What happens to a professional practice's malpractice insurance history when it's sold?

Malpractice insurance is personal to the professional, not something that automatically transfers with the practice the way office equipment does. Most professional liability coverage in Ontario is written on a "claims-made" basis, meaning it responds to claims reported while the policy (or an extension of it) is active, regardless of when the underlying conduct occurred. When a professional sells or retires from a practice, a gap can open up: work done before the sale can still generate a claim years later, after the original coverage has lapsed.

This is where "tail" or extended reporting coverage becomes important, letting a departing professional keep protection in place for claims that surface after they've stopped practicing. Buyers should not assume that the seller's insurance history, or ongoing coverage, transfers to them or protects them for work the seller performed before closing; buyers generally need their own coverage for their own practice going forward, while the seller (or their estate) remains responsible for the tail on their own prior work.

Confirming what coverage the seller is keeping in place, and getting that documented in the purchase agreement, protects everyone once the transition is behind them.