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Legal Malpractice Insurance: Understanding Retroactive Dates and Claims Made - YouTube
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Hi, this is Nielsen and Geenty Insurance with a brief video on understanding claims made on
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liability insurance.
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We are a boutique insurance brokerage in California
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specializing in legal malpractice insurance
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and we find that a lot of our attorney
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clients don't necessarily understand some of the ins-and-outs of claims made with
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insurance and particularly the whole idea of the retroactive date,
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so we're just going to give you a quick overview of claims made
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verses occurrence coverage
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and some ins-and-outs with the retroactive date.
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I think it's pretty obvious to most people
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that occurrence
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coverage covers an event that happens during the policy period, so that's like
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your auto insurance that covers you for an accident that takes place
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during the period you're currently paying for.
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So in other words you have a policy that covers 2013 and
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it covers accidents that take place in 2013.
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Claims-made-insurance covers you for claims that are made during the period.
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So you have a policy for 2013.
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It covers you for a claim made against you in 2013
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even if the actual accident, (in this case)
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the error or
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omission or
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legal act
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took place at some prior time.
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But as long as the claim is made in 2013 you're covered by your
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2013 policy.
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That’s pretty obvious but I think people get tripped up a little bit on the
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retroactive date.
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The retroactive date is how far back your coverage extends.
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You don't have coverage that goes back infinitely.
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Typically it goes back to the date that you first established your very first policy
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and that's important.
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You have to maintain
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continuous coverage for that to be true.
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So if you started practicing on January 1, 2000
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any act that you cover from there on out is covered as long as you renew your
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policy regularly and you never let it lap.
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If you let your policy laps then
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your retroactive date is going to reset.
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It’s probably going to be impossible
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(except under very specific conditions)
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it’s going to be impossible to reset your retroactive date.
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Sometimes if you
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only let your policy lap for a very short time or something like that you
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might be able to get your retroactive date back but generally speaking
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it’s very, very dangerous to let that laps, so it's
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real important
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like for example if you are going to go on sabbatical for a year
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that you keep
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your coverage current
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even though you're not practicing law for a year because if you don't you’ll lose
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that retroactive date.
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So, just as an example let's say you've got a policy that's for the year
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2013
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you have your
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first policy ever on
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two March 1991
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you get a claim for something to happen in 2002 no problem you're
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covered
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but let's say he did something like
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when you're setting up your practice
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you didn't
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have the money you thought to get
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insurance
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so you practiced for a few months before you ironed out the malpractice insurance.
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A claim comes in for three February 1991,
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a month before your first policy,
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boom you're not covered.
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So you just have to understand
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that with retroactive dates that it
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only goes back to your date that you first obtained a legal malpractice
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Policy.
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So you want to make sure you're covered. There
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are some mistakes people can make. To
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let their coverage lap
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or to lose coverage. One is letting your coverage lap, as we
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discussed, the other one is not notifying your carrier as soon as
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practicable. That's usually what the
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rough languages is in the policy.
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As a general when in doubt you should notify your carrier.
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Some people fear that the premium will rise
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if they notify the carrier but
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if you wait, if
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you don't notify the carrier in timely manner and then you have to notify the
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carrier because the case does come to court
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you could be denied coverage because you didn't meet that term of the
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policy. So you always want to be prompt
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and
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error on the safe side if you think there's any chance of a suit.
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Now, what constitutes a claim:
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If a client just says I’m a little disappointed but you know that's life.
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Clearly that's not a claim no insurer expects you to notify for that.
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If the client says “If you had filed the motion on time I wouldn't be in this
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situation. You'll be hearing from a lawyer”.
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You’ve got to get on the phone right away
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contact your insurer.
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Some cases it's a judgment call a client calls and says “You know it’s your fault we lost.
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If you had handled this correctly I’d be retired in the tropics right now.”
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In a case like that
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you have to use your judgment but
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the one thing you have to remember is that ultimately you are not the one
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who's going to decide whether or not a claim was made.
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Ultimately that case is going to go to court
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or if it does go to court it is
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going to be the court that's going to decide
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the date you are notified on. And if
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the plaintiff
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and the court agree
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your carrier can argue that you did not notify in a timely manner
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you might not be covered especially if you’ve changed carriers and there's a debate
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over which carrier should really be legally on the hook for the claim.
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So that's the other reason that you really want to notify
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as soon as practicable
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in order to best protect yourself.
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So, I know that's a
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very brief overview. We have a lot more detail on our website. We have a lot
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of blog posts on the subject and of course we are always willing to
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talk to people about it. We've been in business for decades and
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we're happy to discuss
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the ins-and-outs of any insurance policy with you
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and
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you can find all of our contact info
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on our website at California legal insurance dot com and that’s
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Californialegalinsurance.com Thanks, this has been video from Nielsen & Geenty Insurance.
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