What insurance is needed when adding a new partner to a law firm?

Bringing a new partner into your firm creates insurance obligations that extend beyond simply adding a name to the policy. Start by notifying your malpractice carrier of the new partner, including their practice areas, years of experience, and complete claims history. The carrier will evaluate how the new partner's risk profile affects your overall premium and may require a mid-term endorsement or adjustment.

The most critical issue is prior acts coverage for the incoming partner's previous work. If the partner is joining from another firm, determine whether their prior firm's policy will continue to cover claims arising from work performed there, or whether you need your policy to extend prior acts coverage to the new partner. In many cases, the departing firm's policy covers the partner's prior work through its own tail coverage or continuing policy. However, if the incoming partner was a solo practitioner, they may need to purchase tail coverage from their expiring policy before joining your firm.

Review whether your current policy limits remain adequate with the addition of a new partner. More attorneys generating more client work increases the aggregate exposure. If the new partner brings a high-risk practice area that your firm did not previously handle, expect a premium adjustment and consider whether your limits should increase accordingly.

Update your employment practices liability, directors and officers coverage, and any key person insurance arrangements to reflect the new partnership structure. If the new partner has an ownership stake, your D&O policy should list them as an insured. Review your partnership agreement to confirm that insurance requirements, including minimum coverage levels and cost-sharing arrangements, are clearly documented.