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What Every Lawyer should know about Legal Professional Liability Insurance

07 Jul 2014 1:27 PM | Michelle Barrus (Administrator)
If you missed our June CLE on Legal Professional Liability Insurance, below you will find a copy of the outline as presented by Michael F. Skolnick of Kipp and Christian.
  • I.                   Area of Practice Factor
  • a.       AOP as pricing consideration
  • b.      Plaintiff vs. defense
  • c.       Greatest areas of risk
  • II.                Premium/Deductibles
  • a.       Graduated premium with claims made policies
  • b.      Difference between claims made and occurrence policies
  • c.       Effect of prior acts coverage
  • d.      5-6 year Amaturation@ process
  • e.       Loss only deductibles - no payment unless settlement or judgment
  • f.       Higher premium; less exposure for out of pocket loss on frivolous claim
  • g.      Higher deductible usually equals lower premium
  • h.      Make sure deductible is amount firm can comfortably handle
  • i.        Assume serious risk of claim every 2-3 years
  • III.             Firm Websites
  • a.       Underwriters will likely scrutinize
  • b.      Know what is on your website
  • c.       Representations about the firm’s experience handling high stakes cases
  • d.      Representations about AOP’s, which may not be identified in application
  • IV.             Applications
  • a.       Be thoughtful and thorough - app. incorporated as part of policy
  • b.      Will ask about conflict checking and calendaring
  • c.       Premium credits for well-conceived, redundant systems
  • d.      Will also ask about fee collection lawsuits
  • e.       Application provides opportunity to Aclean house@
  • V.                Levels of Coverage
  • a.       Policy limits dependent on risk
  • b.      If cannot cover maximum exposure at least cover equivalent of annual net income
  • c.       Discouraging plaintiff=s attorney from rejecting limits offer
  • d.      Per claim limit/aggregate claims limit
  • e.       Risk of multiple claims exposure
  • f.       Defense costs - independent of or inside policy
  • g.      Advantages of having costs outside policy
  • h.      Greater exposure equals greater cost of defense
  • VI.             Submitting Claims or Potential Claims
  • a.       Avoiding risk of non-coverage or policy rescission
  • b.      Consulting coverage counsel if questions arise about need to report
  • c.       Increased premium less expensive than non-coverage
  • VII.          Effect of Claim/Indemnification Payment on Future Premium
  • a.       Effects uncertain - up to underwriters
  • b.      Favorable judgment generally does not wipe slate clean
  • c.       Defense cost considerations/five year rule
  • d.      Generally small claims/low fees don=t have great deal of effect
  • e.       Factors outside your control - actuarial considerations, market factors
  • f.       Multiple claims may indicate high risk practice area or high risk practices
  • g.      Clients= demand for free or discounted services may constitute claim.
  • h.      Read claims reporting requirements in your policy

UDLA

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