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Don’t Wait For Renewal: What Firm Changes to Report to Your Insurance Agent ASAP

All businesses evolve with time.  It is common for law firms to experience changes throughout the year. Knowing what changes can affect your liability insurance policy, and which need to be reported to your agent ASAP is important.

If you fail to promptly report changes to your insurance agent, your insurance coverage may not reflect your current business operations.  This could result in coverage gaps that could expose you to liability risks.  Reporting changes in your law firm to your agent allows the opportunity to review your coverage and help you make any necessary adjustments to ensure that you are adequately protected.  So, what changes should you report and how quickly is it necessary?

Your insurance policy may require you to report material changes to your business operations right away, such as your contact information, business name, location, or the size of your law firm.  Some changes that occur may seem futile to report to your agent mid-term, but this may not be the case, and not all changes can wait until your renewal date.

Here are some key changes you will want to ensure are promptly reported to your agent or carrier, and what makes the urgency essential to your coverage.

Updating Your Contact Information         

A priority item to report is any change in your contact information.  Your email address, phone number, and mailing address are all vital changes that you should let your agent know about.  Your agent or carrier may need to send you pertinent information regarding your policy.  If you are unable to receive certain notices, this can negatively impact your coverage.

Some notices that can affect your policy go out as early as 120 days prior to your policy renewal date.  These items may call for you to take action or make a decision regarding your coverages.  These decisions are important to weigh immediately when notice is provided, as they will impact the entire renewal process and the coverages available to renew.

Examples of early notices from the carrier can include:

  • Conditional Renewal – This notice is amending the terms of your policy.  The carrier may be capping your limits, attaching an exclusion, or reducing your coverage in another way.  You may be accepting of the terms, or you may want to shop for a more suitable policy.
  • Notice of Non-Renewal – This notice means the carrier is advising they will not be renewing your policy.  You will need to promptly contact your agent to begin seeking replacement coverage.

If your carrier needs to reach you for any reason, you don’t want to miss that communication.

Whether it’s regarding a claim, an early notice from the carrier about your policy renewal, or a financing notice, you want to make sure your agent has the most recent contact information for you.  Don’t jeopardize the protection of your law practice by allowing a lapse in communication with your agent.

Reporting Changes to Your Firm Name

As you know, legal matters require accuracy.  The legal firm name on your policy is no exception.

Many lawyers’ professional liability policies are written “on behalf of the Named Insured”, making the Named Insured listed on your policy the key to your coverage.

When your firm name or an attorney’s name within the firm changes, promptly contact your agent so that your policy is appropriately updated.

By doing this you will avoid having to dig for the exact date of the change to accurately endorse the policy at renewal.  Since your policy is written on a claims-made and reported basis, the exact date of any change matters.

Reporting Changes to Your Attorney Roster

If you hire a new attorney or an attorney leaves the firm, you will want to contact your agent about this change right away.  If you are in a state that allows Paraprofessionals, you will want to notify your agent of this hire or departure as well.

If a claim arises, and an active attorney is not listed on your policy, there may be no coverage for the work performed by this individual.

Some carriers will not backdate coverage for newly added attorneys if they are not reported and added to the policy within a certain timeframe.  This can leave your law firm exposed.

Each policy is different, so be sure to review your policy and speak with your agent about the requirements for handling attorney changes.

Hiring a Licensed Attorney to do Non-Legal Work

Hiring administrative staff does not generally apply to the “Report ASAP List”.  However, when this new employee is a licensed attorney, you will want to contact your agent. 

Some carriers will require further information when an attorney is hired in a non-lawyer capacity.  A special endorsement may also be necessary to tailor your policy to the situation.

What Can Wait Until Renewal?

Not all things need to be reported mid-term.  Generally, your application is good for the year.  So, what can wait?

Examples of items that can wait until your renewal include shifts in your areas of practice, hiring non-lawyer administrative staff, updates to risk management procedures, expansion to multiple locations (unless expanding into a different state), changes in attorney designations, updates to your logo or letterhead, and changes in revenue due to taking on new clients.

It is important to note that every policy is different, and you should always review your policy language to understand what changes must be reported immediately versus those that can wait until renewal.

Reviewing your policy and the insuring agreement is crucial to understanding what is required and the timeframe in which to report the changes.  If you're unsure whether a change should be reported immediately or not, it's always better to err on the side of caution and report changes to your agent. 

Wrapping Up

Don’t allow a lapse in communication to jeopardize the protection of your law practice.  Keep in touch with your agent throughout the year to ensure your professional liability insurance policy is accurate for the evolutions occurring in your law firm.  A continuously updated policy will save you time at renewal and will protect your law firm from any loss of coverage that can occur from an outdated policy.