Walker & Company
Retirement Tail Coverage for Attorneys: What to Know Before You Hang It Up
When an attorney retires or winds down a practice, there’s a big question that doesn’t get talked about enough:
What happens if a malpractice claim comes in after you stop practicing?
Because almost all malpractice policies are written on a claims-made basis, the policy only responds if the claim is made while your coverage is active. If you drop coverage when you retire, anything that pops up afterward could be uninsured. That’s why tail coverage (also called an Extended Reporting Period, or ERP) exists. It keeps the door open to report claims on past work, even after the policy ends.
Tail vs. Prior Acts — A Quick Difference
Many attorneys mix these up:
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Prior acts coverage applies when you keep practicing and move to a new policy or carrier. It protects your past work.
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Tail coverage applies when you stop practicing and need protection for future claims related to past services.
If you are leaving a firm but continuing to practice, you likely need prior acts. If you are truly retiring, tail is the key issue.
The Free Retirement Tail Benefit
Here’s the good news: many admitted carriers offer a free retirement tail if a few conditions are met:
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You are permanently retiring from the practice of law
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You have been insured with that carrier for at least three consecutive years
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You are not retiring due to disciplinary or licensing issues
This is the ideal scenario. You’ve earned it, and it protects your entire career without a major expense.
There is one very important detail: carriers expect that you will stop practicing law entirely. Even occasional part-time or of-counsel work may disqualify the free tail.
When Retirement Tail Isn’t Free
If those requirements aren’t met — for example, recent carrier changes or continued part-time practice — the tail becomes an out-of-pocket cost. And it can be significant.
Most carriers charge 200% to 350% of your final annual premium, paid up front. A $5,000 policy could easily mean a $10,000–$17,500 tail bill.
For solos closing down a practice, that can be difficult if it wasn’t planned for.
How Scenarios Differ
Every retirement situation doesn’t look the same, and neither does the coverage:
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Solo attorney fully retiring
If you qualify for the free tail, great. If not, you’ll likely need to purchase it yourself. -
Attorney retiring from a firm that will continue operating
Sometimes the firm’s policy keeps your prior acts in place, so you may already be protected. But this needs to be confirmed. -
Partnership dissolving or firm shutting down
Someone needs to purchase firm-level runoff coverage to protect all past work. This is often one of the biggest expenses a closing firm will face. -
Retiring but staying on in any capacity
Even limited legal services usually mean you are not considered “retired,” which means the free tail likely isn’t available.
Plan for This Early
Tail coverage can be a smooth, no-cost benefit — or it can be a major expense. The difference often comes down to timing and good planning:
Understand your eligibility for the free retirement tail
Avoid last-minute carrier changes before retirement
Make sure prior acts are preserved if you are leaving a firm
Don’t assume someone else is covering your past work
If you are within a few years of retirement or a firm transition, a quick review of your coverage can save you a lot of money and stress later.