Question from Law Firm:
My Lawyers Professional Liability Insurance carrier non-renewed my policy because of a claim. Now all I can get is “Surplus Lines” or a non-admitted insurance carrier for a much higher premium than I used to have to pay. How many years after a legal Malpractice claim do I have to wait to get back with an “admitted” Lawyers Professional Liability Insurance carrier?
There is no one answer to this question. One of the best predictor’s future attorney malpractice claims is past legal malpractice claims. As a rule of thumb, if there is no other claims activity, it is normally 3 to 5 years, before admitted carriers will normally provide Attorney Malpractice quotes. Yes this answer can cause much frustration for the law firm.
Much depends on the type of legal malpractice claim, the size of the claim and the circumstances that caused the claim. If the Legal Malpractice claim was “preventable” because of an error in judgement or a lapse in procedure and the law firm has taken steps to address these shortcomings, then there may be a story for getting the law firm back in the admitted market sooner.
If on the other hand the Law Firm does not address the issues that may have caused the claim or because of the areas of practice the law firm is in, then many “Admitted” Lawyers Liability Insurance underwriters will want to wait to see “clean” loss runs for a number of years to provide terms.
If the law firm has a frequency issue for legal malpractice claims, even if there are no damages paid, then the law firm may have to continue with coverage through surplus lines carriers for the foreseeable future.