How do law firms handle insurance when converting from solo to partnership?

Converting from a solo practice to a partnership or multi-attorney firm is a significant transition that affects every line of insurance coverage. The most critical step is properly transitioning your malpractice coverage to avoid gaps in protection for work performed under the solo practice and work going forward under the new firm.

Contact your malpractice carrier well before the conversion date. The carrier will need to restructure your policy from an individual policy to a firm policy that lists the new entity and all attorneys as insureds. Your existing retroactive date should carry forward to the new firm policy, preserving prior acts coverage for your solo practice work. Each incoming attorney needs their retroactive date established on the new policy, either matching their prior coverage or set at the date they join the firm.

If an incoming attorney had their own malpractice policy as a solo practitioner, they may need to purchase tail coverage from their expiring individual policy unless the new firm's policy provides prior acts coverage dating back to their individual policy's retroactive date. Coordinate this carefully to avoid gaps where neither policy would respond to claims from the transition period.

All other insurance lines need to be updated for the new entity. Register the new firm name on your business owners policy, general liability, and any other coverages. Increase property coverage limits to account for additional equipment and furnishings. Add workers compensation if you are hiring employees as part of the expansion. Consider employment practices liability if you will have staff. Update your cyber liability policy to reflect the larger firm's data volume and number of users. The partnership agreement should specify how insurance costs are shared among partners and what minimum coverage levels the firm must maintain.