Prior Acts Coverage and Why It Matters for Lawyers

Your professional liability policy starts today. But what happens to legal work you completed last year—or five years ago? That’s why prior acts coverage matters.

Working with Ohio lawyers at every stage of their careers, questions come up about prior work during periods of change. An attorney moves to a new firm. A law firm changes professional liability insurance carriers. A lateral hire brings years of previous legal experience. In each situation, understanding how a current policy addresses work performed in the past is an important part of maintaining continuity of professional liability coverage.

Prior acts coverage can help address that issue, but the term is sometimes confused with tail coverage or treated as if it automatically applies to every piece of legal work an attorney has performed.

It doesn’t. Here’s what Ohio lawyers should understand about prior acts coverage, retroactive dates, and how previous legal work may be addressed under a current professional liability policy.

What Is Prior Acts Coverage?

Prior acts coverage generally provides coverage under a current claims-made-and-reported professional liability policy for covered claims arising from acts, errors, or omissions that occurred before the current policy’s effective date, subject to the policy’s prior acts date, terms, conditions, exclusions, and other requirements.

The American Bar Association describes prior acts coverage as coverage for claims arising from acts, errors, or omissions occurring before the policy’s inception. Some policies may provide full prior acts coverage, while others establish a retroactive date that determines how far back the coverage reaches.

Under our prior acts coverage, an act, error, or omission occurring before the current policy’s effective date may be covered when applicable requirements are satisfied, including that the insured had no prior knowledge of the claim and had claims-made-and-reported insurance in effect when the underlying act occurred. Lawyers applying for coverage may request an applicable retroactive date. Coverage ultimately depends on how underwriting evaluates the circumstances involved.

Why Prior Acts Coverage Matters

Professional liability claims don’t necessarily arise while the underlying legal work is being performed.

An attorney may complete an engagement without any indication that a client is dissatisfied or that an error was made during the representation. An allegation of an error involving that representation could surface later, potentially after the attorney has renewed coverage, changed insurance carriers, or moved to another firm.

The structure of a claims-made-and-reported policy becomes especially important. Unlike an occurrence-based policy, which generally focuses on when the underlying event occurred, claims-made-and-reported professional liability coverage generally requires a claim to be made and reported during the applicable policy period, subject to the policy’s requirements.

Prior acts coverage can help create continuity between the work performed in the past and the policy in effect when a claim is later made.

What Is a Prior Acts Date?

When reviewing prior acts coverage, one of the most important details to identify is your prior acts date, sometimes referred to as a retroactive date. This date establishes how far back the policy may provide coverage for otherwise eligible prior professional services.

For example, suppose an attorney’s current policy begins January 1, 2027, but has a prior acts date of January 1, 2022. Subject to all other policy requirements, a claim made during the current policy period arising from covered legal work performed after January 1, 2022, may fall within the policy’s prior acts period.

Work performed before the applicable prior acts date generally would not. The ABA recommends looking for the retroactive date on the declarations page or an attached endorsement when reviewing professional liability coverage.

Prior Acts Coverage When Changing Insurance Carriers

Changing professional liability insurers is one of the most important times to review prior acts coverage.

A new policy’s effective date doesn’t necessarily exclude coverage for new claims arising from prior legal work. Depending on the policy and underwriting, prior acts coverage may be available for work performed before the new carrier began insuring the firm. Before changing carriers, attorneys should review:

• The prior acts date under the terminating policy
• The proposed prior acts date under the new policy
• Any gaps in professional liability coverage
• Known claims, potential claims, or circumstances that may need to be reported
• Work performed by current and former attorneys
• Applicable exclusions or endorsements

Don’t assume two policies with similar limits provide the same continuity for past work. Our Lawyers Professional Liability Insurance offers broad prior acts protection when available, including coverage options for lateral-hired attorneys, subject to eligibility, underwriting, and policy terms.

Prior Acts Coverage When Changing Law Firms

Prior acts coverage can also become important when an attorney moves from one firm to another. Suppose you spent several years representing clients at Firm A and then join Firm B. A malpractice allegation later arises from work you performed while at Firm A.

Which policy responds?

There isn’t one universal answer. Coverage can depend on whether Firm A remains insured, how its policy treats former attorneys, how Firm B’s policy defines covered professional services, whether career or prior acts coverage applies, and other policy provisions.

The ABA distinguishes between ordinary prior acts coverage and career coverage. Career coverage may address work performed at other firms earlier in an attorney’s career, while some law firm policies limit prior acts coverage to work performed for or on behalf of the insured firm.

We’ve found that this distinction is particularly important for lateral attorneys. Before changing firms, ask both the former and new firm how professional liability coverage applies to your previous work.

What Happens If You Have a Gap in Coverage?

Prior acts coverage should not be viewed as a way to retroactively insure periods when an attorney practiced without professional liability insurance. Prior acts coverage is subject to qualifications, including that the person or entity was insured on a claims-made-and-reported basis when the underlying act, error, or omission occurred.

A period of uninsured practice can therefore create a significant continuity issue. When changing carriers or firms, it’s important to coordinate effective dates and understand exactly how previous work will be treated. Don’t assume a new policy automatically repairs an earlier gap.

Prior Acts Coverage vs. Tail Coverage

Prior acts coverage and tail coverage both relate to legal work performed in the past, but they operate differently.

Prior acts coverage looks backward from a current policy. It may allow the current policy to respond to covered claims involving eligible work performed before that policy began.

Tail coverage looks forward from a policy that is ending. Formally known as an extended reporting endorsement, it extends the period during which certain covered claims involving earlier legal work can be reported after the underlying policy terminates.

If you’re moving to a new firm or changing carriers, prior acts coverage under the new policy may be part of the continuity discussion. If you’re retiring or closing a practice without obtaining replacement professional liability coverage, an extended reporting endorsement may instead need to be considered.

We’ve covered this topic in greater detail in OBLIC’s guide to tail coverage. OBLIC offers extended reporting periods of one, two, three, or unlimited years, subject to applicable policy terms and underwriting.

What to Consider About Prior Acts Coverage

You don’t need to become an insurance professional to understand your policy, but you should know what questions to ask. When purchasing, renewing, or changing professional liability coverage, consider:

• What is my prior acts date?
• Does the date apply to the entire firm or individual attorneys?
• Does the policy cover work performed at a previous firm?
• How does the policy address newly hired lateral attorneys?
• Have I maintained continuous claims-made-and-reported coverage?
• Are there exclusions that affect prior work?
• Are there known claims or circumstances I need to report before changing policies?
• How will coverage apply if an attorney leaves the firm?
• Would tail coverage be necessary in addition to, or instead of, prior acts coverage?

Keep copies of previous declarations pages, policies, endorsements, and applications. Historical coverage documents can become useful when determining which policy may apply to a claim involving older legal work.

Why Ohio Lawyers Work With OBLIC

Professional liability insurance involves more than choosing a limit and paying a premium. Lawyers need to understand how their coverage follows the evolution of their practice.

For nearly 50 years, OBLIC has focused exclusively on Ohio lawyers and law firms. That experience allows our team to work with attorneys through practice changes ranging from lateral hires and firm growth to carrier transitions, mergers, succession planning, and retirement.

OBLIC’s professional liability coverage includes broad prior acts protection when available, including for lateral-hired attorneys, along with flexible extended reporting period options and other coverage features subject to eligibility, underwriting, and policy terms.

Our goal is also to help attorneys understand their coverage before questions arise. Policyholders have access to practical risk-management resources and OBLIC’s Loss Prevention & Ethics Hotline as part of that ongoing support.

Still have questions about prior acts coverage?

OBLIC has focused exclusively on serving Ohio lawyers and law firms for nearly 50 years. If you’re changing carriers, adding a lateral attorney, restructuring your firm, or simply reviewing your current professional liability coverage, our team is available to help you understand your options.

The information contained above is intended to provide general information only, is not legal advice, and does not constitute an offer, quotation, binder, or insurance contract. Coverage, eligibility, limits, premiums, and other policy terms are subject to underwriting and may vary based on the applicant and the policy issued. All coverage is subject to the applicable policy’s terms, conditions, limitations, exclusions, and endorsements and is determined at the time a claim is reported. In the event of any difference between this content and the policy, the policy controls.