Sixth Circuit Affirms No Coverage For Legal Malpractice Claim Under Two Professional Liability Policies

The United States Court of Appeals for the Sixth Circuit, applying Michigan law, has held that a law firm’s professional liability insurance policy afforded no coverage for an underlying legal malpractice suit where a notice of circumstances that could give rise to a potential Claim was given during an Extended Reporting Period, but a Claim was not made until after that period had expired. Bridges v. Maxum Indem. Co., 2026 WL 1862299 (6th Cir. June 29, 2026). The court further held that coverage was not available under a second professional liability policy in place when the Claim was made because a Retroactive Date Exclusion in that policy applied.

The insured law firm represented a client in a medical malpractice action in Alaska. Judgment was entered against the client in 2018 after her attorneys failed to respond to summary judgment motions. The trial court reopened the case in 2019, but the Alaska Supreme Court subsequently reinstated the judgment against the client in 2022. The law firm notified two of its professional liability insurers of a potential claim in 2020. The client filed a legal malpractice action in 2022, and the law firm notified its insurers.

The first insurer had a 2018-2019 Policy Period, but the insured purchased an Extended Reporting Period, which provided two additional years during which the insured could report Claims for Wrongful Acts committed during the Policy Period. The second insurer had a Policy Period that encompassed the date on which the legal malpractice action was filed. However, it contained a Retroactive Date Exclusion, which barred coverage for any Claim “based upon, arising out of, directly or indirectly resulting from, or in any way involving any Wrongful Act prior to the Retroactive Date” of May 2, 2019. Coverage litigation followed in the United States District Court for the Eastern District of Michigan, which granted the insurers’ motions to dismiss.

The Sixth Circuit affirmed. The court held that notice was untimely under the first insurer’s policy. The court reasoned that the first insurer’s Extended Reporting Period applied only to Claims and did not expressly address notices of circumstances. Conversely, the first insurer’s policy provision regarding notices of circumstances that could give rise to a Claim only referred to giving such notice during the Policy Period and not during the Extended Reporting Period. The insured gave notice of circumstances during the Extended Reporting Period, but a Claim was not made until the Extended Reporting Period expired. The court therefore concluded that notice was late and coverage was unavailable. The court then determined that the second insurer’s Retroactive Date Exclusion barred coverage for the legal malpractice action. The Wrongful Act giving rise to the legal malpractice action was alleged to have occurred in 2018 when the lawyer failed to respond to a summary judgment motion in the medical malpractice action. Because this act occurred before May 2, 2019, the Retroactive Date Exclusion applied.