When it comes to insurance, professional liability is one of the most important coverages for attorneys. Your clients expect you to uphold a high standard of professionalism and offer them the best possible service. Even if you uphold your standards and refuse to make mistakes, you cannot predict whether you’ll make an error.
In addition to professional liability, you should have lawyers prior act coverage and here is why.
What Is Prior Acts Coverage?
Prior acts coverage is an add-on policy that helps pay for legal fees and settlement costs if a client files a lawsuit against you. The policy accounts for claims that are made where the reported event happened outside of the existing policy. Generally, the policy covers errors or accidents that occurred up to six years prior.
What Happens if You Don’t Have Prior Acts Coverage?
Without prior acts coverage, your insurance may not cover mistakes that you made over a year prior. In many cases, lawsuits are not filed right away. Your client may wait or discover an error later and the lawsuit may come out of seemingly nowhere. If you don’t have prior acts coverage, you have to pay the legal fees, court costs and any possible settlement out of pocket.
You may not be fully covered if you have professional liability coverage until you have prior acts coverage. Many policies do not take into consideration acts that occurred over a year prior.