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Understanding Your Lawyers Professional Liability Policy

November 30, 2017

 

 

      We talk a lot in this space about managing risk through preventative action. But there is another powerful risk management tool available to every attorney—indeed, in most jurisdictions, required of every attorney: lawyers professional liability insurance.

      Like other types of insurance, lawyers professional liability insurance manages risk by helping to offset potential monetary losses, in this case, associated with errors or omissions you might commit while providing services to your clients. No one is perfect of course, and there are costs associated with defending even unfounded lawsuits or disciplinary complaints.

 

Claims Made and Reported Policy

      While lawyers professional liability offsets losses like other insurance, it works differently from most other types of business insurance. Lawyers professional liability policies operate on a “claims made and reported,” basis: this means that coverage is determined by and arises from the policy that is in force at the time the claim is made known to the insurer, which may not be the same policy that was in force at the time the alleged error occurred.

      Because of the nature of legal representation, actual claims frequently do not ripen until long after the alleged error or omission: the result of a missed piece of evidence may not be truly known until the litigation is finally concluded; a drafting error in a will or property transfer may not come to light until years later. Even the effect of missed deadlines may not be fully realized or understood for a long period.

      In order to manage their own risks then, insurers place some limits on how far back their coverage will relate. This is usually done through designation of what is called a prior acts date, set by agreement between the carrier and the policyholder. Claims arising from errors, omissions, or other acts occurring before the prior acts date, or claims or potential claims known to the insured before the policy’s inception, would then not be covered even if they are made and reported during the policy’s in-force period.

      In light of this approach, most lawyers professional liability carriers recognize the reporting of a potential claim as the same as the reporting of an actual claim. Thus, if you report a potential claim now, and the client doesn’t actually file a complaint with you or the court until several years later, your coverage will arise under the policy that was in force at the time the potential claim was reported, even if you no longer have a policy with that carrier. On the other hand, if you are aware of a claim or potential claim at the inception of a policy and fail to disclose it to the carrier, the new policy will not speak to that claim, because it arose before that policy was in force.

      In light of this, it is particularly important to timely report claims and potential claims, as well as to maintain continuous coverage whenever you are in practice.

 

 


Protexure Lawyers /// Professional Liability Made Easy

“I found the Protexure representatives to be extremely professional, knowledgeable, and courteous. They found similar coverage for me for a substantial amount less than I had been paying. I have been pleased with Protexure’s service and would recommend it highly.”

- David M. Lipschutz, Esquire

Receiving a quote from Protexure Lawyers is made super easy by the quick response time of their team. The renewal process is different from what I have ever seen, they offer a mostly filled out application which made the process even easier for me!

- Eric Schwab - Woodbridge, NJ

It was a pleasure working with you, - you gave me the most competitive price, quick turn around and good follow-up.

- Howard S. Kavenow

My account representative was very helpful in assisting me to complete my application. He made me feel like my questions and my business were a priority to him.

- Kim Davis

When faced with a substantial increase from our existing malpractice carrier, we received the name Protexure Lawyers from a referral. On contact, they were not only very prompt in processing our application, but also responded to several coverage questions we had. So far, the service has been excellent.

- Law Office of Shriver, O'Neill & Thompson

Mr. Dixon contacted me many months ago and I told him I renew my policy in September and that it would be helpful to contact me in July or August of this year. He did that; he was very patient with me and assisted me with the application process. He was extremely prompt in replying to my inquiries. I had been with the same company for many years so I was reluctant to leave them. He made the transition quite simple. I am fortunate that he was the salesman who contacted me.

- Robert Lewin

Thanks. You guys got my business because (a) your price was great, and (b) you were responsive and on top of things (a number of insurers surprisingly were not).

- Scott Maxwell

I first came in contact with Ryan on a cold call. Usually I am dismissive of these types of calls, but Ryan was brief and to the point - no hard sell or over promising. In the end, I received a less expensive policy than others I researched. I guess not all cold calls are a bad thing.

- Steve Hunter

Ryan offered to compare my current insurance with what he and his company could offer. I took him up on this, and gave him my pertinent information. I did my own research, and discovered that his quote was lower and the carrier had an A rating. I contacted my existing agent to see if she could match the quote. I had been her customer for a number of years and thought that was fair. She was unable to match Ryan's offer.

- Steve Hunter

I discussed some minor differences in the policies with my account representative, and throughout the process, he was easy to reach and called me back promptly. I value this a great deal. In the end, it was clear to me that I would receive a less expensive policy than I currently have, with the same coverage and excellent customer service.

- Steve Hunter

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