A shared in last month’s issue am continuing with examples of how you can make certain that you are properly protected on your Lawyers Professional Liability.
Why, you may ask? That is because too often the enemy of being great is simply being good versus being awful. In fact, if something is perceived to be good or good enough then it is often deemed acceptable. Yet if you’re reading this article, my feeling is that you are a person that does not settle for the status quo.
See in our litigious society, too many excellent law firms have had allegations of malpractice made against them. Lawyers Professional Liability insurance policy form language is critically important. It can mean the difference between whether your insurance company will pay claims that may result.
You need to know that not all Lawyers Professional Liability (LPL) insurance policies are created equally, and even if the policy under consideration does not contain the policy language and coverage that you desire, you can negotiate the coverage that you need, sometimes at little to even no additional cost.
Continuing on again from last month’s issue as follows are so more excellent example of what to look for to make certain that you are properly protected on your Lawyers Professional Liability.
Loss of Earnings Coverage— Yes, Your Time is Valuable
Many insurers nowadays include “loss of earnings” coverage in their LPL policies meaning this coverage reimburses you for lost wages while attending a deposition, trial, or other work time lost by you related to investigating or defending a claim on the request of the insurer.
Usually, there are caps to this enhanced coverage on a per day, per claim, and per policy period basis. For example, an insurer may offer up to $500 per insured per day for your time spent cooperating with your insurer to defend the claim, subject to a limit of $10,000 per claim and $50,000 per policy period for all insured attorneys in your firm. This coverage is usually provided with no additional premium.
So let’s look at an example. Say your firm carries a $5,000 deductible, and it applies to this coverage enhancement at $500 per day, then your firm would have to incur at least 10 days’ worth of lost wages before this coverage would come into effect. Clearly, the deductible in this situation would render the coverage enhancement much less advantageous to the firm, so you should investigate how the “loss of earnings” coverage interacts with your policy’s deductible.
Disciplinary Proceedings— Complaints That Will Crush Your Cash Flow
Another common LPL policy coverage enhancement will pay for the cost of defending you in a proceeding that is brought by a disciplinary board that alleges professional misconduct. Insurers providing this coverage enhancement will pay for the costs of defending you up to a certain limit for each proceeding and an aggregate limit for all such proceedings in a given policy year.
For example, your insurer may provide $10,000 of defense costs per disciplinary proceeding and up to $25,000 per policy period. As with the “loss of earnings coverage,” this coverage enhancement is usually provided with no additional premium. However, if your firm’s deductible applies to this coverage, then a large portion of the benefit is eliminated.
Pro Bono Services—No Good Deed Goes Unpunished?
One relatively new coverage enhancement eliminates application of your firm’s deductible to any legal services rendered by your firm to pro bono clients. If your law firm engages in pro bono services then you will be viewed positively by your insurer because it demonstrates a commitment by your firm to “doing the right thing” rather than on functioning solely as all about the money. If your firm is solely focused on making money, that might signal that you may, for example, cut expenses to the detriment of prudent risk management.
Wouldn’t it be a shame if your firm had the out-of-pocket expense of the amount of a deductible if a pro bono client turned around and sued your firm for legal malpractice? Obviously, the larger your deductible the more valuable is this coverage.
It is not a common optional endorsement, but it is worth asking about. It is usually offered for no additional premium.
The market for LPL insurance is usually very competitive. It is your firm’s financial health and reputation that is on the line. A good LPL insurance policy should not be viewed as “good enough.” It is worth your time to read the policy, ask for what you want, and realize the coverage that you need.
An expert LPL insurance broker is your advocate in this process and can greatly aid you in this process. So be as detailed as possible to allow the expert LPL insurance broker help craft coverage enhancements that you need and want as ultimately, it is your firm’s responsibility to make sure that you have great coverage in place.
In next month’s issue will continue to share with you excellent Lawyers Professional Liability “insurance insider secrets guaranteed to plug all fatal gaps in your Lawyers Professional Liability insurance protection.