Make sure you compare the coverage – and not just the price. Download a Free Coverage Comparison Chart!
When shopping for Lawyers Professional Liability insurance, or any other type of Errors & Omissions coverage, premium is an important consideration. However, in today’s competitive market, the differences amongst premiums are likely to be less significant than the differences in coverage. Price alone should not be the determinative factor when choosing a policy. There are many differences amongst policies that should be evaluated before choosing simply the “cheapest” quote. Here’s just a few you should compare.
1. Coverage for Disciplinary Proceedings
In 2010, over 100,000 complaints against lawyers were referred to disciplinary committees. (American Bar Association Survey). Although most major insurance companies provide coverage for disciplinary proceedings (i.e. grievances), some smaller, bar-related insurance companies do not offer this essential form of protection. For those policies that do include this very important coverage, there are often significant differences that you should consider.
Most policies provide up to $25,000 per grievance, per year. However, some policies cap the limit of coverage at $10,000 or $15,000. Some policies will provide this coverage only as a reimbursement coverage. The attorney must incur the defense costs and seek reimbursement under the policy Other policies provide this coverage directly – hiring an attorney to provide the defense for the insured attorney.
When comparing your choices for professional liability insurance, it’s important to evaluate whether disciplinary coverage is included and the limits of that coverage.
2. Punitive Damages
Before purchasing a lawyers’ professional liability policy, you should know what type of claims will be covered. Some policies exclude coverage for all claims for punitive damages. Other policies provide coverage for punitive damages as part of the policy form. Still other companies, offer this coverage as an endorsement to the policy that can be purchased for a modest additional premium. So, when comparing premiums, be sure to consider whether the policy you choose will include or exclude this type of coverage at the premium offered.
3. Who is an insured?
It’s not uncommon for malpractice claims to be made against a lawyer or law firm as the result of an error or omission made by an employee, independent contractor, former partner or associate. The plaintiff’s lawyer will typically name the law firm and the responsible lawyer and or individual as a defendant in a malpractice lawsuit. Do you know whether your policy includes coverage and will provide a defense for these individuals?
When considering purchasing malpractice insurance policy, it’s important to know who is defined as an insured under the policy. Some policies define insureds only as those attorneys listed on the Declarations page of the policy. A broader policy form identifies all employees, independent contractors, attorneys, associates, partners, former employees and retired partners as insureds under the policy if services were provided on behalf of the law firm.
Because there are so many differences amongst lawyers’ professional liability insurance policies, you may not be able to do an apple to apple comparison. Nevertheless, you want to be sure that you are not paying a high-priced premium for a policy that provides limit coverage.
To help our clients choose between lawyers professional liability policies, we have created a coverage comparison checklist. Click here to download your copy.