BUY LEGAL MALPRACTICE INSURANCE

Buy Legal Malpractice InsuranceBuy Legal Malpractice Insurance, Buy Attorney Liability Insurance: Coverage, Limits, Deductible, and Premium, Optimized for Your Firm

I. How We Help Your Firm

Most law firms buy malpractice insurance.

Great law firms optimize their malpractice insurance.

We ensure it.

Here’s how:
A. We’re connected: we have a big book of legal malpractice insurance business. This enables us to maintain strong relationships with all of the major legal malpractice insur-ers, such as AIG, CNA, Hanover, Travelers, etc., as well as specialty insurers that cover law firms the major insurers avoid, i.e., those that have a poor claims history, or handle patent, securities, or other ‘high-risk’ matters. Having these relationships enables us to obtain the best possible terms for law firms that use our services.

Every insurer we work with is A-rated for financial strength, and has years of experience underwriting legal malpractice insurance, expert claims managers, and a panel of skilled legal malpractice defense counsel.

B. We help each firm “put its best foot forward”, by reviewing its application, and suggesting any revisions or addendums that will better explain its practice and pro-cedures to insurers.

C. We “shop ’til we drop”: most agents and brokers obtain quotes from three or four legal malpractice insurers, and recommend the best one. This is efficient for them, and firms usually end up with a competitive quote. As a result, it has become standard practice…but not for us.

Our mission isn’t to obtain competitive terms for a firm, but to obtain the best terms that are available in the market. The only way to do this is to identify all viable insurers for a firm, given its size, location, practice areas, etc., and submit its application to every one of them, because there’s no way to predict which one will offer it the best terms. So we do.

That’s why most agents/brokers usually obtain quotes from 3 – 4 insurers, while we usually obtain proposals from 7 – 10 insurers.

D. We avoid quotes, which overemphasize price, and instead solicit proposals from each insurer, at various limits, deductibles, and coverage options, based on a firm’s risk profile.

After every insurer has offered its initial proposal(s), we circulate the best ones, and sol-icit another round of proposals. We repeat this process until every insurer has offered its best proposal(s).

We then present the proposals – there are usually a dozen or more – to the firm, high-lighting the best ones, and let it compare them to the renewal terms offered by its current malpractice insurer. The best proposal usually offers a superior combination of cover-age, limits, deductible, and premium.

That’s legal malpractice insurance…optimized.

II. Important Notes

A. The key to optimizing your firm’s legal malpractice coverage is to get competing proposals from all viable insurers at least every third year. If you don’t, then your firm is likely overpaying and underinsured, and repeating this mistake every year. Even if you don’t use our services, you should insist that your current broker do this. It may at least enable your firm to get better terms from its current insurer.

B. If your legal malpractice insurer non-renewed your firm’s policy, and no other major insurer will offer it coverage, then we’ll obtain the best terms for it from among the in-surers that cover non-renewed firms.

III. Next Step

  • To learn more about legal malpractice insurance, visit our Legal Malpractice Insurance Center
  • If you have any questions, contact our principal broker, Curt Cooper at (202) 802-6415 or ccooper “at” lawyersinsurer.com
  • If you’re ready to obtain no-cost, no-obligation malpractice insurance proposals:

Click this link Apply for Legal Malpractice Insurance – to complete an application, or arrange to send us an application that your firm completed for its current malpractice insurer.

IV. Attorney Feedback

“I recently worked with Curtis…I thought he did an excellent job staying in touch with me and giving me fair advice, without pressure to purchase anything in particular…this is exactly the type of professional I want to do business with.” (Rating: 5 stars out of 5.)

Full review: http://www.yelp.com/biz/lawyers-insurance-group-washington

We received this email from the owner of a law firm for whom we procured malpractice coverage after its existing coverage was non-renewed:
“From beginning to end, you have served us so well, keeping me informed every step of the way. Thank you Curtis! I will recommend you without hesitation to any lawyer in need of a professional insurance broker.”

V. The Attorney’s Guide to Legal Malpractice Insurance

Few attorneys have time to master legal malpractice insurance. However, it’s an essen-tial risk management tool for every law firm, and a major cost. This guide will help you optimize your firm’s coverage.

A. Best Policy Language – Legal Malpractice Insurance

There are material differences among the insurance policies of the major legal malprac- tice insurers, which can mean the difference between your firm being covered or not covered, if it’s sued for malpractice.

1. Definition of Legal Services
All legal malpractice policies cover legal work done by a firm’s lawyers, but some law-yers are also mediators, title agents, executors or administrators of estates, etc., and/or do pro bono work, and some policies don’t cover those activities.

Your firm’s broker should ask if any of its lawyers acts in any of these or other capacities, and if so, procure the proper coverage.

2. Intentional Acts
Legal malpractice plaintiffs often allege that a lawyer has committed a dishonest, inten-tionally wrong, or illegal act, in order to pressure them. Legal malpractice policies ex-clude coverage for claims that allege such conduct, but some policies will defend an accused lawyer(s) until a verdict or court ruling is issued, while others won’t, in which case either the lawyer or firm must pay for his/her defense. Further, some policies cover any innocent partners who are named in the suit, while others don’t.

Your firm’s broker should tell you if its current policy has a broad or narrow exclusion, and the firm should consider this when evaluating competing policies.

B. Best Legal Malpractice Insurance – Policy Limits

Legal malpractice insurers offer policy limits on a per claim/annual aggregate basis. For example, a limit of $1M/$2M means the insurer will pay up to $1,000,000 for defense and indemnity costs for each claim that’s made against a firm during the one-year policy period, subject to a maximum of $2,000,000 for all claims that are made against it during the policy period. Limits start at $100K/$300K, followed by $250K/$250K, $250K/$500K, $500K/$500K, etc., up to $5M/ $10M; each higher limit raises the premium about 10% – 15%. Limits above $5M/$10M can be bought via an excess policy.

The right policy limits for your firm depend on its attorney count, practice areas, the av-erage value of its cases, etc. Your firm’s broker should review the firm’s practice every year, and tell you if its limits are adequate; if they’re not, have your broker solicit quotes for higher limits, and then decide if they’re worth the higher premium.

C. Best Legal Malpractice Insurance – Claim Expenses

Most legal malpractice claims generate substantial legal fees and related costs, which are called “claim expenses”. A key factor in choosing policy limits is whether the under-lying policy pays claim expenses inside or outside of the limits:

Claim Expenses Inside the Limits (CEIL): the insurer deducts legal fees and costs from the policy’s per claim limit as it pays them, which reduces the amount available to pay any settlement or judgment. Most firms have this type of policy, which is also called an “eroding limits” policy. If a firm’s per claim limit is used up before a malpractice claim against it has been resolved, then it must pay all additional legal fees and any judgment or settlement out-of-pocket.

Claim Expenses Outside the Limits (CEOL): the insurer doesn’t deduct legal fees and costs from the per claim limit, so the entire limit is available to pay any settlement or judgment; further, there’s no limit on claim expenses. Insurers are reluctant to offer this coverage, so relatively few law firms have it, and it costs more than CEIL coverage.

Your firm’s broker should solicit quotes for CEOL coverage, and tell you if the quotes you receive are for CEIL or CEOL coverage; if they’re for CEIL, consider buying a higher limit to offset the “eroding limits”.

D. Best Legal Malpractice Insurance – Policy Deductible

A deductible applies to every claim.

The minimum is $1,000; higher options are $2,500, $5,000, $10,000, $15,000, $25,000, $50,000, $100,000, etc. The higher a firm’s deductible, the lower its premium, but insur-ers will offer only as a high a deductible as they believe a firm can afford to pay, based on its annual revenue, etc. There are three types:

1. Loss & Expense Deductible: applies to indemnity payments (loss) and claim expen- ses, i.e., legal fees; most legal malpractice policies have this type of deductible. The firm must pay all losses and claim expenses until the deductible has been fully paid; the in- surer won’t make any payments until then. Most firms satisfy their deductible by paying legal fees, because they’re usually the first expenses that are incurred on a malpractice claim.

2. Annual Aggregate Deductible: applies to loss and claim expenses, which the firm pays until it has reached the annual aggregate. No further deductible applies during the policy period, even if the firm incurs more claims.

3. Loss Only Deductible, a/k/a First Dollar Defense: applies to indemnity payments, but not claim expenses, which the insurer pays from the first dollar. Claim expenses are us- ually incurred on a malpractice claim before any indemnity payment is made, and often no indemnity payment is made, because the law firm prevails. Thus, a law firm that has this type of deductible usually doesn’t pay anything, which is why insurers charge extra for it.

VI. Who We Serve

We optimize legal malpractice insurance for:

  • New law firms, including solo practices
  • Established firms of all sizes and in all practice areas, including high-risk practice areas like Securities, Sports/Entertainment, Real Estate, IP, and Personal Injury/ Medical Malpractice/Class Actions.
  • Special situations: law firms that have had their legal malpractice insurance can-celled or non-renewed; are merging or disbanding; are in or emerging from bankruptcy; etc.
  • Independent Contractors

VII. Legal Malpractice Insurance – Further Reading

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