Please see the answers to your questions below.
I know that this can be frustrating, but the extended reporting period provisions of any carrier’s lawyers professional liability insurance are an area that no insurance carrier will modify. There are many reasons that extended reporting period options are exercised and if a carrier made a concession to one firm it would need to make these concessions open to other firms with different circumstances. As such insurance carriers strictly stick to their obligations in the policy and will not deviate.
Let me know if you have further questions.
I have another avenue to question. Please bear with me as I try to get through this frustrating situation.
1. Is it possible for me to pay for extended reporting coverage, and then be able to practice a little after expiration date without affecting the coverage? Are the limitations in the free tail coverage thereby lessened?
You have the right to purchase an Extended Reporting Period Endorsement (ERP) that does not prohibit you from continuing to practice law. Please note that the Extended Reporting Period Endorsements only covers you for covered acts during the time that you had “active” coverage. It does not cover you for any acts once the policy has terminated. The costs are on the 2nd page of your declarations page, item number 10:
“ Optional Extended Reporting Periods:
12 months at 100% of the Premium shown in Item 6. of the Declarations
36 months at 150% of the Premium shown in Item 6. of the Declarations
Unlimited months at 225% of the Premium shown in Item 6. of the Declarations”
As your current premium is $2866 the cost of the reporting extension endorsement would be:
12 Months -- $2866
36 Months -- $4299
Unlimited -- $6448.50
If you wanted to cover acts after coverage termination of the AIG policy then you could purchase a policy without any past acts coverage which would go through step rating over the next 5 years.
2. If so, can I elect to do so with National Union? (By the way, where does it say that National Union is AIG? I can't seem to see that anywhere in the policy.)
I have attached the 1st page of your policy. National Union a subsidiary of AIG is the carrier listed on the declarations page.
3. If so, what would be the cost?
4. If so, can it be elected during the 60 period after policy expiration that you mentioned?
You have 60 days from the date. Please note that the additional premium must be in hands on the insurance carrier prior to the 60 day period, so realistically we need to have the premium received by us at least 1 week prior to the 60 day time period to have the premium get to the insurance carrier prior to the expiration date. If the monies are not received prior to this date, there is no grace period and the option is closed.
Here is the language from your policy that deals with this on page 14 of 17 paragraph (k):
(1) Common Extended Reporting Period Terms: An Extended Reporting Period is not cancelable. This sub-paragraph (1) shall not apply to any cancellation resulting from non-payment of premium. The rights contained in this paragraph (k) shall terminate unless written notice of election of an Extended Reporting Period together with any additional premium due is received by the Insurer no later than sixty (60) days subsequent to the effective date of the cancellation, nonrenewal or change in Firm membership.
The additional premium for any Extended Reporting Period under this paragraph (k) shall be deemed fully earned when such Extended Reporting Period commences, and in the event the Firm terminates, for any reason, such Extended Reporting Period before its expiration, the Insurer shall not be liable for the return to the Firm of any portion of the premium for the Extended Reporting Period.
The Extended Reporting Period does not extend the Policy Period or change the scope of coverage provided. The Extended Reporting Period does not reinstate or increase the Insurer’s Limit of Liability. The Limits of Liability applicable to Claims reported to the Insurer during the Extended Reporting Period shall be the same Limits of Liability that