Choosing a carrier

Performing due diligence on a prospective carrier for professional liability coverage is critical. Take time to understand the company: Find out about its financial stability, history in your geographic area (does it come into the market and then leave, or is it a stable presence), reputation in the marketplace and how long the carrier has been writing Lawyers' Professional Liability policies.

Designing coverage

Lawyers' Professional Liability coverage is not one-size-fits-all. Some attorneys may need to be insured to be on a referral list. If a real estate company requires proof of coverage before they will work with an attorney, the attorney must be able provide proof that coverage is in effect. Other attorneys will have different priorities. In order to obtain the right endorsements and exclusions to meet a firm's specific needs, the attorney, firm and broker should review the following list of questions with a prospective carrier's agent or broker:

Policy Structure

· What is the policy period?

· Is the policy Claims Made or Claims Made and Reported?

· What claims are covered?

· Is Prior Acts coverage necessary for my firm? Am I eligible / are other lawyers in my firm eligible for Prior Acts coverage?

· If I leave a firm, do I need an Extended Reporting Period Endorsement (ERP) to protect me from claims arising: (1) after the last policy has expired, or

(2) under a policy which does not provide coverage for that claim?

Lawyers Covered

· Is every lawyer in my firm covered?

· Are past partners and employees covered?

· Are paralegals covered?

· Does the policy cover innocent insureds?

Amount Covered

· Does the policy cover all claims against the firm?

· What Limits of Liability do I need?

To obtain the right coverage endorsements, an attorney, firm and broker should prepare questions for prospective carriers:

· Does the Policy cover defense costs and settlement costs?

· Do I need Claim Expenses outside the Limits?

· What deductible do I need? Aggregate, 50 / 50 or loss only?

· What is in the "exclusions" section and is not covered?

Defense and Settlement

· Who selects counsel in the event a claim is made?

· Does the Insured need to agree with the Carrier to settle a claim?

· What happens if I do not want to settle?

· What happens if I have a dispute with my carrier?

Material Changes To The Law Firm

· What is a Material Change?

· When do I have to report a Material Change?

· Does a Material Change affect the premium?

Notice of Claim

· What do I have to report?

· Do I need to report a claim that has been made or an error that could become a claim or both?

· When do I have to report it?

· Whom do I report it to?

· Does the notice have to be in writing?

 Taking the time to understand how Lawyers' Professional Liability coverage works and the policy and the policy provisions, endorsements and exclusions available is critical in helping ensure you have the coverage you need for yourself and your practice.

GRINS & GIGGLES 

A 'friendly' wager on the golf course