Why Avoid a Coverage Gap At All Costs

Why Avoid a Coverage Gap At All Costs

July 22, 2019 David Lipson

We’ve all made mistakes. We’re human and sometimes we simply forget to do something. Oftentimes, this is a minor error and the consequences are insignificant. However, sometimes in our busy, chaotic lives, we completely forget to do something important. Such in the case when an attorney mindlessly forgets to renew their professional malpractice insurance coverage.

Michigan attorneys should be careful to not allow a gap in their coverage to ever occur. Your malpractice insurance policy should continue without any gap to ensure that you remain covered for every day you practice law.

For attorneys, their biggest cost is their professional liability insurance. As any lawyer knows, a lapse in coverage is very dangerous. It is risky behavior to allow a gap in your coverage. Surprisingly, many lawyers don’t seem to fully appreciate the ramifications of allowing a coverage gap to occur. The reason one wants to maintain continuous coverage throughout a legal career is to make certain coverage is in place for all prior acts. That’s why retroactive dates are so extremely important. Any alleged malpractice that occurred prior to the retroactive date would not be a covered claim, even if the claim was made and reported during a current policy period.

The problem with allowing a coverage gap to occur is that the insurance company issuing a new policy post gap can, and often will, move the retroactive coverage date forward to align with this new policy’s inception date. The result is that coverage for all prior acts has now been lost, which is a harsh outcome, particularly for those attorneys who have been in practice for many years.

To ensure you do not have a lapse in coverage of your malpractice insurance, call the Paragon Underwriters team today at (248) 851-3066.

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