Lawyers Professional Liability Insurance companies cap their exposure to losses through a variety of means. One is by limiting the limits the carrier will post for one firm. All Lawyers Professional Liability Insurance companies have reinsurance which also limits their exposure to “shock” losses. Reinsurers in their reinsurance treaties dictate the firm types written under the treaty and the limits they will reinsure. Again the reinsurers also want to limit their exposure to any type of “shock” loss. This is just one way that insurance carriers spread the risk. So your primary Lawyers Professional Liability Insurance carrier hands may be tied in many cases to offer higher limits.
If you have a personal or commercial umbrella it will not cover your activities as an attorney. Umbrella policies specifically exclude this coverage.
Some law firms also attempt to get another “primary” policy to increase their coverage to the limits they desire. Generally through the application process, once a Lawyers Professional Liability Underwriter determines the firm has other “primary” coverage for the law firm they decline to write. There are a variety of problems with having 2 Lawyers Liability Policies covering the same exposure. The major one is the “Other Insurance” clause commonly found in most policies. The following is an example from a Wesco Insurance Company form:
“E. Other Insurance
If there is other insurance that applies to the claim, this insurance shall be excess over such other valid and collectible insurance whether such insurance is stated to be primary, contributory, excess, contingent or otherwise. This does not apply to insurance that is purchased by the Named Insured specifically to apply in excess of this Policy.”
You best option is to get an “excess” Lawyers Professional Liability Insurance policy that is a “following form” policy. A “following form” Excess Lawyers Professional Liability Policy will have language in it that basically states that this excess policy will follow the terms and conditions of the underlying primary coverage. It also has language in it to make sure that the “Other Insurance” clause in the underlying coverage is not triggered. For some firms to get the higher limits needed, you may need more than one “excess” policy.