Recently we wrote attorney malpractice insurance for a law firm that had been with Hanover Insurance since 1986. The firm was one of the original law firms that started with Michigan Lawyers Mutual in 1986. It had stayed with Michigan Lawyers Mutual which had changed to Professionals Direct Insurance Company (PDIC) in 2001. In 2007, PDIC was purchased by Hanover Insurance. Through the years and all of these changes this law firm had never shopped their attorney malpractice insurance. They were extremely loyal to the insurer.
Although Hanover and its predecessors never took any really large rate increases over the years the cost of insurance for this firm which was carrying $1 million of liability coverage had grown to over $26,000 annually. The firm had never had a claim or grievance filed against them. Insurers count on what is called ‘adhesion’. This term describes a law firm that as long as the increase is not too much they will just renew year after year.
Hardest part about finding alternative coverage for the firm was answering the question from the underwriters as to why the firm was paying so much. We were able to obtain insurance for this law firm from an AM Best A+ rated insurer for around $11,000 annually with better coverage.
Now we cannot promise these types of savings for every law firm we work with and there are very legitimate reasons that a law firm should stay with their incumbent insurer. But not periodically looking at alternative insurers can cost you money in the long run. As a nationwide independent insurance agency, L Squared writes with over 30 different admitted insurers and an equal number of non-admitted insurers to meet your needs. These insurers all specialize in lawyers professional liability insurance. And unlike many agents that only write for one or two insurers, at renewal we look at each L Squared client making sure that they are getting the most cost effective insurance coverage that meets the firm’s needs. Where it makes sense we unlock the adhesion.