As a general rule, attorney professional liability policies in Pennsylvania are “claims made” policies. This means a claim must be made during the policy period or the extended reporting period (ERP), if applicable, in order for there to be coverage. For the insurance company, coverage is triggered by the date the insured first became aware of the possibility of a claim and notified the insurer. The professional liability insurance policy in force on the date the insured became aware of the claim and notified the insurer is the policy that covers the claim. The policy period for a claims-made policy extends backward to a “retroactive date” before the policy was purchased. The policy will provide coverage for claims made in the present that stem from actions or events as far back as the retroactive date. Most claims-made policies are “claims-made and reported” policies, which provide coverage for losses that: (a) occur after the retroactive date and, (b) are reported during the policy period or ERP.
The difficulty for attorneys arises from the question of what constitutes a “claim.” There are significant differences among policies, but most policies define a claim as a written demand for damages. There are obvious claims, including writs of summons and complaints. However, the definition of claim is not limited to filed lawsuits or other formal demands. Most policies define claim to include written demands for damages, as well as proceedings such as arbitration, administrative (such as those brought by the U.S. Securities and Exchange Commission or the U.S. Equal Employment Opportunity Commission), regulatory, mediation and civil proceedings. Other policies make no attempt to define “claim.” The language of the attorney’s policy will govern the exact definition of a claim.
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