What happens if I switch malpractice carriers?

Switching malpractice carriers can be a sound financial and strategic decision, but it requires careful planning to avoid creating gaps in coverage that could leave you exposed. The most critical issue when changing carriers involves the transition of your prior acts protection.

When you move to a new carrier, the first question to resolve is whether the new carrier will match your existing retroactive date. If your current policy has a prior acts date of January 1, 2015, and the new carrier only offers a retroactive date of January 1, 2026, you have an 11-year gap in prior acts coverage. Any claim arising from work performed during that gap period would not be covered by either the old or the new policy. To close that gap, you would need to purchase tail coverage from your departing carrier.

Before initiating a switch, review your current policy for any pending claims or circumstances that have been reported. Claims in progress typically remain with the old carrier because they were reported during that policy period. However, circumstances that you are aware of but have not yet reported present a more complex situation. If you report a potential circumstance to your old carrier before the policy expires, it may be covered under that policy even if the formal claim comes later. If you fail to report it and the new carrier's application asks about known potential claims, you may need to disclose it, and the new carrier will likely exclude it from coverage.

The application process for a new carrier is itself a critical step. Malpractice applications ask detailed questions about your claims history, practice areas, risk management procedures, and any circumstances you are aware of that could give rise to a claim. Your answers must be accurate and complete because material misrepresentations on an insurance application can void coverage entirely.

Timing the transition is important. Ensure there is no gap between the expiration of your old policy and the inception of your new one. Coverage should be bound with the new carrier effective the same day the old policy expires. Work with your broker to coordinate the transition and confirm in writing that the new carrier's retroactive date matches your existing one. Request copies of both the expiring and incoming policy declarations pages to verify the dates align.