 2 March 2013 alleging
error on contract from 3 February 1991. Not
covered!
Nielsen & Geenty www.CaliforniaLegalInsurance.com

6. Avoid these mistakes to make sure you don’t find yourself
without coverage.
Making Sure You’re Covered
Nielsen & Geenty www.CaliforniaLegalInsurance.com

7. Notifying Your Carrier
A claims made policy requires you to notify your
carrier of a claim “as soon as practicable”
 When in doubt, notify. Fear of a premium
hike prevents some people from notifying their
carrier until it’s too late. You could be denied
coverage for this.
 Be prompt. If you wait and it turns out that
you knew of a possible claim, but didn’t
mention it at the time of policy renewal, it may
not be covered by your current policy.
Nielsen & Geenty www.CaliforniaLegalInsurance.com

8. What Constitutes a Claim?
 No need to notify: A client
calls and says, “I’m a little
disappointed by the outcome,
but I guess that’s life.”
 Best to notify: A client calls
and says, “If you had filed the
motion on time, I wouldn’t be in
this situation. You’ll be hearing
from my lawyer.”
 Judgment Call: A client calls and
says, “It’s your fault we lost. If you
had handled my case correctly, I’d
be retired to the tropics right now!”
Nielsen & Geenty www.CaliforniaLegalInsurance.com

9. Who Decides?
Ultimately, the court
decides. If the claimant
says you were notified on
April 2 and the court
agrees, your carrier can
argue that you did not
notify in a timely manner
and you could be
uncovered!
Nielsen & Geenty www.CaliforniaLegalInsurance.com

10. FIND OUT MORE AT
http://californialegalinsurance.com
Nielsen & Geenty Insurance
Services, Cedar Ridge, CA.