LEGAL MALPRACTICE INSURANCE NON-RENEWED

Legal Malpractice Insurance Non-Renewed

Legal Malpractice Insurance Non-Renewed: aggressive comparison shopping to help your firm obtain replacement coverage, if its coverage is non-renewed due to claims history. Short online application. Fast, free quotes from “A”-rated insurers.

I. Legal Malpractice Insurance Non-Renewed – How to Obtain Replacement Coverage

Take these steps:

A. Identify the cause(s) of each malpractice claim on your firm’s loss run, and implement measures to prevent them from recurring.

For example, a personal injury law firm that has been sued for malpractice several times because it let the statute of limitations expire without filing suit, should improve its calendaring/docketing systems; a firm that has a history of conflict-of-interest claims should improve its conflict-checking systems and client/matter acceptance procedures; a firm that has sued clients for unpaid fees and incurred counterclaims for malpractice, should improve its billing and collection practices, etc.

Prospective insurers are going to scrutinize your firm’s application and ask “what’s changed?” You must have a good answer, or your firm won’t be able to obtain malpractice coverage at any price.

B. Complete a claim report for each malpractice claim that your firm has incurred in the last five years. If your insurer at the time had you complete a claim report when you notified it of the claim, then you can use that report now, but make sure that you’ve clearly stated the corrective measures your firm has taken to prevent a recurrence.  

C. Complete an application, as you do every year. 

D. Request a loss run from the insurer that non-renewed you. This is a summary of your firm’s claims history, printed on your insurer’s letterhead: it lists all of the claims that your firm reported to that insurer, the total dollars the insurer has paid to resolve each closed claim, and the amounts it has both paid to date and set aside in reserve for each open claim. The loss run also lists all incidents that your firm has reported, and any reserve that the insurer has posted for them.

If you bought your policy directly from your insurer, request your firm’s loss run from its customer service department. If you bought your policy through an agent or broker, ask him or her to obtain it for you. Note: the loss run should go back at least 5 years. If you switched insurers during that time, request a loss run from the prior insurer, too.

E. Make sure that your insurer sends you a non-renewal notice 30 – 90 days before your policy expires, as required by regulation in every state; the required amount of time varies by state. An email or phone call from the insurer or the agent/broker who placed the policy for you, doesn’t comply with regulations. You’ll need the insurer’s non-renewal notice to obtain quotes for a replacement policy.

F. Send your firm’s claims report(s), loss run, application, non-renewal notice, and completed application, to the broker who’s going to solicit quotes for your firm.

II. Legal Malpractice Insurance Non-Renewed – How A Non-Renewal Affects Your Premium

If your firm is insured by a Standard Market malpractice insurer, such as CNA, Travelers, ALPS, Minnesota Lawyers Mutual, etc., and its coverage has been non-renewed because it has incurred malpractice claims, then the other Standard Market insurers will likely consider your firm to be a poor risk, and decline to offer it coverage.

In that case, it’ll have to shop in the Surplus Lines market, a/k/a/ the Non-Standard or “hard-to-place-risks” market.

This market is less competitive than the Standard Market, and unlike Standard Market insurers, Surplus Lines insurers aren’t constrained by regulators in how much they can raise a firm’s premium. As a result, premiums are typically 50% – 100% higher in this market, i.e., if your firm was paying a Standard Market insurer $10,000 for malpractice coverage, it was non-renewed, and you had to buy coverage from a Surplus Lines insurer, you’d likely pay $15,000 – $20,000 for a policy with the same limits, deductible, and prior acts coverage. In some cases, the insurer will require the firm take on a higher deductible and/or lower policy limits.  

III. Next Steps

As mentioned, we’ll also need a copy of your non-renewal notice, loss run, and claim report(s), as required by the insurers. 

We’ll send your submission to all suitable insurers, first attempting to place your coverage in the standard market. If that’s not possible, we’ll then send your submission to the surplus lines market.

We’ll contact you as the insurers respond, and advise you when we’ve obtained the best possible proposal. If your firm wants to accept it, you’ll have complete the insurer’s full application and provide any other information it needs to offer you a binding quote, which should match or be very close to the proposal. We’ll assist you in completing the application.

Contact me, if you have any questions: 

Curt Cooper, Managing Broker
(202) 802-6415 | ccooper ‘at’ lawyersinsurer.com
Licensed Insurance Producer in CA, NY, TX, PA, MI, NJ, WA, DC, MD, VA, etc. 
National Association of Insurance Commissioners Reg. #1017031

NOTES:

If you filled out an application or premium estimate form for another broker or any insurer, send us that, instead of filling out our form.

Please complete the form below, one for each claim, or send us the claim report that you filled out for your insurer.
Supplemental Application – Malpractice Claim Information

If your firm derived 1% or more of its revenue in the last fiscal year from any of the following areas, please complete the appropriate form: se ns 

Supplemental Application – Banking/Financial Institutions
Supplemental Application – Class Actions/Mass Torts/MDL 
Supplemental Application – Entertainment
Supplemental Application – Securities

Email your firm’s documents to Curt Cooper: ccooper “at” lawyersinsurer.com. 

IV. Legal Malpractice Insurance Explained

V. Reduce Your Risk of Committing Legal Malpractice

Calendaring/Docketing Best Practices

Conflict of Interest Avoidance Best Practices

Engagement Letter/Retainer Agreement Best Practices

Billing Practices to Increase Realization Rates and Avoid Fee Suits

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