Wednesday, May 7, 2014
In part 6 of the ABA Journal's series on retirement issues, retiring lawyers are reminded that one important option is to purchase "extended reporting endorsements" (ERE) or "tail coverage" for existing professional liability insurance policies. Such an endorsement permits a longer period to report claims for coverage. Mark Bassingthwaighte, an attorney and risk manager for Attorneys Liability Protection Society (ALPS) explains, "Tail coverage ... [is] not a new policy." Rather, the existing policy explains the terms of any ERE coverage option, with the cost set as a fixed percentage of the expiring policy's premium.
"'I recommend that the retiring partner talk with other partners and request to be kept in the loop within the applicable state statute of limitations for malpractice should the firm dissolve; even formalize an agreement that works best to protect all parties involved,' says Matt Lubaroff, ALPS director of client services. 'The firm's ERE can only be purchased at the time of dissolution, and for certain firms the best answer would be upon the first retirement.'"
Additional planning topics for retiring lawyers appear in "Retirement Reset" by Susan Berson in the May issue of the ABA Journal.