Unfortunately, in our litigious society, even the best lawyers and the most well-managed law firms have had allegations of malpractice leveled against them. This makes the quality of a firm’s lawyers professional liability (LPL) insurance critically important.
Keys to Great Coverage
All LPL insurance policies are not created equal, and the new year is the logical time for a law firm to review its coverage. The following checklist can help you determine whether it’s time to make some changes:
- Endorsements. While the main body of an LPL policy has been approved by the applicable state department of insurance and cannot be modified, it can still be amended through endorsements. State departments of insurance know that one policy form does not fit every situation. So, they allow insurers to use endorsements to create coverage that meets the needs of individual law firms. Additionally, the use of endorsements allows carriers to broaden coverage and create differentiation between policy forms and carriers.
- Deductibles. Almost all LPL policies include a policy deductible, which is incurred first in any claims scenario and has an immediate impact on a firm’s bottom line in the event of a claim. Most LPL policies are written with a per claim deductible, and since claims are relatively rare, per claim deductibles are typically satisfactory. Aggregate and loss only deductibles give viable alternatives to lessen the negative effects of a deductible on the firm.
- Coverage Enhancements. Some relatively new coverage enhancements added to LPL policies can translate into big savings: loss of earnings coverage to reimburse an attorney for lost wages while he attends a deposition or trial, disciplinary proceedings coverage that will pay the cost of defending an attorney in a disciplinary proceeding.
In today’s world, if something is good, it is often considered acceptable. But in the world of LPL insurance, continual improvement and growth should be the ultimate goal.
Mike Mooney is the Vice President – Association Programs for USI Affinity. Mike currently sits on the Law Practice Management Services Committee of the DC Bar and he is a regular speaker and panelist for the Law Practice Sections of the NYSBA, NJSBA, and NJICLE regarding Insurance and Risk Management topics relative to the legal industry. Mike holds a Property and Casualty Insurance License in New Jersey and many non-resident Producer Licenses in a variety of other states.