This article is about how your insurance responds to a claim — it isn’t legal advice about defending one. For that, your carrier will appoint defense counsel, which is much of the point.
Most of what’s written about malpractice insurance — including most of this library — is about buying it well. This one is about the day it matters: a demand letter, a draft petition, or an angry email that uses the word “negligence” has just landed. What you do in the first two weeks determines whether the policy you’ve paid for all these years actually performs.
The short answer
Report it to your carrier immediately, in writing — before you respond to anyone, before you try to fix anything, and before you decide it isn’t really a “claim.” A claims-made policy is a reporting instrument: coverage turns on when the carrier hears about the claim, and late notice is one of the few mistakes that can void an otherwise valid claim entirely. The definition of “claim” is broader than a lawsuit — a written demand for money or services usually qualifies, and so can a client’s email demanding you make something right. When in doubt, report. Then: don’t admit fault, don’t offer to redo the work or discount the fee without the carrier’s involvement, preserve the file exactly as it stands, and let appointed counsel — who defends lawyers for a living — do what you would tell your own clients to let a specialist do.
Why “report first” is the whole game
A claims-made policy covers claims first made against you and reported to the carrier during the policy period. That second clause is the trap. Sit on a demand letter until after renewal — or worse, until after you’ve switched carriers — and you can create a gap in which no policy responds: the old one because the claim wasn’t reported in its period, the new one because the claim was first made before its inception. This is the same mechanism that makes retroactive dates unforgiving, operating on a faster clock.
Policies also let you report a potential claim — a circumstance you reasonably believe could become one. Reporting a circumstance locks coverage to the current policy period, whatever happens later. If a matter went wrong and your stomach knows it, that instinct is reportable.
The instinct that costs lawyers their coverage
The most dangerous impulse after a mistake is the professional one: fix it. Quietly redo the filing, offer to waive the fee, tell the client you’ll make it right. Two problems. First, statements of fault can be used against you later — and most policies require you not to admit liability or incur expense without the carrier’s consent. Second, voluntary payments and repair work done without consent are typically excluded — you can spend real money fixing a problem and find you’ve both waived coverage and failed to fix it.
The discipline is unnatural for good lawyers, which is exactly why it has to be a procedure rather than a judgment call: acknowledge receipt, commit to nothing, report the same day.
What happens after you report
Reporting is not an admission that you did anything wrong, and it doesn’t by itself raise your premium the way lawyers fear. The carrier assigns a claims professional, appoints defense counsel experienced in lawyer-discipline and malpractice work (paid by the policy, subject to how defense costs sit against your limits), and takes over the negotiating posture you’re too close to hold. Whether the carrier can settle without your agreement depends on your policy’s consent-to-settle clause — a term worth having read before the year you need it.
Two housekeeping points that pay off later: keep the file frozen — no annotating, no “clarifying” memos to the file after the fact — and route every client communication about the disputed matter through defense counsel once appointed.
The week-by-week shape
- Day one: written notice to the carrier (and your broker), per the policy’s notice provision. Acknowledge the claimant’s communication without substance if a response can’t wait.
- First week: claims professional assigned; coverage position issued or reserved; defense counsel appointed. Gather the complete matter file — unaltered.
- Second week onward: defense counsel runs the response. Your job narrows to candor with your own defense team and staying out of direct negotiation.
A specialist broker earns their keep here too: we’ve walked firms through first claims for decades, and the call to us is often easier to make first. If a demand letter is sitting on your desk right now, call us today — (512) 717-6190 — and we’ll help you report it correctly before the clock does damage.
FAQ
What counts as a “claim” under a malpractice policy?
Typically any written demand for money or services arising from professional services — a lawsuit, a demand letter, sometimes a client email demanding remediation. The definition is in the policy; when a communication arguably qualifies, report it.
When must a malpractice claim be reported?
As soon as practicable within the policy period in which the claim is first made. Late reporting — especially past the policy period — is one of the few errors that can void coverage for an otherwise covered claim.
Should a lawyer try to fix the underlying mistake first?
Not without the carrier. Admissions of fault and voluntary repair work or payments made without carrier consent are typically excluded and can waive coverage.
Does reporting a claim raise malpractice premiums?
Reporting a circumstance or claim is not the same as a paid loss. Claim history is one underwriting factor among several, but failing to report on time risks the entire recovery — the trade is never close.
Companions: Claims-made vs. occurrence · Prior acts & the retroactive date · How to read a quote
In insurance since 1975. Founder of The Beck Company; former executive at Aon and Willis; teaches insurance at the University of Texas School of Law; board-certified in insurance forensics — five decades placing coverage for legal professionals.
