Short Answer
When E&O insurance and a partner leaving intersect, there are two separate exposures to address: work already performed and work everyone performs going forward. Those shouldn't be treated as the same question. The existing firm's policy may continue if the company keeps operating, but the carrier still needs to know about the ownership change, and the departing partner's historical work needs its own review.
What happens to the existing firm's policy
If the firm continues operating after a partner leaves, its professional liability policy may also continue. The carrier should still be notified about the ownership change. Your broker may need to share who is leaving, the effective date, the new ownership percentages, whether the departing partner will keep practicing, whether they're taking any projects with them, and whether the firm's legal entity or name is also changing.
What happens to projects the departing partner worked on
This is where the actual policy wording matters most. A professional liability policy may define certain current and former partners, members, officers, or employees as insureds for professional services performed on behalf of the firm. That means simply removing someone's ownership interest doesn't automatically answer whether they still have protection for work performed while they were there. The policy language needs to be reviewed directly, since this varies by carrier and form.
What if the departing partner starts another firm
That's a different exposure entirely. If the departing partner opens a new architecture or engineering practice, the new firm generally needs its own professional liability insurance for its new work. Don't assume the new firm's policy covers projects the architect worked on at their former company. Historical work performed at the previous firm should be addressed separately, through the prior firm's policy or another arrangement intended to respond to it.
Why this should be addressed before the partner leaves
Talk to your broker about the change before removing a partner from the policy or canceling any coverage. Professional liability claims can surface years after the underlying work was performed, so the timing of a departure doesn't reduce that exposure. The goal is to understand who actually performed the historical work, which entity performed it, and which insurance arrangement is meant to respond if a claim arises later.
Example
A founding partner leaves a five-person architecture firm to start an independent practice. The existing firm continues operating under the same name and entity, and the departing partner takes no active projects with them.
The remaining firm notifies its broker of the ownership change so the current policy can be updated. Separately, the firm and the departing partner need to understand how professional services the partner performed while still at the firm would be treated if a claim arose from one of those projects later. The new independent practice will also need its own policy for any new work going forward, which does not extend back to cover projects from the prior firm.
What to check when a partner leaves
- Notify your broker before removing anyone from the policy or changing ownership records
- Confirm the effective date of the ownership change and whether the entity or name is also changing
- Review the policy’s definition of insured to see how former partners are treated for past work
- Confirm whether the departing partner is taking any active projects with them
- If the partner is starting a new firm, arrange separate coverage for that firm’s new work
Related Questions
Does my firm's professional liability policy automatically cover a departing partner's past work?
It depends on how the policy defines who qualifies as an insured, including former partners or employees. Review the specific wording rather than assuming coverage continues.
Does a departing partner need their own insurance at their new firm?
Generally yes, for new work performed there. That new policy typically won't extend back to cover projects completed at the previous firm.
Should I remove a departing partner from the policy right away?
Talk to your broker first. Since claims can arise years after the work was performed, it's worth confirming how the change should be handled before making it.
What information does the broker need when a partner leaves?
Who is leaving, the effective date, new ownership percentages, whether the partner keeps practicing, whether they're taking projects, and whether the entity or firm name is changing.
Does it matter which entity performed the historical work?
Yes. Identifying which entity performed the work, and under what insurance arrangement, is central to determining what would respond to a future claim.
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Read MoreAuthor:
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Reviewed by:
Hardcover Insurance Team
Last reviewed:
September 30, 2026
This article is educational and does not provide legal advice or determine whether a specific claim is covered. Policy terms, exclusions, underwriting requirements, and applicable law vary. Consult your insurance professional and qualified legal counsel regarding your circumstances.