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Patrick O’Leary, General Counsel, and Christina Lewis Abate, Risk Manager, recently co-authored an article published in St. Louis Bar Journal, Fall 2014. The article discusses key features on which to focus when comparing policies from various carriers.  To read the article in its entirety, click here.

 

What to Consider When Comparing Malpractice Policies

The goal when purchasing a Lawyers’ Professional Liability (“LPL”) insurance policy is to protect the assets of the firm and its individual lawyers.  Of course when a claim arises, you want the broadest coverage and the best possible claim service and defense team.  When comparing malpractice carriers, important considers include not only the coverage offered by the policy and the quality of the claim service, but also risk management and practice management services, and other resources and expertise available to help avoid a claim in the first instance or to minimize the effects of a claim when an error is made.  LPL insurance is NOT a commodity and should not be treated as one.

We will explore herein some of the most prominent provisions in LPL policies that affect coverage and provide critical information to make you a better, more informed consumer.  We will also explore the importance of risk management and practice management services to your overall loss-prevention strategy.

Broad Coverage:
You want the broadest possible coverage for your services as a lawyer.  One common provision to avoid is a limitation on coverage strictly to services performed for or behalf of the policyholder firm.  Such limitations are most commonly found in the insuring clause of the policy or in the definition of “Legal Services” or “Professional Services.”  This limitation can be the basis for denying coverage for a claim that would otherwise be covered, and can have devastating effects on the lawyer against whom a claim is made.

This “on behalf of the policyholder firm” limitation affects lawyers in a couple of key ways.  If an alleged error or omission occurred at the lawyer’s prior firm, there may be no coverage under the lawyer’s current LPL policy for that claim.  This is important because 85% of lawyers will change jobs at least once during their career.[1]  Many lawyers believe they will be protected by their former firm’s policy, but this can be a fallacy.  For instance, what happens when that prior firm no longer exists?  We need only look at the recent closings of firms like The Stolar Partnership and Gallop, Johnson & Neuman, among others, to understand the importance of maintaining your own coverage under your current LPL policy.

The “on behalf of the policyholder firm” limitation also affects lawyers who may periodically represent clients (often friends, family, or a church or civic organization) separately from their work with their firm.  If a claim would arise from one of these representations, it would not be covered due to this limitation on coverage.

To continue reading this article in its entirety, click here.

[1] Lawyers at Mid-Career: A 20-year Longitudinal Study of Job and Life Satisfaction, John Monahan & Jeffrey Swanson, 5 J. Empirical Legal Studies 2 (2009).

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