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The mere mention of malpractice can make even the most seasoned attorney shudder. Many lawyers don’t know everything they should about their malpractice insurance, and they are afraid to ask.

Below are questions to consider when buying, renewing or changing your policies.

What is a claims-made policy?

Many lawyers continue to mistakenly think their professional liability policies are “occurrence” policies, which cover you as long as it was in effect at the time of the alleged malpractice.

But in fact virtually all professional liability polices today are “claims-made” policies, says Sally Anderson, vice president of claims for Wisconsin Lawyers Mutual Insurance Co. in Madison, Wis.

To get coverage under a claims-made policy, it must be in effect when the lawyer first gets notice of a problem and tells the insurance company about it.

This does not mean a lawyer should wait until there is a lawsuit.

A lawyer who thinks a claim potentially exists should call the carrier as soon as possible, according to Anderson. For example, if a statute of limitations deadline is missed, or a client complains about a bad result, a lawyer should call their carrier.

Unfortunately, “too many lawyers put off the phone call to their carrier for too long,” she says.

Every lawyer should know the expiration date of his or her current policy, because that is the date by which the lawyer must report any potential problems that have arisen in the policy year, says Anderson.

How long has the carrier been in my jurisdiction?

About a dozen professional liability carriers “bounce in and out of states,” says Robert W. Minto Jr., president and CEO of the Attorneys Liability Protection Society (ALPS) in Missoula, Mt.

“You may leave a longstanding carrier to go with a cheaper option, but then find that you can’t go back to the other carrier because the market has hardened and they are not writing new policies,” Minto says.

Although changing policies for a cheaper option may be tempting, that might not provide the coverage you need.

For example, you will not be covered if you don’t turn in a claim for six months, and then you change to a policy that doesn’t have “prior acts” coverage and your old policy doesn’t have “tail” coverage, he says.

What is “tail” coverage?

Tail coverage is an endorsement that essentially converts a claims-made policy into an occurrence policy, which is important any time you are changing coverage, Minto says.

“If you don’t have prior acts coverage with the new policy,” he says, “then you have to buy tail coverage.”

Retiring attorneys purchase tail coverage for the rest of their lives based on the policy in effect the year they stop practicing.

“You may not want to retire in a year that has gutted the indemnity provision and there’s nothing left,” Anderson says.

What is my maximum potential liability?

A common perception is that $1 million is the minimum coverage required for any attorney.

Minto says that isn’t always true, “particularly for older practitioners at the tail end of their practice working through probates. You may be able to reduce your coverage and save some money.”

Another way to save money is to change to a higher deductible policy.

The highest savings occur by raising your deductible from $1,000 to $5,000, or from $10,000 to $25,000, he says.

Is free work for family members excluded?

A policy exclusion to look out for relates to free legal work done for family members.

“Unless there are reasonable fees charged for services,” Minto says, “insurers don’t want to be the guarantor of your families’ estate plans or business transactions.”

Are legal malpractice counterclaims covered?

A client facing a fee-collection claim will frequently file a legal malpractice counterclaim.

Lawyers should find out whether their carriers cover malpractice counterclaims.

Also, during the application process some carriers look closely at whether lawyers have sued their clients to collect fees. Law firms that are well-managed and track their receivables are going to fare well.

Is real estate title work covered?

Lawyers who act as title agents as well as closing agents need to check if their policies cover their title work.

A rider for errors and omissions is often available for free, or it can be purchased independently.

“In the past, many companies looked the other way, but many are not doing that any longer,” Minto says.

Many title companies are also subrogating against a lawyer’s E&O policy to reduce losses, he says.

Is there any reason not to get malpractice insurance?

Very few lawyers have the liquid resources to self-insure, Minto says.

Attorneys should consider not buying malpractice insurance only if they are winding down a practice, not taking new clients, and have figured out their maximum liability and are willing to take on the risk.

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