Once you realize that you’ve made a mistake, your first step should be to notify the client. After that, if you’re an associate, you’ll need to talk to your boss, and if you’re a partner, you’ll need to alert your colleagues. And one more thing: you’ll need to notify your legal professional liability (LPL) insurance carrier.
The Benefits of Timely Reporting
Under the terms of an LPL policy, an attorney is obligated to report a claim or potential claim right away, whether or not he believes that the claim has merit. The failure to report a claim can lead to a loss of coverage, and in most circumstances, a lawyer’s attempt to make the claim go away or pretend it doesn’t exist won’t work.
So even if you think the claim is frivolous, you still need to report it to your LPL carrier immediately, for several important reasons:
- Mitigation. Prompt reporting will allow your LPL carrier to proactively address, repair, and contain the issues surrounding the claim.
- Defense. Early notice of a claim will allow your carrier to gather relevant documents and evidence to help build the strongest defense possible.
- Accounting. Timely notice of a claim will allow for accurate accounting to the applicable fiscal year, which affects LPL rates.
- Trust. Prompt notice of a claim, actual or potential, helps builds trust between the lawyer and the underwriter, and also between the underwriter and the insurance carrier.
While there is nothing wrong with trying to fix a problem, this will not satisfy the duty a lawyer has to report a potential malpractice claim to their insurance carrier. If you have questions regarding reporting a claim, contact USI Affinity today.