Law practices cease for a variety of reasons. For example, you might retire or sell your practice, merge with another practice or change your business structure from a partnership to an Incorporated Legal Practice (ILP).
If you are planning any of these changes, you should contact the Law Society of NSW or the ACT Law Society to discuss their requirements for your practice. Lawcover can then assist you with the appropriate insurance arrangements for your changed circumstances.
Where a law practice is reconstituted with little to no change except, say, to the name of the practice or its structure, Lawcover is able to transfer the PII policy and premium arrangements from the old practice to the new practice. However, there are a number of scenarios where the dissolved law practice may be entitled to a premium refund or where it is necessary for the new law practice to arrange its own PII policy.
Principal A of Law Practice 1 writes to Lawcover and includes the required Statutory Declaration, requesting that the law practice’s PII premium be reviewed.
If a premium review results in a reduction of premium, the difference between the premium paid and the revised premium due will be returned to the law practice (or premium funder if the loan has not been paid in full). The premium is revised on a pro rata basis and is subject to no claims being notified, so not all dissolved law practices will receive a premium refund.
Principal B can choose to either:
- Contact Lawcover requesting that the premium paid for the PII policy for Law Practice 2 be considered payment for Law Practice 3 and that no premium adjustments be performed for either law practice. In this case, Lawcover may transfer the PII policy in place for Law Practice 2 to Law Practice 3.
- Contact Lawcover requesting that the premium paid for the PII policy for Law Practice 2 be reviewed. In this instance, Principal C will be required to take out his or her own PII policy for Law Practice 3.
Principals D & E can choose to either:
- Contact Lawcover separately and request that the premiums paid for the PII policies for Law Practices 4 & 5 be considered payment for Law Practice 6 and that no premium adjustments be performed for either law practice.
- Contact Lawcover separately and request that the premium paid for the PII policy for each law practice (Law Practices 4 & 5) be reviewed. In this instance Principals D & E will be required to take out a new PII policy for Law Practice 6.
The principals of Law Practice 7 contact Lawcover requesting the premium paid for the PII policy be reviewed. Principals F & G will be required to take out separate PII policies for each of their new law practices.
It is important to note that the issue of whether the PII policy is transferred to the new law practice is related to but separate from the issue of whether a law practice has a prior practice. The policy definition of insured law practice includes any prior practice of the law practice, as determined by Lawcover under sections 38 and 39 of the 2019/20 PII Policy.
A successor practice will inherit the claims and premium history of any prior practice for insurance and premium rating purposes.