Myth #1:  Since most NC lawyers buy their malpractice insurance from the same company, that company must have the best price. The truth is that many North Carolina lawyers are paying substantially higher premiums than competitors’ rates for a policy that provides substantially less coverage.  Yes, that’s right – they are paying more to get less.  Those lawyers that have poor claims experience, practice in high risk fields such as intellectual property, syndic...

Law firms need to reapply for legal malpractice insurance every year. And on every application, whether it be for new business or a renewal policy, the law firm must answer questions about its client billings.  Typical questions are: •How many times have you sued a client for fees in the past 5 years? •What percentage of your billings are over 90 days past due? •What practices have you implemented to avoid suing your clients for fees? Insurance companies ask questions abo...

The lawsuit by Christ Academy against Hermes Sargent Bates was only recently filed.   Assuming the firm has adequate insurance limits, and there are no coverage disputes with the carrier, the insurance company will likely move quickly to control defense expenses and damages.  Fee disputes and breach of contract claims are typically not covered by a malpractice insurance policy. To trigger the firm’s malpractice coverage, the plaintiff’s attorney had to allege professional n...

Most professional liability insurance policies have a Retro Active date or Prior Acts date, few have Full Prior Acts or FPA. Full Prior acts is a type of claims-made liability policy that does not contain a retroactive date and therefore covers claims arising from acts that took place at any time prior — regardless of how far in the past. For example, assume that an insured has a claims-made policy that includes a January 1, 2000, retroactive date and a January 1, 2014–15, term....

Lawyers Professional Liability Insurance (LPL) and Accountants Professional Liability (APL) Insurance claims made coverage ends at the policy/coverage termination.  Lawyers Professional Liability Insurance Policies (LPL&APL) are generally written for the firm and coverage extents from the firm to the employees and partners/members.  Changes in firm makeup may constitute a material change to the firm and could trigger coverage termination (caused by changes in partners/members,...

All Lawyers Professional Liability Insurance policies have exclusions to some extent for acting as a Director or Officer of an organization.  Attorneys need to be careful when being asked to sit on a board or act as an Officer of an organization to not jeopardize coverage.  Some policies just restrict coverage when you are acting in the capacity of an Officer or Director, but will provide coverage for other activities that you do for the client.  Other policies have an outright ba...

Question from Attorney:  I am a full time employee at a large company.  I do an occasional will or trust on the side.  Probably less than 5,000 a year in revenue.  Is there a minimal coverage for that?  Should I get coverage for when i did have a practice?  I sold it in December 2014.   Response: We can get you a  lawyers professional liability insurance quote for the work you do on the side, at a relatively minimal cost, which should be less than $1,...

Thank you, Tracy.  We use retainer agreements.  Please define a non-engagement and disengagement letter and let me know how they are used.  Thank you.   I’ve pulled this information from http://www.nysba.org/ManagingYourPractice/ This is what the professional liability insurance carrier underwriter is expecting: Non-engagement letters explicitly inform prospective clients that the law firm will not accept retention. These should be used when your firm decides no...

Law firms designate the completion on the Lawyers Professional Liability application to many different people.  This varies from the Managing Partner to the beginning associate or newest clerk in the office.  While this can be expedient to have the newest member of the staff complete the application it can open up the firm to uncovered exposures, claims and at worst resciession of coverage. Either above or below the signature line of most applications have a phrase like the following:...

It is not possible to write a new policy to cover a suspended attorney with a Lawyers Professional Liability Insurance policy.   Most policies have an outright exclusion for a suspended attorney.  Although some Lawyer Professional Liability Insurance Carriers will permit the coverage to continue until renewal, many will cancel as soon as notified of the attorney’s suspension. Typical coverage exclusion for a suspended attorney is: “Professional Legal Services rendere...

Awarded attorney’s fees normally are not covered under a Lawyers Professional Liability Insurance policy.  Included under this category of damages are also civil or criminal fines, sanctions, or penalties ordered by a court or other administrative body.  Depending on the insurance carrier’s Lawyers Professional Liability Policy, the language for this exclusion normally is found in 1 of 3 places; the insuring agreement, the definition section where damages or claims are defi...

Disciplinary Coverage is an additional coverage found on most admitted and some non-admitted Lawyers Professional Liability Insurance policies.  Some Lawyers Professional Liability Insurance carrier’s policies that do not offer this coverage are willing to endorse this coverage on if requested.  With Lawyers Professional Liability Insurance policies not being standard, this additional coverage can be called “Additional Coverages”, “Supplemental Payments”...

Many Law Firms have a misconception that the Lawyers Professional Liability Insurance Coverage for an attorney continues until the end of the policy term because it is paid for even after the attorney has left the firm.  Once an attorney leaves a law firm their work they do after they leave the firm is not covered.    That attorney will need to purchase a new policy or be added to their new firm’s Lawyers Professional Liability Insurance policy to have on going coverage...

When I asked why my lawyer’s professional liability policy premium went up, the agent stated that it was because of “step rating”.  What is step rating and why did my premium go up? Lawyers Professional Liability policies are Claims Made Policies.  Most Claims Made Policies are Step Rated.  If your 1st policy written has no prior acts coverage you can expect that in years 5 to 7 that your policy premium will double.  The premium increases for your Lawyers P...

From Client:  I am primarily retired now, and planned to take advantage of the tail hook coverage at some point during the next few years.  How will this change affect me in that regard?  Response:  If you do not take advantage of the non-practicing extended reporting period endorsement(Tail) for AIG to provide at no cost prior to renewal, AIG’s obligation to provide this ends at the expiration date of this year’s coverage.  We have one carrier that curren...

Even though the insurance carrier is no longer writing Lawyers Professional Liability Insurance your coverage for an issued Extended Reporting Period Endorsement (Tail) remains in force.  With this stated, as the years go by you could be with a carrier that has merged, been sold, liquidated or gone completely out of business.  Many times your insurance agent will be able to help you locate the proper staff to report a claim. And if another insurance carrier has “taken” over...

Question from Client: Is this Lawyers Professional Liability Insurance Policy Extended Reporting Period Endorsement (Tail) Full Prior Acts? Response: Many people think that there is a separate policy issued once “Tail” is purchased on a Lawyers Professional Liability Insurance Policy.  This is not the case.   Generally the endorsement is just one page and only one or 2 paragraphs long.  There is not a separate policy that is issued.  The Extended Reporting...

Request from our Client: Need to add a rider to our Lawyers Professional Liability Insurance Policy to increase my limits to cover a large real estate deal for a client. Response: The term “rider” is normally associated with life insurance and health insurance policies.  For property and casualty policies the general term is an "endorsement." As to the request, a Lawyers Professional Liability Policy is a “claims made policy.”  Given this, if a claim is made...

It’s important to encourage your staff to improve client relationships whenever possible. Surprise your staff with gift cards or a catered lunch when you see them go above and beyond for a client, or if they consistently assist you with providing great client relations. Reprinted from AttPro Risk Management Tip of the Month.  www.attorneyprotective.com

If your 2 person law firm is splitting up and each going separate ways, the best approach for the firm is to Purchase an Extended Reporting Period Endorsement (ERP/Tail) at the time the split occurs.  The ERP is made part of your last Lawyers Professional Liability Policy extending the reporting period for the number of years purchased. Note that the firm should cancel the Lawyers Professional Liability Insurance Policy when the firm split occurs.  The firm should not wait until the a...

What professional liability limits should a firm carry is a frequently asked question.  It is one of the hardest questions for an insurance agent/broker to answer for a law firm.  The broker simply does not know your law practice well enough to give more than a ballpark of needed limits.  Although there are general guidelines, there is no set answer for a law firm.  Best answer is given the type of practice a law firm has and the type of clientele,   if I make a mis...

This is a frequently asked question.  Attorney takes the “free” non-practicing Extended Reporting Period Endorsement(ERP/Tail) on his Lawyers Professional Liability Insurance Policy and decides to start practicing law again at a later date.  What is the impact on the ERP?   In most circumstances once the attorney starts to practice law again the “free” retirement ERP becomes null and void.  Given the claims made nature of Lawyers Professional Liabi...

Lawyers Professional Liability Policies are “claims made” policies.  Meaning that the covered act claim must be reported (claim made) during the policy period or during the extension of the reporting period.  Many Lawyers Professional Liability Policies provide for a “free” retirement or non-practicing extension  of the reporting period (ERP) if the attorney has been with the carrier for the required number of years and meets other requirements the policy. ...

A Lawyers Liability Policy is a “claims made” insurance policy.  Once coverage ceases, so does your coverage for your past acts.  This is unlike an “occurrence” policy, such as a Business Owners Policy, where if you let the coverage lapse for a few days and start another policy there is only a gap in coverage for the days that the “occurrence” policy was not in force.  But with the "occurrence" policy you do not loose coverage for the time you h...

The “automatic” Extended Reporting Period (ERP) provision in the Lawyers Liability Policy does not extend coverage or provide a “grace” period for renewing coverage.  If your policy has this provision the only thing it does is extend the reporting period in cases where no other coverage is purchased.  If other coverage has been purchased then this provision does not apply. Even with this ERP in force, if you do not renew your coverage by the policy expiration d...

Question: I am told my Lawyers Professional Liability Insurance Policy has a “Hammer Clause”—what is a “Hammer Clause”? Response: There is no Lawyers Professional Liability policy that actually states or has a defined term for a “Hammer Clause”.  It is an insurance slang term referring to certain insuring agreements designed to force the insured to settle claims.  The clause contained in many Insuring Agreements or Defense & Settlem...

Many of the Lawyers Professional Liability Insurance Mutual Companies are licensed in very few states.  Some Mutual Insurance Companies are only licensed in their domiciled state.  Often times they required the law firm if they are going to accept clients in another state to get a 2nd policy for the other state.  We have actually had a few law firms have 3 policies in 3 different states. This problem is not just limited to the Mutual companies.  Many Stock Lawyers Professi...

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 th...

Regardless of whether you are moving your Law Office across town or out of state you should notify all of your property & casualty insurance carriers, this includes your Lawyers Professional Liability Insurance/Malpractice Carrier as soon as possible.  Do not wait until renewal to notify your insurance carrier and/or agent. As to your Lawyers Professional Liability Insurance, many insurance carriers will either cancel your coverage midterm or non-renew your Lawyer Professional Liabilit...

Lawyers Professional Liability Insurance policies are written on a “Claims Made” or “Claims Made and Reported Form” policy form.  This is unlike an “occurrence” policy in many ways.  One of the biggest differences is that with a “Claims Made” form the law firm will settle on the limits that are in-force at the time a claim is made not when the act occurs.  With an “Occurrence” form the claim is settled on the form that is...

Often law firms finance their professional liability insurance through a premium finance company.  It is a good way to manage cash flow.  Some law firms whether because of cash flow issues or poor procedures let their Lawyers Professional Liability Insurance go into cancelled status with the finance company for premium nonpayment.  The premium finance company as part of the agreement to finance a Lawyers Professional Liability Insurance is given a power of attorney to cancel the c...

Insured asks what is “Step Rating”?  Did not find term defined or mentioned in my policy. Response: Lawyers Professional Liability Insurance policies are written “claims made” policy form.   Most Claims Made Policies are Step Rated.  At policy inception of  a law firms 1st "claims made"  Lawyers Professional Liability Insurance policy there are no past acts to cover.  During the first few years of “claims made” coverage the...

While Lawyers Professional Liability policies do not have standard wording excluding attorney’s fees it is a common exclusion.  Normally attorney’s fees are carved out in the definition of damages. When examining the Lawyers Professional Liability Policy, this exclusion is not normally found in the exclusion section of the policy.   Frequently you will find this in the definition of “damages” or what is a “claim expense”.  The Medmarc Lawy...

Lawyers Professional Liability policies use no standard form.  Even though most policies are worded different, they generally cover the same risks and exposures.  But as the saying goes the devil is in the details.  Case in point is the definition of “an insured”.   Most polices cover current attorneys, employees and partners along with past attorneys employees and partners under the firm’s policy.  There are normally reporting requirements spelled...

A frequently asked question from solo attorneys is why they need a backup attorney in order to obtain their Lawyers Professional Liability Insurance Coverage.  The rationale for a solo having a backup attorney is to make sure that if due to unexpected circumstances the insured attorney cannot appear in for a court date or meet a client that (s)he as another attorney that can temporarily fill in to keep the practice going.   In larger firms, the assumption is that the law firm has ...

Question from Law Firm: Law Firm’s Managing Partner states, “My Travelers Lawyers Professional Liability Insurance Agent tells me that it is going to cost 3 times expiring to buy an Extended Reporting Period Endorsement (ERP or Tail).  Our law firm is merging with another firm and is required to have an ERP.  I am shopping for a better price.” Response: Right, wrong or indifferent, the best option for purchasing a Lawyers Professional Liability Insurance ERP is thr...

When completing the Lawyers Professional Liability Insurance application a frequent question is how to fill out the area of practice grid (AOP).  I suspect that it is frequently done incorrectly. For firms that are currently in operations for over a year: The Lawyers Malpractice application asks for your areas of practice for the past year in 1 of 2 different methods;either a percentage of billable hours for each area or a percentage of firm revenue.  Many attorneys are frustrated by...

Question from Attorney: Will you write a Lawyers Malpractice Insurance policy for me without prior acts coverage?  I currently have prior acts coverage and want to renew without any prior acts coverage and do not want to purchase a Tail or Extended Reporting Period Endorsement. Response: Attorney Malpractice Insurance or Lawyers Professional Liability Insurance is written on claims made basis.  Voluntarily renewing without prior acts coverage means that you have given up the protect...

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? Response: There is no one answer to this question.  One of the be...

Avoid fee disputes by explaining the fee arrangement in great detail during the first meeting. Confirm this understanding in writing and have the client agree by signing the agreement. When billing the client, ensure there is enough detail in the bill to allow the client to understand everything you are doing on their behalf. Use simple terminology and avoid abbreviations to make sure the bill is easily understood.   This re-post courtesy of Attorney Protective.  For other helpful...

The purpose of a Risk Purchasing Group (RPG) is to allow like risks to be able to purchase liability insurance on a group basis.  In 1981 Congress enacted the Products Liability Risk Retention Act that allowed the formation of groups to be formed to purchase liability insurance on a group basis.  This federal law superseded many state insurance laws that prohibited the formation of specialized exclusive groups to purchase insurance.  The law only applies to casualty or liability...

It is not a good idea to pick up an attorney’s past acts exposure for Lawyers Malpractice Insurance for a number of reasons: 1.       It immediately will increase the firm’s Lawyers Professional Liability Insurance premium.  Many Malpractice insurance carriers will add an attorney without prior acts at no cost midterm, if it is a multiple person law firm. Any change in premium will come at the next renewal.  With adding the attorney with prior...

Many Law Firms are reluctant to report claims made against them.  Many times the Law Firm feels that the Lawyer Liability Claim is small and they can cover it themselves and it will help their insurance history, thereby keeping their Lawyers Malpractice Insurance premiums low. This strategy of keeping your premiums low sometimes is a good idea with property insurance.  But not reporting a Lawyers Malpractice claim will put you in violation of the policy conditions.  The following...

Lawyers that choose to go without malpractice insurance believe that because they work for a small firm and maintain close relationships with their regular clients, that they are immune to claims. Other attorneys believe that the chances of them facing a claim aren’t great enough for them to purchase a lawyers liability malpractice insurance policy. The flaw in this logic is that small firm lawyers are just as likely to have a malpractice claim as some of their more high profile peers. M...

Often when asked why one attorney is paying more for legal malpractice then a colleague.   According to the attorney that is paying more the two attorneys doing the same thing, but they answer the same Lawyers Malpractice application very differently.  Many times the areas of practice are different from attorney to attorney.   Even with that stated there are other factors that can impact the cost of lawyer’s malpractice insurance:   1.    &n...

Many states have statutes that limit the time to file an action against a lawyer.  The statutes many times have statements in them when a person would responsibly know an error was made.  Or for example, in Michigan, plaintiffs have 6 years after the date the alleged malpractice was committed to bring suit regardless of when it was discovered.  So depending on the state the lawyer is practicing and the circumstances the statute of limitations varies widely. In some states, if the...

Insurance carrier loss runs are a report that shows what claims have been reported to the insurance company.  This is a report that is prepared by the claims department but can also be generated by many underwriters.   The loss run reports can show the claims, date claim made, when matter originated, amount reserved for claim (indemnity & expenses), amount paid for claim (indemnity & expenses),  and whether open or closed. It is standard operating procedure for gener...

Question from Attorney: I am still looking at alternatives for renewing my attorney malpractice coverage and cannot get firm terms until I get Insurance Carrier Loss runs from my incumbent carrier.  If I am a “few” days late renewing coverage is that going to be a problem?  There is a “grace” period anyway, right? Response: Letting your Lawyers Professional Liability Insurance Lapse can have consequences.  There is no grace period.  Some of the majo...

One area that law firms get caught on is completing the claims section of either the incumbent malpractice insurance carrier’s renewal application or a new business application with a different carrier at renewal.  “Prior Knowledge” of a claim is one of the leading causes for denial of Lawyers Professional Liability Insurance Claims. Failing to report potential claims can cost the firm: 1.       Failure disclosing a potential claim on the ap...

Attorneys are very intelligent creative people.  Lawyers Professional Liability Insurance Extended Reporting Period Endorsements (ERP or Tail) are expensive.  In trying to figure out ways to avoid buying a Lawyers Professional Liability Insurance Extended Reporting Period Endorsement and save money, Lawyers have come up with some very creative solutions. All are very bad ideas.  Here is one of many. A three member law firm decides to end their partnership.  The firm is split...

Another Law Firm that needed was being non renewed by their current Lawyers Professional Liability Insurance Carrier because of claims, severity, and frequency.  This combination meant that it was prohibitively expensive to find a Malpractice Insurance policy that covered their prior acts.  This 13 member firm was looking at premiums with prior acts of over $350,000 for a $1 million of coverage.  Without prior acts the premiums were around $125,000.  The extended reporting pe...

1st dollar defense (FDD) is sometimes called a Loss Only Deducible. What ever the name the meaning is the same.  Certain professional liability insurers for attorneys and accountants offer this coverage.   With FDD the insured is only responsible for the deductible if there is an indemnity payment required on the claim.  Without FDD the deductible is due as claims expenses or indemnity payments are incurred.   If the claim that is made results in no indemnity paymen...

Attorney Asks: Why did the attorney malpractice premium not go down at renewal?  I decided to switch to all criminal work which I know is a lower risk area of practice, but the renewal application only wants to know what was done in the past year.  I told carrier that I want the practice areas changed to criminal anyway.  I want a lower rate this year. Response: The Lawyers Professional Liability Insurance renewal application is meant to capture what was done on retrospective b...

Many people think that there is a separate policy issued once “Tail” is purchased on a Lawyers Professional Liability Insurance Policy.  This is not the case.   Generally the endorsement is just one sheet of paper and only one or 2 paragraphs long.  There is not a separate policy that is issued.  The Extended Reporting Period Endorsement (ERP/Tail) is attached to the last in force policy at the time coverage was terminated.  Other than amending the repor...

Question from Attorney: Why do I need prior acts coverage for Attorney Malpractice Insurance?   Response: Lawyers Professional Liability Insurance is written on a “Claims made” policy form.  “Claim made” coverage in its purest form would only provide coverage for covered acts that that occurred and were reported during the policy period.  Generally the policy period for Attorney Malpractice is written on an annual basis. Many Attorney Malpractice erro...

There are many different deductible options; some are packaged into the policies some are provided as an additional charge. 1.       Zero Dollar Deductible—this is listed 1st, as with a zero dollar deductible the options list after this do not apply.  With a Lawyers Professional Liability Insurance true zero dollar deductible option, once a claim is presented, the firm has no out of pocket costs for the deductible, whether for claims expenses or indemnit...

While sharing a case can be in the best interest of the client be cautious about making sure you document the relationship.  Any time a law firm shares a case with another attorney or refers a case out to another firm, the original law firm continues to have exposure for this case.  Numerous courts have allowed plaintiff attorneys when pursuing attorney malpractice claims to include all attorneys and law firms that have touched a case.  It is important to document with the clien...

Attorney Malpractice Insurance Carriers that are not licensed to write in all states will decline to write coverage for Law Firms that have clients in states that the insurance carrier is not licensed.  With some carriers, even one client in the wrong state will be cause for a declination to issue a policy. The reasons for this are: 1.       Attorney Malpractice carrier generally do not have panel counsel in that states not licensed 2.    ...

Unfortunately, we get asked this question way too often.  Attorney either represented the abusive litigant in an action or filed against the litigant.  Either way attorney gets dragged into the web of the malpractice claimant, who may have filed against every judge and state or federal official. Although the case is clearly frivolous, attorney needs to let attorney malpractice insurance carrier know.  By not letting the carrier know, attorney may open up defenses the malpractice...

Sometimes disputes happen between attorneys in a law firm.  Even to the point of filing malpractice claims against each other.  Lawyers Professional Liability Insurance policies are not intended to cover these disputes.  The typical exclusion for this is the type found in the current AXIS Insurance Company Attorney Malpractice Policy: “5.Insured versus Insured.  For the purpose of this exclusion, the term “insured” shall mean “you.” This policy...

All insurance carriers look at 2 things regardless of line of business when setting rates; frequency & severity.  Lawyers Professional Liability Insurance carriers do not have the law of large numbers always in their favor when setting rates.  An auto insurance carrier potentially has millions of risks to evaluate the different costs of coverage and the causes of loss.  With claims made coverage attorney malpractice policy, individual carriers may not have enough risks to prec...

How do Attorney Malpractice Claims begin?  When a client expects one result, but gets another result, it’s not uncommon for a client to sue or allege attorney malpractice.  What can you do to help protect your law firm from legal malpractice claims?  When explaining the services that you will provide to the client, never leave what legal services will be provided open to interpretation.   Strong communication is the best way to ensure that client expectations are set p...

The best attorney in the world can still end up with an attorney malpractice claim by taking the wrong client or case.  Every firm needs to have a client intake procedure that they use for every new client and case.  It is best to have a written plan that everyone in the firm follows.  Once the procedure is in place the law firm needs to stick with the plan.  Even though it is the hardest word to tell a prospective client, the attorney sometimes needs to say “no&rdquo...

Attorney Malpractice Insurance and Accountant Malpractice Insurance are written on a claims-made basis.  One of the issues is when should a claim be reported and to which insurance carrier on a claims-made policy.  The liability portion of your Business Owners and Workers Compensation policies are written on an occurrence policy form.  Again the question arises as to when to report a claim and to whom.   The 1st time purchaser of a claims made professional liability in...

Before a solo attorney starts to practice law in his or her new law firm, the attorney needs to address the business of a law firm.  Attorneys need to realize that a law firm is a small business.  And as with any small business it needs to have a written business plan.  Why put the plan in writing.  Generally people that put plans in writing tend to follow the plans more closely and are more successful.  The plan should not be a static document; it needs to be reviewed, ...

While it is one of the more boring things to do, properly completing the Lawyers Professional Liability Insurance application is very important.  While this process takes away from billable hours, if done incorrectly it can lead to having claims denied, the law firm being non-renewed, or if the error is material enough coverage rescinded. It is perfectly permissible to have an “assistant” complete the application, but the partner that is signing the application needs to thoroug...

For a solo attorney, once the attorney is suspended from the practice of law, the lawyers professional liability insurance carrier will not renew insurance coverage.  The attorney malpractice insurance policy covers the work of a licensed attorney.  It a matter of public policy that insurance carriers cannot write insurance coverage where there is no exposure.  As the suspended attorney cannot practice law, the policy will not provide any ongoing coverage for acts done by the atto...

The Wisconsin State Bar Board of Governors approved a succession planning registry after death or disability.  http://www.abajournal.com/news/article/who_will_take_over_your_law_practice_wisconsin_lawyers_can_name_a_successor This registry is a positive move in terms of helping small firms plan out a clean succession in the event of unexpected circumstances, but you dont need to have an official registry in place to protect your clients. Just as you distribute your assets and name hei...

CEOL stands for Claims Expenses Outside the Limits.  The purpose of CEOL is to provide additional coverage for claims expenses to help preserve the primary limit of liability.  The other option is Claims Expenses Inside the limits (CEIL).   With CEIL, every dollar used for claims expenses reduces the liability limit by a dollar.  Once the limit of liability is exhausted, either by payment of claims expenses or an indemnity payment, the obligation of the malpractice insur...

Most attorneys understand that if they have an actual claim made against them or a lawsuit filed that they need to notify the insurance carrier immediately.  It is also important for the attorney to know when they should put their professional liability insurance carrier on notice for a potential claim.  Failing to report a potential claim may result in coverage being denied after the potential claim turns into an actual claim at a later date.  To avoid this issue make sure that a...

This is an excellent article came from the Surplus Lines Association of Illinois describing Surplus Lines insurance carriers: In order to understand what surplus line insurance is, it is helpful first to understand a few things about the insurance marketplace and to understand what surplus line insurance is not.  The first player in the marketplace well discuss is the insurance company, sometimes referred to as an insurance carrier or insurer. The insurer is the company that actually writ...

Approximately twenty-five percent of legal malpractice claims result from calendaring issues, such as failure to know a deadline, failure to timely file, failure to record in a calendar or failure to respond to a calendar reminder.  Because a missed deadline is a basic procedural error, many lawyers professional liability insurance carriers will not provide quotes even if the law firm has no claims. A law firm should use calendaring for all projects, events and deadlines.  It should b...

One of the leading causes of lawyers professional liability insurance claims are conflicts of interest. Beyond representing both parties in a proceeding such as a divorce, there are many hidden conflicts that can cause a law firm problems.  Not finding conflicts can lead to loss of clients, loss of fees, disciplinary issues and attorney malpractice claims.  Lawyers need to consider not only actual impropriety, but the appearance of impropriety when determining when to engage a client. ...

Suits for fees are one of the leading causes of attorney malpractice claims.  Some studies suggest that 33% of all malpractice claims are due to fee suits.  The larger the percentage in over 90 days past due, the more likely the firm may have other issues when they try to collect the past due amounts that can lead to attorney malpractice claims.  Even though certain types of law practices have more issues with being paid, i.e. divorce work, there are steps that law firms can take ...

Don’t give informal legal advice to friends or family. It can be tempting at a party or family event, but it could be harmful to both yourself and the receiver of the advice. Your advice, given casually, may be less well thought-out than usual, or not backed by needed research. Also, you could be creating a conflicts issue for yourself by giving advice to a person who has not been through a conflicts of interest check first.  Courtesy of Attorney Protective Tip of the Month:  ...

Depending on the type of practice an attorney has, the Law Firm could be carrying large balances in Escrow and IOLA accounts.  With smaller law firms, the firm may be relying on a “trusted” employee to manage the funds, balance the accounts, deposit funds and write checks.  Unfortunately this “trusted” employee can be the cause of loss in this account.  This loss could be from employee theft or from someone outside the firm duping the employee or an attorne...

Overview of Engagement Letters Engagement letters confirm the representations scope setting forth the parties’ responsibilities, billing rates/contingency agreements and expense costs.  Engagement letters should discuss the scope and  limits of the firm’s representation. The engagement letter should memorialize the bounds of the firm’s actual representation. For instance, if the law firm has no intention of pursuing appeals on behalf of its client, then the letter sh...

Attorney Malpractice carriers have found that the use of non-engagement letters/disengagement letters can reduce Lawyers professional liability insurance claims.  Attorney Malpractice Insurance carriers have defended and paid on claims where the client alleges that the law firm was still representing them when the law firm thought they were no longer providing representation or  where the prospective client claims that the law firm was representing them in a matter, when the firm thoug...

Many law firms and accounting firms are still spending thousands of dollars on closed file storage.  Some firms literally have tens of thousands of bankers boxes of closed client files in warehouses, basements, storage buildings, office space and garages.  We are asked many times how long do we have to keep the closed files. The best place for the answer on file retention will reside with your local and state bar or accounting associations as every state has different requirements. M...

Attorneys continue to be confused with claims-made coverage as to if a claim is covered. If the coverage is not in force at the time a claim is made there is no coverage. Some attorneys assume that claims-made coverage is like an occurrence policy in that if a covered act occurred during the time that coverage was inforce you can make claim at any time in the future.   This is not true. Recently an attorney called that had their coverage cancelled for nonpayment of premium and wanted ...

The exposure to law and accounting firms threatening their very existence from Cyber Crime has never been greater.  Questions you need to answer is that if you have the things that cyber criminals want, do you have insurance coverage to protect you in cases where cyber criminals take? Information that cybercriminals want: Payroll Account Information- Think of the data contained in your payroll accounts; names and address of all employees, their social security numbers and birth dates.&n...

Around the world things happen.  A bad wind can blow through your law firm or accounting firm.  Daily there are reports of people and regions around the world devastated by unforeseen unpredictable events – natural disasters, fires, storms, floods and earthquakes, along with man made disasters of cyber attack, terror attacks and/or power outages. Accounting and Law firms cannot afford to take a “wait and see” attitude to this reality.  The crippling business impl...

Ransomware encrypts computer files and is used by hackers who then demand money in exchange for freeing the content.  It is becoming a huge problem globally.  The costs of unlocking data varies, with individuals typically paying a few hundred dollars to a few thousand for businesses. In May, the FBI issued a warning saying that the number of ransomware attacks had doubled in the past year and was expected to grow even more rapidly this year.  It said that it had received more tha...

We are often asked to provide the AM Best Ratings for various carriers.  Thought there might be an interest in the comparability of the different rating services ratings.  The attach details that differences between the rating services ratings, IE “A”  is not equal.   The attached white paper details the differences.   White Paper on Insurance Carrier Rating Services  

This is not an all-inclusive list.  It is a start for a law firm or accounting firm that is purchasing malpractice insurance for the 1st time, evaluating current coverage, or contemplating switching Professional Liability Insurance Carriers.  People new to Malpractice Insurance coverage are very surprised to learn that there is no standard policy form.  Every Insurance carrier has a different policy form and policy definitions from one carrier to another are not the same.  Ju...

Crime Insurance is a property coverage, not a liability coverage.  Lawyers Professional Liability Insurance is intended to coverage  attorney malpractice liability claims.   Don’t expect that a theft of funds will trigger a malpractice claim.  Many law firms that have been told they need crime insurance decided not to get it because they feel their attorney malpractice policy will cover, this may or may not be the case.  It is important to have adequate covera...

Many law firms and accounting firms know that they need professional liability insurance to protect them for malpractice.  But many firms neglect the business side of their practice.  BOP stands for Business Owners Policy.  It is a prepackaged policy specifically designed to meet the needs of small to medium sized businesses.  This makes it more cost effective and simpler for law firms and accounting firms to purchase the needed protection then buying these coverages separate...

Attorney Malpractice Insurance is not like homeowners, auto, or business insurance.  You need an agent that is trained and experienced in Attorney Malpractice Insurance.  Here are a few of the reasons: 1.       Most of the Malpractice Insurance carriers are not companies that many people know.  Few advertise.  Even if they are household names, it is likely that it is a subsidiary that is selling the insurance.  An experienced Malpractice Ag...

Policy premium and the policy forms are very important when selecting a Professional Liability Insurance policy.  But there is much more that an Attorney or Accountant should be concerned about when selecting a malpractice insurance carrier. A few of the items that you need to consider are: 1.       What is the AM Best Rating and size of the Malpractice Insurance carrier?  The financial stability of the insurance carrier is very important.  Any Malp...

There are a number of things that need to be maintained if you switch professional liability insurance carriers.  Some of those items are: 1.       Make sure the effective date of the replacement policy matches the expiration date of your current coverage.  By convention, all policies expire on 12:01am and new policies are all effective at 12:01am.  When you make sure that the expiration date matches the effective date, there is no overlap or gap in ...

As with any insurance policy, you first see what is covered, the next thing you need to look for is what is not covered.  Attorney professional liability insurance policies are not standard, so making the assumption that every Attorney Malpractice Insurance policy is the same; as the saying goes will make an “Ass out of You”.   Worse yet, if a claim is reported on an excluded item, you will get a response from the malpractice insurance carrier’s claims department...

Travelers Insurance has developed the following “Pressure Test” for your Cyber Risk.  In addition to the test questions, it also provides many helpful hints for managing the Cyber Risk.  Take the test.  Either click on or cut and paste the following link into your browser to see where your firm stands: https://www.travelers.com/quiz/cyber-security/cyber-risk-pressure If you want help with your Cyber Insurance needs, please contact L Squared Insurance Agency.  We...

AttPro Risk Tip of the Month Suing your client for fees often results in a counterclaim for legal malpractice. Try to resolve the issue with good communication with the client. If you need help, some bar associations offer fee dispute resolution assistance. Proactive measures at the start of the relationship, including a financial screening and a detailed explanation of fees in writing, will help to prevent fee disputes.   You can see more useful information at their website:  ww...

All Lawyers Professional Liability Insurance Insuring agreements are not created equally.  The insuring agreement also may be given another heading such as “defense and settlement”  or another similar name.  This plus additional coverages section(s) will tell you the attorney malpractice policy coverage intent.  The items to look for in an insuring agreement: 1.       Is the policy a duty to defend or reimbursement policy?  Almo...

An important and sometimes overlooked item is what are the entities that are actually insured under the Lawyer Professional Liability Insurance Policy?  Generally Attorney Malpractice Insurance policies are written on behalf of the named insured firm and all of the attorneys that work for the firm are insured for the work that they do for the firm.  This simple concept if violated can cause problems at claim time. If a firm has an attorney malpractice policy, it is important for the...

Once you have made sure that all of the entities that should be covered are covered, you understand the insuring agreement, and the policy exclusions, there is one more important step.  You now know some of the What or in the case of the policy exclusions, what not; Where; and When; but you still need the Who and the rest of the What.  So who in your law firm is covered by the lawyers professional liability insurance and for what acts.  It is very important to look that the policy...

Attorneys love to publicize success stories.  Posting about recent victories can valuable marketing tool to generate new clients.  With an attorney a success story can often disclose details regarding clients, which could raise client confidentiality concerns. In a recent action a board of attorney ethics filed a complaint against an attorney who publicized information regarding his representation of a client.  The attorney’s article was about a discrimination cas...

You would never think to let your law firm go without attorney malpractice insurance.  Workers Compensation insurance is required by law for your employees.  A Business Owners Policy is there to protect your property and general liability exposures.  But for certain special events, there may be no coverage. Business functions such as client dinners and parties can have a significant impact on the success of your law firm. Whether an event is used to: 1.    &...

Approximately twenty-five percent of legal malpractice claims result from calendaring issues, such as failure to know a deadline, failure to timely file, failure to record in a calendar or failure to respond to a calendar reminder.  A law firm should use calendaring for all projects, events and deadlines.  To prevent delays and missed deadlines, supervisory attorneys should perform a workload analysis of subordinate attorneys on a frequent basis. Many Attorney Malpractice Insurance C...

POSTED AUG 11, 2016 03:12 PM CDT BY DEBRA CASSENS WEISS A South Carolina ethics opinion on fee-sharing highlights a potential obstacle for Avvo’s fixed-fee legal referral service, launched this year in 18 states. The July 14 advisory opinion—which describes a payment setup like the one used by Avvo Legal Services—is bad news for Avvo, according to Law Sites by Robert Ambrogi. Avvo’s service matches lawyers willing to provide defined legal services ...

1. Are you responsible for the Building you are in?        Own the Building        Rent the Building ___ Condo ownership ___ Office in residence   2. Are you responsible for the Permanent Attachments to the building, Fixtures, and Equipment for servicing the premises:          Not responsible rent ___ Responsible for common areas and rent ___ Responsible for improvements in condo owners...

Travelers Insurance wrote the general Liability insurance policy (CGL) and Chubb wrote the Cyber coverage for PF Chang.  Chang had a data breach where 60,000 credit card numbers were stolen.  It promptly filed claims with Travelers & Chubb for coverage. Law firms that argue that their (CGL) will cover a Cyber breach should look at PF Chang v Federal.  Travelers obtained a declaratory action to extricate itself from this claim, so there was no coverage under the Travelers&rsqu...

Many Law Firms and other small organizations are concerned about outside threats of theft.  The outside thefts are well publicized by the media.  But there is a dirty little secret that small entities ignore.  People are surprised to learn the number one cause of theft for most small organizations is their own employees.  These thefts can bankrupt a small organization if uninsured or underinsured. Hiscox Insurance Company writes Crime Insurance and Cyber/Data Theft Insurance...

Choosing lawyers professional liability insurance is one of the most important decisions you can make for your firm. The following are some helpful tips:   1.   Evaluate the whole program Keep in mind the carrier is a very important piece, but not the only piece. You need to evaluate the entire program. Coverage and price aside are not the only consideration.  Make sure to consider the insurance broker’s and insurance carrier’s track record, stability, risk con...

With non E&O commercial insurance it is normal practice for Insurance carriers to require loss runs to provide a quotation.  Insurance carrier loss runs are a report produced by an insurance carrier that provides information on all claims that have been reported to an insurance carrier during the time that the insurance carrier provided insurance coverage.  With Lawyers Professional Liability Insurance the loss runs not only include actual claims paid, but incidents that may not ev...

An important part of managing your attorney malpractice exposure is getting the proper Legal Management Software.  The proper system software coupled with the procedures and standards being integrated into the software can go a long way in preventing a professional liability insurance claim. You may think your work is done because you have selected your new legal software system, the contract is signed and the check for the deposit of the system has been sent.  You are happy about the...

We work with many distressed firms to place Lawyers Professional Liability Insurance Coverage.  Most of the time the firm is in the distressed or surplus lines market because of claims.  Distressed firms depending how much work they are willing to put into the disclosing claims information can end up paying dramatically different premiums for basically the same type and cost of claims. How would this happen.  One of the biggest problems with working with a distressed firm is gett...

It is not always in the best interests of a solo attorney to switch attorney malpractice insurance carriers if they are close to retirement.  The savings of a couple of hundred dollars could cost them thousands of dollars later.  See below for the attorneys inquiry and L Squareds response: Information from attorney I received  your inquiry  regarding lawyers  professional  liability insurance  sometime ago.  I recently went  thr...

In the case of Westport Insurance v Mylonas, the attorney finds out true cost of not buying high enough Attorney Malpractice Liability Insurance Limits.  First the Pennsylvania State court stated that coverage was limited to $500,000 in 2015.  Now the US District Court of Pennsylvania has affirmed that decision on summary judgement. Westport issued a legal malpractice policy to the Law Offices of Peter George Mylonas, P.C.  Westport defended Peter Mylonas and the firm in a state ...

Every month or so we have a Law Firm that we insure that has hired a Suspended Attorney, one that was recently suspended or had other disciplinary actions.  While it is the firm’s prerogative to hire anyone they want, they should know about the disciplinary actions prior to making an offer. Some of the recent issues are: 1.       Law Firm hired an attorney that was currently suspended from the practice of law.  Law Firm is slow to notify us, L Squa...

Colorado Attorney agreed to aid in negotiating a judgement obtained against his in-laws.  The in-laws live in Minnesota where a judgement was obtained against them for $2368.13 in favor of a condominium association. The Colorado Attorney sent e-mail to the Minnesota Attorney that represented the condo association stating that he was representing his in-laws in this matter and to send all future correspondence to him.   A number of e-mails were sent back and forth on this matter b...

As we go through the year, many attorneys that had been with National Union (AIG) for the attorney malpractice had stayed with them to take advantage of the “free” Non-practicing Extended Reporting Period Endorsement (ERP).   We continue to get ongoing questions concerning AIG’s withdrawal from the Lawyers Professional Liability Insurance market.  The following are concerns that many attorneys getting close to retirement have when they take advantage of the &ldqu...

Please see the answers to your questions below. I know that this can be frustrating, but the extended reporting period provisions of any carrier’s lawyers professional liability insurance are an area that no insurance carrier will modify.  There are many reasons that extended reporting period options are exercised and if a carrier made a concession to one firm it would need to make these concessions open to other firms with different circumstances.  As such insurance carriers st...

Ohio recently passed a medical marijuana law.  Many attorneys were submitting inquiries about the ethics of attorneys being able to provide legal services to medical cultivators, processors and dispensaries or clients that wanted to do business with these entities. The Board of Professional Conduct of The Ohio Supreme Court recently stated that Ohio attorneys are prohibited from counseling or assisting a client to engage in conduct that the lawyer knows to be “illegal” under an...

Many attorneys are very frustrated when they 1st breach the subject of using the “free” non-practicing Extended Reporting Period Endorsement (ERP or Tail) with the Attorney Malpractice Agent.  If the agent tells them the cold “truth”, it can change the attorney’s plans about how and when to retire.  The farther in advance of the contemplated retirement date that this discussion happens the better.  The ERP provisions are some of the most misunderstood...

As with many terms with Professional Liability Insurance, there is not common meaning to the term.  “Full Prior Acts” is a term that is often misunderstood. Many insureds assume that “Full Prior Acts”, actually means that the insured attorney is covered from the inception of their practice.   While this might be true, it is not always the correct assumption.   First you need to understand that for Lawyers Professional Liability Insurance the poli...

Career Coverage is offered by some Attorney Malpractice Insurance carriers.  This is usually done by a endorsement to the current firm’s policy or a separate standalone policy. The purpose of Career Coverage is to offer prior acts coverage for work done by an individual attorney prior to their association with the current law firm.   The reasons an attorney may want this coverage is: 1.       To cover past acts if their old firm may not have c...

All attorney malpractice policies sold in the United States are claims made policies.  Conceptually the carrier that is on the risk is the carrier and policy form that will defend the insured should a claim be made during the policy period.  This is providing that the act occurs after the prior acts date. Some lawyers professional liability insurance carriers also have a “knowledge date” in addition to a prior acts date for their claims made coverage.  While conceptua...

We continue to be approached by attorneys that are close to retirement that are “shopping” their professional liability insurance.  In fact yesterday we had two such occurrences from solo attorneys close to retirement.  Both it appears had qualified for “free” Non Practicing Extended Reporting Period Endorsements (ERP) with other competing insurance carriers.  While we love to write new clients, L Squared tries to do what is in their best interests, which i...

There appears to be many mistaken beliefs about what is and is not covered when a firm has an of counsel attorney working for them.   And believing something is covered versus being covered are two different things. Of Counsel doing no work for the law firm We continue to come across law firms’ lawyers professional liability insurance policies that have of counsels listed that do no work for the firm. When this relationship is queried further the expectation is that all work do...

We are frequently asked why with an Attorney Malpractice policy they cannot purchase a Commercial Umbrella Insurance policy or already have an Commercial Umbrella Policy that they purchased from their Business Owners Insurance carrier or a separate standalone Commercial Umbrella Insurance Policy to cover the law firm for higher legal liability limits beyond the law firm’s Lawyers Professional Liability Insurance Policy?  The simple answer is that a Commercial or Personal Umbrella Insu...

All law firms should carry a business owners and commercial auto policies to protect your assets from the business side perils of your law firm, ie property damage, general liability, business interruption insurance, personal injury protection.  These commercial insurance policies exclude the practice side of your law firm. Lawyers Professional Liability Insurance are written on a claims made basis.  These Attorney Malpractice Insurance policies protect for errors and/or omissions co...

We blogged about this a few month ago, but are still getting questions about whether a malpractice policy has an “innocent Insured” clause and what does it mean.  There seems to still be a misunderstanding as to the meaning and intent of this clause in a policy. Deliberate or illegal acts are normally not insurable either by rule of law or the insurance language in a particular policy.  But what happens when a firm member commits an act that is clearly illegal or deliberat...

Normally attorney’s fees are not covered by a Lawyers Professional Liability Insurance Policy.  The reasoning for this is that the awarding of attorney’s fees by the court is meant to punish the attorney.  It is also meant to discourage attorneys from engaging in similar conduct in the future.  Attorney fee awards can be substantial, easily in the hundreds of thousands of dollars. As attorney malpractice insurance policy are not standard, usually this exclusion is eit...

Many law firms do not answer these questions correctly on the Lawyers Professional Liability Insurance application.  Some law firms might perceive this to be no big deal.  When not answered correctly, it could lead to claims being denied (an extreme case), but likely additional underwriting questions and/or a premium that may be much higher or lower than it should be. For instance, if the law firm puts down on the area of practice grid year after year that the only thing the firm does...

  Malpractice Insurance—Coverage for Sanctions There is no coverage for sanctions or fines under a Professional Liability Insurance policy.  In most cases sanctions or fines would not be insurable anyway.   Sanctions and/or fines are meant to punish the individual and insurance policies are not meant to cover or make “whole” an individual that has committed these acts. The Axis Lawyers Professional Liability Insurance policy excludes the sanctions or fine...

Although it comes up infrequently, occasionally you will receive a Subpoena.  Even though it is a benefit in many policies this is a 2 edge sword.  Responding to the subpoena without notifying your malpractice insurance carrier could down the road lead to a malpractice claims denial.  Many Professional Liability Insurance policies offer Subpoena Assistance that is not related to a case you are currently handling or a malpractice claim that your carrier is currently defending.&nb...

All Lawyers Professional Liability Insurance policies sold in the USA are claims made policies.  This continues to be an issue that comes up time and again with attorneys that falsely believe if they let their coverage lapse that past acts will be covered by the lapsed Attorney Malpractice Insurance Policy.  Nothing can be further from the truth.  Once claims made coverage lapses, if there is not an extended reporting period endorsement, there will be no carrier to report a claim ...

One of the most preventable attorney malpractice claims is a statute of limitations claim.  The initial steps at client intake can help avoid or minimize your risk of being sued. The firm needs at intake determine if the firm is bumping up against a statutes of limitation issue. As best as possible determine that you are not walking into a blown statute claim.  It is important that the attorney gather and read any contracts (including insurance policies, employee handbooks, etc.) that ...

The world has changed in the past few years.  All of us think nothing about tweeting or posting about what we did, what we saw, what we ate or how we feel almost as soon as it happens.  Sometimes if makes us feel good to air publicly arguments or disagreements when we perceive that we were treated unfairly.  While this is all well in good in our personal social life, it can have consequences for attorneys when it is a client matter. Attorneys have a duty to keep client matters co...

We are occasionally asked what would constitute a “deliberate act” under an attorney malpractice policy that would be excluded from coverage.  Gaining an advantage at any means will likely lead an attorney down this path.  Here are some deliberate acts in the extreme. While tempting when trying to gain an advantage over opposing counsel, hacking into another law firm’s confidential client files getting opposing counsel arrested is crossing the line.  In addition...

While is seems like our presidential candidates can state virtually anything to win the election.  Attorneys representing clients are held to a higher standard.  This issue was addressed by the California Standing Committee on Professional Responsibility & Conduct for a hypothetical case. Statement of Fact Plaintiff is injured in an automobile accident and retains Attorney to sue the other driver (Defendant). As a result of the accident, Plaintiff incurs $50,000 in medical expens...

L Squared does not charge a policy fee on any admitted insurance policy product.  The only fees that it does charge are on surplus lines accounts for filing fees.  Unfortunately, L Squared has to pass along the policy fees, Risk Purchasing Group (RPG) fees and Risk Retention Group (RRG) fees that many of the insurance providers that L Squared works with charge.  In addition, many of L Square’s retail competitors also charge fees for their insurance services in addition to th...

As the law firms try to address their costs by avoiding hiring new associate attorneys many firms have turned to hiring contract attorneys either on a short or long term basis.  This has advantages to the law firm by being able to take on more legal work without having to permanently increase its fixed costs.  Right, wrong or indifferent, many contract attorneys work for much less than associates attorneys in the firm when you add the costs of benefits, payroll taxes and workers compen...

The general public commonly believes that attorneys rarely get sued.  By one estimate 1 in 20 private practice attorneys face a legal malpractice claim each year.  Other estimates are that a private practice attorney can face 3 malpractice claims during their careers.   So whatever the statistics attorney malpractice claims do happen and happen with frequency. The current ABA study as in past studies state that 1 in 5 attorney malpractice claims are the result of calendaring...

Administrative errors involving statute of limitations issues are one of the most common attorney malpractice claims.  By one estimate at least 1 in 5 attorney malpractice claims involves a statute of limitations issue.  While determining the statute in a given state is relatively easy.  Applying it to the facts involved can be tricky.  In addition to applying the statute, the attorney must know and understand the contract that may or may not also apply to the statute. In th...

This time of year there are many attorneys that are forming new practices, either for the 1st time as a new in practice attorney or coming from a larger firm.  Here are a couple things to remember when completing attorney malpractice applications: 1.       Attorney Malpractice is written for the firm.  Even if you are a solo attorney you are a firm of 1.  As such the application needs to be answered in that context. 2.     &...

PHOENIX — Laurence "Kirk" Nurmi, who was dragged to the depths of social-media infamy for representing killer Jodi Arias during her two highly publicized trials, has signed an agreement to be suspended from practicing law for four years because he published a book about the case.Late last month, the Attorney Discipline Probable Cause Committee of the Arizona Supreme Court authorized the State Bar of Arizona to file a formal complaint against Nurmi. Rather than face a disciplinary hearing a...

Earlier this year we blogged about a Pennsylvania attorney that had been sanctioned for $1 million for “egregious tactics”.  As we mentioned sanctions are not generally covered by Lawyers Professional Liability Insurance policies.  The good news for Pennsylvania insurance defense attorney Nancy Raynor is that the $1 million sanction has been overturned.  The bad news for her is that the trial judge’s decision to award $45,000 in attorney’s fees and costs to...

Suing a client for unpaid fees is usually a bad idea.  Yes an attorney can wait till after the statute has run, and yes this may prevent a counter claim or at least provide a defense.  But no it will not prevent a bar complaint from being filed and if done with any frequency will likely have an impact on your attorney malpractice premiums. We have heard all of the arguments for suing clients for fees: 1.       I do not want to work for free 2. &nbs...

According to an article in the Insurance Journal the California Bar Wants to Ban Sex Between Lawyers & Clients.  While many states have such a ban, California has yet to catch up.  For more information concerning this click on California Bar Proposed Sex Ban.

In OneBeacon Insurance Co. v. T. Wade Welch & Associates, the 5th Circuit affirmed a $28 million judgement for bad faith ruling that the One Beacon "prior knowledge" exclusion did not apply. As with many Lawyers Professional Liability Insurance policies OneBeacon issued a series of professional liability policies to T. Wade Welch & Associates beginning in December 2006 with a January 5, 1995 prior acts date. In the application for the first policy, Wade Welch, the principal ...

Attorney Question: “Do you have coverage for Fraudulent Wiring Instructions?” Response: This can be a significant exposure to a law firm or title agency.  Unlike in the past, now just by hitting a button, you can send millions of dollars out of your Trust account.  This has sped up commerce, but it does have a dark downside.  Many Law Firms and Title Agencies have fallen victim to being scammed out of the funds by transferring the funds to a fictitious account. Wh...

According to one ABA report 23% of law firms didn’t know if they had a data breach.  This is a troubling statistic in that another ABA report stated that around 15% of all law firms have had a data breach.  Today it is not so much “if” your law firm will have a data breach, but “when.”  Will your law firm be prepared that handle the data breach or will your firm be in the 23% of the firms that do not even know whether they have had a data breach. Att...

The declarations page outlines the key elements of your malpractice insurance coverage (LPL).  Even though there is no standard LPL policy at a bare minimum checking the items listed below is essential.  If you read nothing else, read your declarations page.  Key items to review are: 1.       Name of the insurance carrier that is writing your coverage should be listed. 2.       Terms of coverage—The LPL declaratio...

According to NBC News and The Wall Street Journal,  a Minnesota Federal grand jury indicted lawyers Paul Hansmeier and John Steele of trying to extort money from victims who uploaded X-rated files to file-sharing sites Basically the shakedown stared by getting the internet addresses of the people that downloaded the X-rated movies.  Once they had the internet addresses they would file a copyright infringement lawsuit against “John Does" to obtain the names of their victims....

We have covered this in the past, but the question continues to come up.  A case in Alaska, ALPS v Ingaldson Fitzgerald PC, is another example of the courts refusing to force an insurance carrier to cover attorney’s fees. Awarded attorney’s fees normally are not covered under a Lawyers Professional Liability Insurance policy.  Included under this category of damages are also civil or criminal fines, sanctions, or penalties ordered by a court or other administrative body.&n...

Background: This firm had 6 attorneys at the beginning of the policy year and is going to dissolve on December 31, 2017.  The firm is planning on purchasing a 1 year Extended Reporting Period Endorsement (ERP) for the firm.  Their current carrier Medmarc Casualty’s policy allows the purchase of individual attorney and firm ERP’s.  Medmarc allows 60 days from the date of coverage termination to purchase an ERP. (Note all malpractice insurance carriers are different on ...

This scam was done the old fashion way and brought in over $1.66 Million.  Artashes Darbinyan and Orbel Hakobyan admitted to running a mass mailing scam through companies called Trademark Compliance Center(TCC) and Trademark Compliance Office (TCO).  According to the Justice Department Website Link:          “The scam involved fraudulent offers  of a service in which TCC and TCO promised to monitor an applicant’s trademark for infringing marks...

Background: This firm had 6 attorneys at the beginning of the policy year and is going to dissolve on December 31, 2017.  The firm is planning on purchasing a 1 year Extended Reporting Period Endorsement (ERP) for the firm.  Their current carrier Medmarc Casualty’s policy allows the purchase of individual attorney and firm ERP’s.  Medmarc allows 60 days from the date of coverage termination to purchase an ERP. (Note all malpractice insurance carriers are different on ...

Background: This firm had 6 attorneys at the beginning of the policy year and is going to dissolve on December 31, 2017.  The firm is planning on purchasing a 1 year Extended Reporting Period Endorsement (ERP) for the firm.  Their current carrier Medmarc Casualty’s policy allows the purchase of individual attorney and firm ERP’s.  Medmarc allows 60 days from the date of coverage termination to purchase an ERP. (Note all malpractice insurance carriers are different on ...

It is not uncommon for opposing attorneys to exchange during discover on a case.  In today’s world more and more of it is done in an electronic form.  Sometimes in its native electronic form that include metadata such as the document author, dates of creation-alteration and where the document was stored.  Attorneys must be careful not to disclose confidential information outside of the permissible discovery by disclosing confidential client information in the metadata.&nbs...

Attached is Money’s list of the top 20 richest Lawyers.  A few of  the top richest lawyers have been disbarred and/or may have gone to prison.  But if you do not mind being disbarred or going to prison, a few of these attorneys near the top of the list show that crime does pay.   At #1 is Richard Scruggs, estimated worth is $1.7 Billion.  Even though he went to federal prison for 6 years, he seems to have retained his money.   At #4 on the list ...

Attached is Money’s list of the top 20 richest Lawyers.  A few of  the top richest lawyers have been disbarred and/or may have gone to prison.  But if you do not mind being disbarred or going to prison, a few of these attorneys near the top of the list show that crime does pay.   At #1 is Richard Scruggs, estimated worth is $1.7 Billion.  Even though he went to federal prison for 6 years, he seems to have retained his money.   At #4 on the list ...

How do Attorney Malpractice Claims begin?   Clients do not like to be ignored by their attorneys.  When a client calls, e-mails, texts or mails a letter, they expect a prompt response.  Given how connected the world is today with being able to texted or e-mail at any time or day, even one or two days without a response from their lawyer can feel like an eternity to an anxious client. When a client expects one result, but gets another result, it’s not uncommon for a client ...

I am often asked about how to fill out an attorney malpractice application.  Most of the questions revolve around what is the malpractice carrier looking for.  Generally the attorney or staff member is just looking to the proper way to answer the question.  These are the types of questions that you appreciate up front.  The attorney malpractice insurance carrier is entitled to honest and complete answers based on the information that they are looking for, so making sure that ...

As an insurance agency the specializes in Lawyers Professional Liability Insurance it is interesting to see some of the claims that come in, where the attorney should have known better and/or supervised their staff better.  Most Collection Attorneys that specialize in collection work run a very tight ship and wonder why the cost of obtaining attorney malpractice insurance is so high.  While there are the law firms that troll collection practices firms looking for a violation of procedu...

Crowdfunding has become an alternative source of funds for many entities trying to raise capital.  The SEC has come out with rules that allow for entities to crowdfund under certain circumstances.  So the question naturally arises what about a new in practice attorney trying to start up their own practice.  There are many expenses that need to be paid prior to any revenue being generated from the attorney’s practice.  In some instances, crowdfunding may be the answer. ...

An interesting phenomenon with increasing frequency is the Virtual Law Office.  In some cases the attorney is licensed in multiple states and in other cases the attorney is licensed in only their home state.  The thinking goes that by extending their practice into several states the attorney can expand their practice and increase their appeal to prospective clients. In some cases the attorney is only practicing in federal court, ie immigration law that may allow that attorney to prov...

About a week ago, I learned a new term, “Alternative Facts”.  Not sure what the difference is between Alternative Facts and a lie is.  But while it appears that the President of the United States can use “Alternative Facts”, lawyers must abide by a code of ethics.  Evidently Attorney Zaidi was using “Alternative Facts”, before it became it became in vogue.  Michigan Attorney Ali Zaidi’s falsely stated on the attorneys resume and oth...

Most lawyers professional liability insurance carriers require a backup attorney or they will not issue a policy for a solo practitioner.   Frequently the solo attorney will ask why this is a requirement.  The solo attorney protests that that they do not need a backup attorney as they do not have court appearances to be covered or filing deadlines.  If the attorney is ill or out for a few days it is not big deal.  So why won’t the malpractice insurance carrier ju...

CEOL stands for Claims Expenses Outside the Limits.  The purpose of CEOL is to provide a separate limit of liability claims expenses to help preserve the primary limit of liability.  The other Lawyers Professional Liability Insurance Policy option is Claims Expenses Inside the limits (CEIL).   With CEIL, every dollar used for claims expenses reduces the liability limit by a dollar.  Once the limit of liability is exhausted, either through claims expenses or an indemnity ...

It is not always clear when the line of misrepresentation or non-disclosure on the Lawyers Professional Liability Insurance application crosses the line between having a specific claim denied to having the coverage rescinded.   Having an attorney malpractice claim denied because of prior knowledge in the eyes of the attorney or third party seeking damages against the attorney is serious.  But to get coverage rescinded, the application must clearly have misrepresented facts that wo...

Blowing a statute of limitation or a deadline is the quickest way to turn your client problem into the attorney’s problem.  This is one of the most common preventable errors that can be counted on to turn into an attorney malpractice claim.  In fact, in a recent blog about getting coverage rescinded, it started in part from a missed deadline. In this particular case, the client had hired Attorney Doerr of Berman Sauter Record & Jardim to represent him over defective construc...

One of the leading causes of lawyers professional liability insurance claims are conflicts of interest. Beyond representing both parties in a proceeding such as a divorce, there are many hidden conflicts that can cause law firms problems.  Not finding conflicts can lead to loss of clients, loss of fees, disciplinary issues and attorney malpractice claims.  Lawyers need to consider not only actual impropriety, but the appearance of impropriety when determining when to engage a client. ...

With the new Attorney General Jeff Sessions and administration promising to be tough on drugs and crime it should be interesting to see how the federal government treats marijuana.  Remember that even though it may be legal in your state, it is still a federal crime to possess or use marijuana. With the election that just finished 28 states now permit the use in one form or another of marijuana.   An individual in Alaska, which now permits the use of marijuana, was completing the Fede...

With the new Attorney General Jeff Sessions and administration promising to be tough on drugs and crime it should be interesting to see how the federal government treats Marijuana Law.  Remember that even though it may be legal in your state, it is still a federal crime to possess or use marijuana. With the election that just finished 28 states now permit the use in one form or another of marijuana. An individual in Alaska, which now permits the use of marijuana, was completing the Federal...

The legal profession is one of the most stressed groups of professionals.  The stress starts with law school and continues into practice.  A study by Davenee Foundation on Lawyers & Depression shows how serious an issue this is.  It states that attorneys rank 5th in an incidents of suicide by occupation. The American Bar Association (ABA) House of Delegates voted to approve changes to the model rules requiring that attorneys complete one hour of substance abuse and mental hea...

The world has changed in the past few years.  All of us think nothing about tweeting or posting about what we did, what we saw, what we ate or how we feel almost as soon as it happens.  Sometimes if makes us feel good to air publicly arguments or disagreements when we perceive that we were treated unfairly.  Your parents may have told you: “Sticks and stones may break my bones, but words will never hurt me.” Honestly, this is one of the most BS lessons you can teach ...

Recently Blogged about the American Bar Association (ABA) Hours of Delegates voting to approve model rules requiring that attorneys complete one hour of substance abuse and mental health education every 3 years.  Many attorneys work to a large extent by themselves and unlike many other professions can have very little support group to help them with the daily stresses of life. When Lawyers are having problems with Stress & Substance Abuse, not only are they getting hurt, so are their c...

Markel Insurance Company wrote an attorney malpractice policy for Las Vegas attorney Robert Graham in 2015.  According to Markel the Law Firm’s application stated that they knew of no circumstances, situation, act, error or omission that could lead to a claim against the firm, even though Attorney Graham had been misappropriating funds long before December 2015 according the criminal indictment.  According to the Clark County District Attorney’s office Attorney Graham is ac...

The Financial Crisis and Great Recession had its roots in a number of major problems.  One of those was Real Estate.  Many Home Equity Loans that were over 100% of equity in the house value.  Lenders were willing to lend up to and in some cases over the value of a home.  Houses were selling at a record pace, the pricing were going up never to stop, and lenders were eager to lend packaging the loans off to the secondary market with little or no risk to the primary mortgage len...

For Lawyers Professional Liability Insurance, there is not common meaning to the terms.  “Full Prior Acts” is a term that is often misunderstood and changes from carrier to carrier as to what it means.  Each Attorney Malpractice policy defines the terms used in the policy in its own unique way.  The devil is in the details. Many insureds assume that “Full Prior Acts”, actually means that the insured attorney is covered from the inception of their practic...

We get this request frequently.  A law firm’s practice has changed.  They are no longer doing the big time plaintiff cases or the mergers and acquisition work.  They are looking to cut costs.  One of the Law Firm’s larger expenses is Attorney Malpractice Insurance.  Cutting the policy limits from $5,000,000 per claim to $1,000,000 will save over 50% of the premium.  We can save $20,000 a year on premium.  Sounds like a good deal.  Stop right th...

About 2 weeks ago we blogged (Attorney Malpractice--Marijuana and the practice of law) about the Federal Government starting to enforce Federal Drug Laws when it comes to Marijuana use. This just in from USA TODAY: Cannabis industry roiled by White House comments on enforcement: “DENVER — The White House threw the country’s marijuana industry into a panic after announcing Thursday that there would likely be “greater enforcement” of federal anti-cannabis laws under...

What is an Innocent Insured and where is that clause in my policy continues to be one of the most asked questions.   It is also a clause that has promoted countless amounts of litigation. Deliberate or illegal acts are normally not insurable either by rule of law or the insurance language in a particular policy.  But what happens when a firm member commits an act that is clearly illegal or deliberate and thereby excluded from coverage.  This “deliberate” act may ...

According to MLive, Michigan Hudsonville Judge Kenneth Post in 2002 cited Attorney Scott Millard in Contempt and threw him in jail.  Attorney Millard in his 1st case was defending a 20 year old man for being a minor in possession.  Judge Post asked Millards client whether he had any recent drug use and Millard repeatedly advised his client not to answer as it violated his 5th amendment rights to self-incrimination.  This goes back and forth and finally Judge Post finds Attorney Mi...

Suing a client for unpaid legal fees many times is a bad idea.  Yes many attorneys wait until after the statute has run, and yes this may prevent a counter claim or at least provide a defense.  But this does not prevent a bar complaint and if done with any frequency will impact on your attorney malpractice premiums.  Anything done with frequency puts you in the “actuarial crosshairs”. The attorney’s arguments for suing clients for fees: 1.   &nbs...

Attorney Stephen Gutierrez was defending Claudy Charles for intentionally setting his car on fire.  The defense was claiming that Charles did not set his car on fire, but that the car had “spontaneously” caught on fire.   As ironic as this sounds, during closing arguments Attorney Gutierrez’s pants caught on fire.  According to the Miami Herald, Stephen Gutierrez’s pants pocket started to smoke at the beginning of closing arguments.  He immediately le...

When completing the attorney malpractice insurance application, a frequent question is how to answer the number of hours “worked”.  Many attorneys spend 60 or more hours a week in the office, but that rarely translates into even 40 billable hours.  So unless you work for John Grisham’s “The Firm” it is unlikely that an attorney is actually billing out 2000 hours a year.  But they are still a full time attorney if they average over 40 hours a week in t...

A few months ago we mentioned a suit Shore v Johnson & Bell (Docket No. 116cv04363) concerning a potential class action suit against the firm for not having security measures up to industry standards and thus not properly protecting client data.  Turns out that the Johnson & Bell client retainer agreements in question have an arbitration clause.   Suit was dismissed in Federal court and is now in arbitration. An article by Jennifer Quinn Broda of Sedwick LLP makes some in...

A recent blog addressed many issues associated with Suing Clients to Collect Unpaid Legal Fees.  A few law firms seem to think that it is not as bad if they turn the accounts over to a 3rd party to collect.  Attorney Malpractice Insurance Carriers treat these suits the same as the firm had sue the client directly. The outcomes both good and bad are the same as the previous blog on Suing Client to Collect Unpaid Legal Fees.  It is generally a bad idea.  The firm also opens th...

As with a marriage it is generally easier to get into one than to break it up.  Dissolving a law firm is much like breaking up a marriage, but with many more complexities.  There are a whole host of issues that are created when a Law Firm breaks up including the business side of the law and the practice of law.  A first steps needs to be checking with your local or state bar as well as your malpractice insurance carrier.  Also there are many check lists available on the inter...

With everyone worried about Cyber Security and Data Breaches, many people forget that most frauds happen from within.  One might be surprised to find out that some malpractice claims can be attributed to fraud from with the law firm.  Law firms frequently deal with clients that have either committed fraud or helping a client investigate a fraud committed against the client.  Surprisingly law firms tend to overlook the possibility of fraud committed in their own firm.  Attorne...

You have all gotten e-mails from people that you have never heard of looking for representation, “to collect a past due bill let me know if your firm can handle” or "Legal representation based on breach of sale contract. I wait to hear from you if your firm can take on my case. Just click this link for more information about the case.”   They conclude, “Time is of the essence, look forward to working with another sucker.”   These are just 2 examples...

We previously blogged about Kentucky Attorney Conn who was accused of gaming the social security system out of over $550,000,000.  Per the ABA Journal report, Mr. Conn has pleaded guilty to charges he submitted false medical documents and bribed an administrative law judge to approve claims, obligating the government to pay more than $550 million in lifetime disability payments. To read the initial Blog Click Kentucky Attorney Conn Accused To read about his guilty plea Click Kentucky ...

What many people may not realize is that sometimes litigation can be financed by an outside 3rd party.  The industry of litigation financing helps support cases being brought that might never have been pursued because of a lack of money to finance a case or cases should this facility not exist.  Normally the 3rd party financier gets a piece of the case should the plaintiff prevail.  The premium financier evaluates the merits of the case and the possibility of success prior to agre...

Occasionally we are asked to add an “Additional Insured” to a Lawyers Professional Liability Insurance Policy.  In the world of commercial insurance this is a normal practice.  Most requests to add an “Additional Insured” to a General Liability, Commercial Property, Workers Compensation or Business Owners Policy are approved by the insurance carrier as long as there is a good insurance/business purpose for the request.  For instance, a bank holds a lien on ...

We get this question frequently, especially after an attorney has received one of our mailers.  “I need prior acts coverage and your mailer states that you work with malpractice insurance carriers that offer prior acts coverage.” This is true, in most cases admitted attorney malpractice carriers will offer prior acts coverage when writing a policy while matching the prior acts date that is on the current expiring policy.  Thus with a claims-made policy the prior acts cover...

Don’t Panic.  Most lawyers receive at least one bar complaint during their tenure as a lawyer.  Read the Commission letter carefully.  Depending on your jurisdiction, sometimes the Grievance Commission is responding for you, stating that the compliant does not fall within the Bar’s jurisdiction.  It is merely a copy of the notice of the response to your client.  But if the letter is asking for a response from you, then my all means this letter deserves your f...

Texas Attorney Seely followed his ethical duty and admitted to his client Price that he had made a mistake and that Price should hire another attorney to sue the law firm of Gordon Elias & Seely.  Mr. Price followed through on this advice and sued the firm. To read the full story in Texas Lawyer   Click Here   

We have all seen these ads from Lawyers aimed at attracting Prescription Drug Users Clients: “Have you or a loved one been prescribed the blood thinner Xarelto as a treatment for reducing the risk of stroke?” then the ad continues detailing possible side effects from the drug and potential compensation. The ad ends with “Remember, these drugs are linked to serious and potentially fatal health problems, including serious and sometimes fatal internal bleeding.”…. &...

Law Firms get very comfortable with their attorney malpractice insurance carrier.  Many firms have never had a claim or even the need to report an incident.  So how do you know that you have the most cost effective insurance policy for your firm?  Cheaper is not always better.  No two lawyers professional liability insurance policies are the same.  Saving dollars up front may cost the firm with an uninsured loss.  But you could be paying thousands of dollars more th...

In the case of Harleysville Insurance Company v Holding Funeral Home,  the Harleysville defense counsel (Defense Counsel) sent to the Holding Funeral Home Plaintiff Counsel (Plaintiff Counsel) certain documents on a thumb drive.  Defense Counsel subsequently found out that it had inadvertently included some files on the thumb drive subject to attorney-client privilege and requested that Plaintiff Counsel delete those files.  Plaintiff Counsel complied with this request. ...

A recent ABA article describes a real problem in West Virginia.  Although this attorney was singled out, according to state officials there are far worse offenders.  Michael Cooke received a 2 year suspension because of the overbilling.  But a recent audit showed that out of 800 West Virginia attorneys billing for court appointed work about 100 were overbilling. The state started to crack down on the overbilling problem only after the WV legislature refused to increase the hourly...

The Consumer Financial Protection Bureau (CFPB) was formed by the Dodd-Frank Act.  The main intent of the CFPB was to help consumers that were having issues with Banks, Lenders and other Financial Institutions.  CFPB jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies operating in the United States.  By extension, it has also taken action against la...

Great Story.  He robbed banks, went to prison and is now on track to be a Georgetown Law Professor.  To read this story form the Washington Post  Click Here

Out recent blog about the Consumer Financial Protection Bureau (CFPB) stated that a number of law firms were being contacted about violating consumer protection laws.  Many had signed consent decrees costing this hundreds of thousands of dollars or more.  Normally there is no insurance coverage for Law Firms accused of these misdeeds. The CFPB currently has broad enforcement powers.  According to the National Law Journal article part of a new bill may drastically chan...

Two Federal Judges have let attorneys know that Boilerplate Objections merit sanctions.  The attached article by Jeffery Kruse details the frustration that these judges have with attorneys that continue to violate the Updated Federal Rules of Civil Procedures and the changes that took place to rule 34.  It would be wise to put some thought into responses to discover in the future. Attorneys should remember that sanctions are not covered by their malpractice insurance policies.&nb...

Over a period of 5 years Nebraska Attorney Garrison via Facebook told his client to “Relax”, “Be Happy”, “This is complicated”, and “U realize we sued the wrong company right? We got the money from a company that had it. The correct company would never have had this type of money to pay our judgment” among other not very informing responses to his client’s Facebook queries. After many years of blowing off his client’s questions, the de...

Appears that the worst is over for the WannaCry Ransomware attack.  As many of you know this attack has it genesis from a cyber-attack/data breach on the NSA last year that showed vulnerabilities in older versions of Microsoft’s operating systems and not up-to-date versions of Windows 10 desktop and Windows Server Systems.  While the worst may be over for this particular attack, experts are stating that it may only be a short period of time before another variant of The WannaCry ...

This issue comes up with frequency.  Attorneys for a variety of reasons join together.  In many cases they share office space, support staff, computer systems, and other equipment to spread out the costs.  Some actually make themselves look like a partnership from letterhead to advertising when no partnership agreement exists. Attorneys entering into this relationship need to be aware that not all Lawyers Professional Liability Insurance Carriers will write just one attorney in s...

Debt Collection attorneys are constantly worried about running afoul of the Fair Debt Collection Practices Act (FDCPA).  According to Professional Liability Matters in Midland Funding LLC v Johnson the Supreme Court ruled that pursuing stale debt in bankruptcy court does not violate the FDCPA.  This should help several debt collectors that have had class actions suits filed against them for this very reason. 

Social Media continues to get attorneys and judges in trouble.  We have blogged in the past that you need to think before you Tweet, Post, or Blog.  Once posted on the internet you will never get it back.  In response to the arrest of a black man for the murder of a white San Antonio Police officer Texas Judge James Oakley posted on Facebook “Time for a Tree and a Rope.” This comment drew a backlash from many who felt that it referred to lynching.  The judge...

Amazon’s Alexa is now capable of tracking an Attorneys Billable hours.  Thomson Reuters Elite introduced the Workspace Assistant using Amazon’s Echo Family of devices.  The Workplace assistant keeps track of client time and billing interfacing with Thomason Reuters Elite Workspace desktop using voice activated commands.  The Workspace Assistant can be downloaded from The Amazon Alexa Store, but can only be used by those users who subscribe to Workspace. Of concern may...

Words maybe an Attorneys tool of choice, but sometimes too many words are too much when  it is best to answer just ‘yes’ or ‘no’.  Attorney Hermesmeyer, an Assistant Public Defender, learned the hard way when US District Court Judge John McBryde, repeatedly asked for a ‘yes’ or ‘no’ response to the Judge’s question.  When the Hermesmeyer continued to evade a response to the question, he was fined $500.  The US 5th Circuit ...

Law Firms or individual attorneys for many reasons either own or help manage other businesses that they do legal work for.  While the relationship is likely mutually beneficial to the law firm and the business there are minefields that law firms and their ‘clients’ need to be aware for this common attorney malpractice insurance policy exclusion.  In general malpractice insurance companies have language in their policies that exclude coverage for entities that are owned or c...

The process for allowing and recovering attorney’s fees for bad faith prosecution of a claim may differ from state to state.  A recent Pennsylvania case Villani v. Seibert, is an example of just such a case.  This attorney pursued a case against the defendant that was without merit.  The defendant is seeking to recover fees. Attorneys that pursue cases of questionable merit should be aware that their Lawyer Professional Liability Insurance policy likely will not provide cov...

Attorney Sicari discovered that his Lawyers Professional Liability Insurance Policy (LPL) had lapsed.  Unfortunately for him his discover was in 2013 when the coverage had lapsed in 2011.  As luck would have it in July of 2013 he also discovered that he had a malpractice claim against him.  Mr. Sicari sued The Hartford (Sicari v The Hartford)  claiming that he was never notified of the coverage being non-renewed by The Hartford in 2011. A little background into The Hartford&...

Recently we blogged about the chronic overbilling problem West Virginia has for state appointed work.  The attorney in that blog had been suspended for 2 years.  At that time state officials were stating that there were other attorneys that were far worse. West Virginia Attorney William Lester has been charged with fraud in overbilling for court appointed work.  According to the state officials, Lester managed to bill the state for more than 24 hours a day on at least 17 days.&...

Attorney Alison Motta was suspended for stated in one ruling that she did not like that this was ‘F---- B----‘ and rolling her eyes.  This was one of many disruptive acts that she committed during in the trail of US v Redwood.  The Executive Committee of the US District Court Illinois Northern District suspended Attorney Motta from the Federal Bar for 90 days and she is also not able to be lead counsel on any Federal case for 1 year.  She may also face further actions ...

Previously we reported on Kentucky Attorney Conn who plead guilty to gaming the social security System out of over $550,000,000.  According to the ABA Journal Attorney Conn cut his ankle bracket and has disappeared.  The FBI has issued a warrant for his arrest.  Prior to his disappearance he had wired Large Sums Of Money out of the country.  Rumor is that he might be in Cuba or Ecuador.  If have information on whereabouts, call FBI Louisville at 502-263-6000. 

See the Rest of the Story.  When Attorney Malpractice Prior Knowledge is not Prior Knowledge Blog It is important to know when to put your Attorney Malpractice Insurance Carrier on notice.  Most malpractice policies require the insured to put the malpractice insurance carrier on notice when the insured has ‘reasonable knowledge or can reasonably expect’ that a malpractice claim may be filed against the insured.  Malpractice policies also have language in them specific...

Formal Opinion 477 provides new guidelines when using e-mail communication with clients.  The new standard balance the protection levels needed when using electronic communication with clients.  The standard of ‘reasonable effort’ to unauthorized access of internet client communication needs to be followed.  In general attorneys should consider the following when using electronic means of communicating with clients. 1.     The sensitivity of the in...

In Errant Gene Therapeutics, LLC v. Sloan-Kettering Institute for Cancer Research, a protective order stated: “Confidential and Attorneys’ Eyes Only information shall be used by the Receiving Party solely for the purposes of preparation for trial, pretrial proceedings, and trial of actions and proceedings in the above-captioned action and not for any business, commercial, regulatory, competitive, personal or any other action.” In discovery Sloan-Kettering provided such i...

Legal Outsourcing is a growing trend in the practice of law.  This allows law firms to expand their practice when needed without taking on the fix expenses associated with hiring addition staff.  But Legal Outsourcing does add additional risk and exposures to firms. Many law firms have client contracts that require the law firm to verify that any outside contractors maintain adequate procedures and insurance.  The insurance can include workers compensation, general liability, pro...

Earlier this month we reported that Kentucky Attorney Conn after having plead guilty to gaming the Social Security System out of over $550 Million and leaving thousands of former clients devastated was on the Lam.  He has e-mailed The Lexington Herald-Leader over the weekend telling the paper that he flew out of the country on a fake passport to a country that does not have an extradition treaty. The e-mails purported to having come form Mr. Conn claim that he has no money and is working a...

Illinois State Bar Association Mutual Insurance Co (ISBA) files declaratory action against insured Attorney Patricia Sharkey in a Seawall Suit.  Attorney Sharkey is accused of malpractice in this case and sanctions are also being sought. The underlying case alleges that Attorney Sharkey and others engaged in "intentional and conspiratorial conduct" in the seawall case, according to the complaint. Sharkey is a director and legal representative for the Long Beach Community Alliance, which su...

According to the New Jersey Advisory Committee on Professional Ethics Committee Avvo’s client-linking services marketing fee violate the ban on lawyer-referral payments and ban on sharing fees with non-lawyers in their June 21 Opinion. Avvo two legal services website products are Avvo Advisor and Avvo Legal Services. Prospective clients   pay a flat fee for a 15-minute phone conversation with a lawyer though Avvo Advisor.  With Avvo Legal Services prospective clients purcha...

Many lawyers and law firms are faced with this problem.  The firm has done all the right things trying to avoid billing problems by setting expectations clearly and in writing from the outset to avoid surprises for clients:  obtained an upfront retainer, billed on time, providing clear understandable bills, and  specified the deadline for payment.  But it’s a fact that lawyers will not collect all that they bill for. The term ‘realization rate’ refers t...

Mayer Brown isn’t liable for a paralegal’s error that canceled a security interest in a $1.5 billion loan to General Motors because the law firm didn’t represent the lenders, according to a federal appeals court. Mayer Brown had represented General Motors, rather than the consortium of lenders whose security interest was accidentally terminated in 2006, according to the opinion by the Chicago-based 7th U.S. Circuit Court of Appeals. To read the complete article from the ...

A Florida Grand Jury declined to bring charges against a Florida man, John Marshall, that killed his neighbor, Theodore Hubbell Jr, dumped the body in the back up his pickup truck and then proceeded the 30 miles to his lawyer’s office.  Attorney Harris immediately called 911 to report the murder.  Attorney Harris also stated that Marshall claimed self-defense. According to the Florida Grand Jury they could not find enough evidence to refute Marshall’s statements of self de...

Occasionally we are asked to add an “Additional Insured” to a Lawyers Professional Liability Insurance Policy as the client is insisting.  In the world of commercial insurance this is a normal practice.  Most requests to add an “Additional Insured” to a General Liability, Commercial Property, Workers Compensation or Business Owners Policy are approved by the insurance carrier as long as there is a good insurance/business purpose for the request.  For instan...

An Ames & Gough survey of leading Lawyers Professional Liability Insurance Companies found that while the number of new malpractice claims continued to stay steady, claims frequency remains above historical levels.  The study used data provided by nine leading attorney malpractice companies that write approximately 80% of the attorney malpractice sold to law firms.   The key findings of the survey were: 1.       Defense Costs continue to rise 2....

Having failed the bar exam multiple times Mark Tetzlaff has sued the Illinois State Bar(State Bar) over not being able to take the Bar Exam in an open book format.  According to the Americans with Disabilities Act (ADA) complaint filed against the State Bar, Tetzlaff, an alcoholic, suffers from memory loss and depression.   The complaint states that not being able to take the exam over a 4 day period in a private room in an open book format violates his rights under the ADA. Tetz...

The continued rise in substance abuse with lawyers and judges gets to be a larger problem. A 2016 Hazelden Betty Ford study reported that 20.6 percent of the lawyers and judges surveyed reported problematic alcohol use.  It also found that along with the 21 percent of licensed, employed attorneys that qualify as problem drinkers, 28 percent struggle with some level of depression and 19 percent demonstrate symptoms of anxiety. Maybe more troubling is that younger attorneys in the first 10 y...

According to a recent article on Law.Com about the National Cannabis Bar Associations’ first Cannabis Law Institute which had 150 lawyers in attendance, an IRS Lawyer told the gathering that the IRS is not targeting Cannabis lawyers or businesses.  He went on to state that tax agency’s Office of Professional Responsibility has held that “to the extent [a lawyer] is representing someone in the industry, that is not sanctionable.” Now that may all well in good, but as...

In Sommerfield v City of Chicago No 13-1265 the 7th US Circuit upheld an award of Attorney’s fees of $430,000.  The initial case started from a discrimination claim filed by a Jewish Police Officer against the City of Chicago Policy Department.  Over the years the plaintiff had loss on most counts to Chicago on summary judgement, but was finally awarded by a jury in federal court the sum of $30,000. In this decades old case, the attorney in the case initially claimed fees of $1,...

In Rocky Ferrigno (plaintiff/client) vs Jaghab, Jaghab & Jaghab PC (defendant/Law Firm), the client alleged that the Law Firm should have pursued all avenues to establish damages.  The plaintiff/client stated that he fell from a ladder during routine maintained of a light fixture ballast.  Because it was routine maintenance there was no cause of action that could have been established against DASNY under NY labor law.  As such on appleal the NY Supreme Court Appellate Divisi...

Eric Conn duped the Social Security system out of over $500 Million.  In the process ruined thousands of lives.  In absentia, US District Judge Danny C Reeves sentenced Conn to 12 years in prison and ordered to pay a $170 Million in restitution. As many of you know on June 2nd he cut off his ankle bracket in Kentucky and disappeared.   At the time he had e-mailed a local paper stating that he had fled to a country that does not have extradition with the US.  As with man...

Ohio Criminal Defense Attorney Matthew King in June of 2016 was convicted of money laundering for a person he believed to be a ‘cocaine dealer’.  Unfortunately for King the ‘cocaine dealer’ was actually a confidential informant for the Norther Ohio Law Enforcement Task Force.  King had approached the informant at an Ohio strip club and told the informant that he could launder money for him.  King must have watched too many ‘Breaking Bad’ episo...

There is an old saying in the computer industry, ‘everyone makes mistakes, but to really screw-up use a computer’.  Attorney Angela Turiano of Bressler Amery & Ross learned this lesson recently the hard way.  Wells Fargo who was not a party to a lawsuit between two brothers (Gary Sinderbrand a former Wells Fargo employee, plaintiff and Steven Sinderbrand a current Wells Fargo employee, defendant).  Attorney Turiano went on to create a massive data breach of sensiti...

Even though Marijuana is legal and/or decriminalized in 29 states and the District of Columbia for medical or recreational use it is still listed as a controlled substance and has no medical use under existing Federal Law.  Given this more and more cases are coming up with conflicting results from different jurisdictions.  A recent Massachusetts Supreme Court decision on Barbuto v Advantage Sales & Marketing LLC (ASM) is another example of the evolving law in this area. The plaint...

Sometimes the little guy wins against the big guy.  According to a BBC Article the Trump Empire started to have issues over the use of the iTrump name in 2011.  iTrump is a Trumpet simulator app.  The Trump attorneys alleged that the trumpet simulator’s name falsely suggested a link to the tycoon. The iTRump app developer, Tom Scharfeld, won this claim and then went after the Trump Organization over the exclusive use of the “Trump” trademark in connection with c...

It all started in 2013, Matt Corby, an Australian teenager, measured his subway Footlong sandwich.  It measured 11 inches.   He then posted the photographed picture of his sandwich along with a tape measure on Facebook.  From this start and with much notoriety class action attorneys sued Subway claiming misrepresentation under state consumer protection laws.  In 2016, a settlement was agreed to and preliminarily approved by a US District Court. Prior to the settlement, ...

Attorney malpractice claims coming from poor billing practices continue to be one of the highest frequency claim causes.  Whether the client was upset with the service, did not have the money, poor communication or just mad at the world, claims resulting from attorney fee issues are not slowing down. A recent article from Law Practice Today addresses steps attorneys can take to improve their billing practices.  The 12 tips are: 1.       Contemporary time...

This is an important question if you expect the malpractice insurance carrier to pay your malpractice claim.  Not properly insuring the attorneys can cause a claim denial.  Lawyers Professional Liability Insurance policies are written to cover the Law Firm.  By extension all of the attorneys and employees that work for the firm past and present are covered for covered work they have done on behalf of the ‘named insured’ firm.  The current Axis policy definition is...

According to the BBC the DoNotPay robot lawyer website generates documents that people can use in small claims court.  It has not been programmed to provide free legal advice for victims of the Equifax data breach.  Users of this site should be aware that depending on the state small claims court may or may not be the best place for your claim.  Also with anything that is free, you get what you pay for.  It may pay for you to consult a attorney.

This question comes up with some frequency from Prospective Insureds getting close to retirement:   Question:   “I received your inquiry letter dated June 14, 2017. I currently insure with MLM However, I am considering retirement within the next two years and I am wondering what insurance is offered for lawyers in retirement.   MLM has handled all my past claims and any recent possible legal malpractice claim has been reported to MLM for notification.”   R...

According to a recent ABA article, Lawyers who travel outside country may be asked to show the contents of their phone or laptop to a customs agent.   A customs agent may not need probable cause so the 4th Amendment will not protect an attorney from searches at the border.  The search can include their phone, tablet or laptop.  The attorney could be required to open client files, reveal internet search history, show phone lists and phone logs.  While it is true that if you te...

New York’s ethics board’s opinion follows New Jersey, Ohio, South Carolina and Pennsylvania in stating that Avvo and LegalZoom along with other such online legal service providers violate New York’s rules of professional conduct.  The New York ethics board states that the ‘marketing fee’ is actually a ‘referral fee’ in violation of Rule 7.2(a) of the New York Rules of Professional Conduct. Rule 7.2(a) also prohibits the reasonable impress...

In Westport Insurance v Peter G Mylonas, Westport filed a declaratory action with the court to determine whether multiple allegations of attorney malpractice during Mylonas representation of his client Papadopoulos result in one claim or many claims. During a jury trial, which Westport provided a defense of Mylonas, a jury awarded Papadopoulos $525,000 for attorney malpractice.  Mylonas had been retained by Papadopoulos to form a corporation.  During the trail Papadopoulos presented a...

Georgia Attorney Sandra Finch represented her client in a fire damage claim against Allstate Insurance.  Attorney Finch was accused of obtaining without permission photographs of a Steamatic guide that was stored in Mark Gould’s office while Attorney Finch was waiting to depose Gould.  During the deposition Attorney Finch showed Gould a number of photograph’s of the Steamatic Guide.  In addition, Attorney Finch also showed Gould a photograph of the inside of Gould&rsqu...

Debt collection law firms have one of the highest frequencies of reported malpractice claims/incidents for all types of law firms.  While most claims are relatively small, the frequency of claims drives up attorney malpractice rates for all law firms doing debt collection.  There is always the fear by insurance carriers that just one Fair Debt Collection procedure violation can turn into a large class action against a debt collection firm.  The frequency and severity of debt colle...

An attorney at Wilmer Hale accidentally sent confidential information about the departure of  Pesicos former general counsel to the Wall Street Journal.  Up to that time almost no one knew about the SEC inquiry.  According to the information released, former Pesico general counsel Maura Smith had initiated an internal investigation into financial misreporting and the SEC is now looking into her departure as a violation of the Whistleblower laws.   To read the rest of the st...

Questions dealing with Extended Reporting Period Endorsements (ERP or Tail) are the most frequent questions that we get.  Many attorneys are shocked at the cost of an ERP.  ERP premiums regardless of your attorney malpractice insurance carrier are a multiple of the expiring premium.  The only exception to this is a ‘non practicing ERP’ or ‘retirement tail’ that an attorney can get if he is with a carrier that offers this option at retirement and you have be...

In the case of Maroulis v Friedman, Maroulis retained Attorney Friedman in a divorce proceeding in June of 2010.  In November 2011 Maroulis dismissed attorney Friedman and hired another law firm.  In July 2012, Maroulis settled the divorce action. In October 2014, Maroulis sued Friedman for malpractice and emotional distress.  This case was dismissed by summary judgement and appealed by the plaintiff.  The appellate court up upheld the dismissal. It is important to remember...

According to ABC News a dead man’s unsent text message to his brother was accepted by an Australian court as the dead man’s will.  Although this case has little influence on the US Court System it is a sign of the changes happening all over the world.  The dead mans wife had applied to the Supreme Court to manage her late husbands assets, arguing the text message was not final because it was never sent.  The man’s brother had found the text message on his dead ...

Attorneys that are supposed to read contracts for a living.  They tell their clients the importance to not only read the contract but to understand what it means.  Rarely do attorneys follow their own advice; many times they end up with expensive lessons.  Even more surprising is for an attorney to accept verbal assurances that they will have their attorney malpractice prior acts exposures covered in retirement for free.  Never asking for the details or requirements needed to...

Mr. Grasz was nominated to the US Court of Appeals for the 8th Circuit by President Trump.  His nomination hearing before the Senate Judicial Committee was recently held.  The ABA unanimously rated Mr. Grasz Not Qualified.  Of the 42 nominees that President Trump has nominated for judge, 40 of 42 have been rated by the ABA as Qualified or Very Qualified.   Some of the conclusions of the ABA Grasz investigation were: "The ABA interviewed several colleagues of Grasz,...

According the Illinois ARDC in 2016 of the 13,500 solo attorneys practicing law 41% of them did not carry attorney malpractice Insurance.  Except for a handful of states attorney malpractice insurance is not required.   So as shocking as the ARDC Illinois number is to the general public, this is not a surprising number.  It is estimated that nationwide in states that do not require the attorneys to carry attorney malpractice insurance over 1/3 of those law firms go bare. So ...

Many law firms hold attorneys that leave the firm responsible for the attorney malpractice claims deductible should a claim be made against the firm for work that the attorney did while at that law firm.  In most cases smaller law firms carry deductibles of $10,000 or less so although this could hurt the departing attorney’s pocket book it would not be catastrophic financially.  Many larger law firms carry deductibles that can be north of $100,000.  Don’t know about yo...

For those of you looking for another legal specialty, why not space law.  Just think you could be working for Elon Musk or Richard Branson to name a few in a galaxy far far away.  So when the Russian satellite collides with Chinese space junk, you may be able to represent one of the parties in space court in the final frontier.  Or if France decides to annex part of the moon, you could help litigate the dispute to the highest court. In all seriousness, as activity increases in ...

A law firm decided to notify everyone that it was moving by e-mail.  Normally this is an everyday occurrence, unless the sender decides to create a distribution list with a few hundred of its closes friends putting the distribution list in the ‘cc’ e-mail address line and not the ‘bbc’ e-mail address line.  Other than the fact that the law firm may be disclosing client information, an ethics violation, it is certainly not a way to make or keep friends. Once a f...

Normally when someone sues naming every business or government agency with a relationship to a property owner the case gets kicked as a nuisance case.  But the rules change when the landowner being sued is a Colorado marijuana grower by the adjacent land owner in Federal Court under the RICO Act (Racketeer Influenced and Corrupt Organizations Act.)   Wait a minute; isn’t the RICO Act supposed to help fight organized crime?  When you look at the facts about marijuana...

The ABA Journal recently reported in Holtzman vs Turza, that Illinois CPA Ira Holtzman brought a class action suit against Illinois attorney Gregory P Turza for violating the Federal Telephone Consumer Protection Act (FTCPA) almost a decade ago.  8,430 unsolicited faxes were sent to accountants without an ‘opt-out’ provision.  The US District Court awarded statutory damages of $500 per fax that contained a ‘Superman’ references and were headed with the title &ls...

The attorney was with a high risk insurance carrier letting his coverage lapse in 2016.  He wrongly assumed that it would not be a big deal to get his prior acts back after more than a year and ½..  He had been paying around $7,000 annually to cover his past acts.  L Squared was able to find an insurance carrier that was willing to ‘repair’ his past acts, but now the cost for this was going to be $17,000 annually.  According to what he told the L Squared Ag...

Eric Conn, aka Mr. Social Security, was captured while coming out of a restaurant in a Honduras shopping center by a Honduran SWAT team.  He is scheduled to be returned to the US on December 5. Eric Conn was nicknamed Mr. Social Security because he handled over 3100 social security disability cases with a federal judge and doctor on his payroll.  This allowed Conn to fraudulently get approved over $550 million in questionable social security disability benefits.   His form...

An attorney malpractice or lawyers professional liability insurance policy may have a Law ‘Firm’ Prior Acts Date, an ‘Individual’ Prior Acts Date, a ‘Career Coverage’ Prior Acts Date and/or ‘Predecessor ‘ Firm Prior Acts Date. Each can be used to address a specific coverage needs: 1.       Firm Prior Acts – As the name implies covers work on behalf of the named insured firm after a specified date.  This ...

According to the Miami Herald and the Florida Record, Erwin Rosenberg’s troubles started in 2006 when Rosenberg would not produce client documents in a lawsuit.  Circuit Court Judge Gerber ruled that Rosenberg had acted in bad faith and awarded attorney’s fees.  Even after the ruling Rosenberg refused to produce the client documents.  Rosenberg to this day has refused to pay the attorney’s fees.  The judge recommended a 91 day suspension, but the Florida Sup...

Question coming with frequency from lawyers; “Does attorney malpractice insurance cover my ‘marijuana practice’?” The short answer to this question is there is no specific exclusion in almost all lawyer’s professional liability insurance policies for a ‘marijuana practice’.  Longer answer gets complicated.  The attorney malpractice insurance policy objective is providing errors and omissions coverage when an attorney is accused of attorn...

With Christmas just around the corner and New Year not far off, many law firms’ partners and staff are getting ready to have a few well-earned days off.  Not to put a damper on the Xmas cheer, but many law firms’ also renew their attorney malpractice insurance at year end.  Safe to say that this is the busiest time of year, not just for Santa, but for malpractice insurance agents and underwriters everywhere, who are preparing and binding insurance terms for the coming yea...

A recent article from The Dentons, “You’re Facing a Malpractice Claim; Don’t Make it a Bad Situation Worse”, gives advice on what to do after the mistake has been made.  Every so often we have law firms that actually make things much worse.  Once an issue is known think and consult before you act making sure you do not react.  According to the Article things to remember: 1.       Not Every Mistake is Malpractice—Everyone...

Always hate to have to tell someone no.  This is an actual e-mail, minus names, places and insurance carriers that came in recently.  Question from Attorney: I have been an attorney for almost 30 years.  I handle personal injury and workers compensation cases for plaintiffs/petitioners (95% of my work).  I am currently an associate at my current Firm.  I started here around 6 years ago.  Prior to becoming a full time employee at my current Firm, I had my own solo...

Unlike many other types of insurance, Attorney Professional Liability Insurance cannot be bound without the malpractice insurer’s specific application.  Some malpractice insures will use a competing insurer’s new business application but this is the exception rather than the rule.  As an independent malpractice insurance agency we work with my different malpractice insurers and can use our one page ‘indication’ form to provide what is called a ‘premium...

Yesterday’s blog dealt with a data breach that did not use a computer.  There are many ways to compromise personal confidential information without a computer.  This is a recent example of what can happen: As with many older law firms, this firm had too many client files for its actual office space.  The law firm’s office space was in large upscale multi-story office building.  The office building provides additional individual tenant storage space that the firm ...

Recently blogged that L Squared turned 15 in 2017.  What you may not know is that L Squared is in 47 states and the District of Columbia. There are few independently owned professional liability agencies that can deliver the errors and omissions insurance for Accountants, Dentists, Lawyers and Title Agencies on a nationwide basis. Many agencies write insurance just about any risk that comes through the ‘door’ and are jacks of all trades.  That is fine if you have a home an...

  Lawyers chose to go without malpractice insurance believing because they work for a small firm and maintain close relationships with their clients they are immune to claims. Other attorneys believe that the chances of them facing a claim aren’t great enough for them to purchase a Lawyers Liability Malpractice insurance policy. The logic flaw is small firm lawyers have malpractice claims just like their more high profile peers in larger firms.  If a malpractice claim goes to ...

Making a practice of suing clients for unpaid legal fees is like playing the lotto.  The more you sue the greater your chances of getting a retaliatory malpractice claim or disciplinary complaint. An attorney will state, “I want to get paid for the work that I do, so why does my Lawyers Liability Insurance carrier care?” Fee suits of clients are a leading cause of Lawyer’s malpractice claims.    From a malpractice insurers perspective if you sue enoug...

In speaking with malpractice insurers, what the insurers call ‘social media fraud’ in many cases is ‘The Friday Afternoon Fraud’.  Insurers refer to it as a social media fraud because cybercriminals lurk on social media looking for information that can be used in a hack.      With all the massive data breaches, these cases are on the rise.  Law Firm’s and client’s e-mail systems are being hacked at an ever increasing rate.  ...

When one attorney in a law firm wants increased attorney malpractice limits but the other firm members do not want to pay the extra cost, what can the one attorney do?  It seems logical to allow one attorney to increase their policy limits. So if one attorney is willing to pay for increased limits either by an endorsement to their existing attorney malpractice policy or purchase an excess policy just for themselves is this possible? Unfortunately for the attorney wanting to increase their ...

A common misconception is that Attorney Malpractice Insurance coverage for a departing attorney continues until the end of the policy term because it is ‘paid for’.  Once an attorney leaves a law firm their work after they leave the firm is not covered.  The departing attorney needs to purchase a new policy or be added to their new firm’s Attorney Malpractice Insurance policy for coverage.  Attorney Malpractice is written for the Law Firm covering ...

Many law firms misunderstand as what is and is not covered when a firm has an ‘Of Counsel’ attorney working for them.   Attorneys continue to construct ‘creative’ relationships for attorney malpractice coverage under this mistaken belief.  Believing something is covered versus being covered are two different things. Of Counsel doing no work for the law firm Frequently law firms’ lawyers professional liability insurance policies have ‘Of Counse...

  Question from attorney: Does your insurance agency provide malpractice insurance for mediators? I have a litigation practice but am hoping to expand into mediation as a significant area of my practice.   Response: Mediation is normally defined as a professional service a lawyer would perform under most attorney malpractice policies.  As a lawyer performing other areas of practice you would not normally want to get just a specific policy that just covered mediation service...

This issue recently came up with a client who did not want a ‘burning’ the limits attorney malpractice policy.  The client went no further than the insurance proposal coversheet to come to a conclusion.  In this case the client assumed (wrongly) that Claims Expenses Outside the Limits meant that there was no separate coverage for defense costs.  Which would be a ‘Burning’ the Limits Policy. It is bad enough that Attorney Malpractice policies are not standa...

Hiring a suspended attorney by a law firm might not impact the law firm’s attorney malpractice insurance.  Hiring a recently reinstated suspended attorney to practice law will impact your attorney malpractice insurance.  So what is the distinction? This is the typical question that is asked on an attorney malpractice new business application.  Also there is a similar question on the ‘add attorney form’ when hiring a new attorney. “Has any lawyer in the ...

The ‘Directors & Officers’ and ‘Closely Held Entity’ Exclusions are two frequently overlooked policies exclusions for Attorney Malpractice.  Every attorney malpractice insurance policy has some restrictions/exclusions for this issue.  It is common for insurers to have a supplement to list the firm ‘clients’ that that an attorney is either an officer or director and/or has equity interest in.  Some insurers use the officers/director supplemen...

We recently posted a blog concerning often overlooked coverage exclusions entitled, "Beware of the (s)".  This analysis of a court case posted on  February 21, 2017 by Andrew P Carroll, Emilio F Grillo and Seth L Laver highlights this issue.  The originally blog can be found on Professional Liability Matters   Attorney? Check. CEO? Check. Coverage? Unlikely. Some attorneys wear multiple hats. We have other interests, other business ventures, other opportunities t...

Attorneys dread doing their annual Law Firm Attorney Malpractice Applications.  It is non billable administrative time that takes away from the practice of law.  Depending on the firm this task may be handled by the Managing Partner; the beginning associate; or newest clerk in the office.  While expedient having the newest staff member complete the application it potentially opens the firm to denied claims and at worst or coverage rescission.  The finger pointing for a poorly...

A recent ABA article Entitled "Trump attorneys statement that he paid Stormy Daniels $130K raises ethics questions" by Stephanie Francis Ward raises the question, does a payment made by a lawyer using his own funds violate the rules of professional conduct?  Not sure we know enough of the story to judge.    Click Here for the entire ABA Story.    

Suspended and/or disbarred attorneys want to obtain coverage to protect their past acts.  So it begs the question can a suspended attorney obtain an attorney malpractice insurance policy? Most attorney malpractice insurance policies have an outright exclusion for a suspended attorney.  Even without a specific exclusion, as a suspended attorney, they should not be performing any of the services defined as a professional service.  As such we know of no malpractice insurer that will...

The assumption that your attorney malpractice policy will not answer in case of a criminal complaint could be invalid.  A recent New Jersey court case was cited in Professional Liability Matters by Seth L. Laver, Andrew P. Carroll and Steven C. Capobianco of Goldberg & Segalla makes the point that assuming what your attorney malpractice insurance coverage is or is not can cost you money.  The New Jersey court ruled that the law firm’s malpractice insurer must p...

Disciplinary Coverage is an additional coverage found on most admitted and some non-admitted Attorney Malpractice Insurance policies.  Some malpractice insurers that do not offer this coverage are willing to endorse it on if requested.  With Attorney Malpractice Insurance policies not being standard, this additional coverage can be called ‘Additional Coverages’, ‘Supplemental Payments’ , ‘Disciplinary Proceedings’, ‘Regulatory Inquiry Extensi...

Recent Article in the ABA Journal.  Certainly a different way to market for new clients. Some lawyers are irked by attorneys fake bar associations BY DEBRA CASSENS WEISS A Louisville lawyer is creating some bar associations on paper that have no actual members. One of entities created by personal injury lawyer Richard Breen is the Shelby County Bar Association, though it’s not actually in Shelby County, the Louisville Courier Journal reports. The bar association ...

Even though the insurer is no longer writing malpractice insurance the coverage for an issued Extended Reporting Period Endorsement (Tail or ERP) remains in force.  With this stated, as the years go by your insurer could have merged, been sold, liquidated or gone completely out of business.  Many times your insurance agent should be able to locate the proper insurer to report a claim. And if another  insurer as assumed your old insurer’s line of business that new insurer sho...

Question from Client: Is this Attorney Malpractice Insurance Policy Extended Reporting Period Endorsement (ERP or Tail) Full Prior Acts? Response: A common misconception is that there is a separate policy issued once an ERP is purchased on for an attorney malpractice insurance policy.  This is not the case.   Generally the endorsement is just one sheet of paper with only one or 2 paragraphs.   A lot of money spent for one sheet of paper. With an ERP there is no a sep...

I hate this discussion with attorneys.  As with many things in life there is no right answer.  Everyone likes ‘free’.  But ‘free’ does not always mean that there are no strings attached.   Attorney Malpractice Insurance for solo practitioners ‘free’ retirement tail can be a great benefit.  In most attorney malpractice insurance policies the retirement ‘tail’ is often referred to as a non-practicing extended reporting p...

Claim Study:  Failure to Investigate Client’s Potential Sources of Insurance Coverage Curiosity of Travelers Insurance Company One of the initial issues that a civil litigator retained to provide a defense should consider is whether the client has any insurance coverage that might be responsive to the claim or suit. Even in a situation in which indemnity coverage, coverage for damages awarded against the client, may be denied, an insurance policy may nevertheless provide separate co...

It’s important to encourage your staff to improve client relationships whenever possible. Surprise your staff with gift cards or a catered lunch when you see them go above and beyond for a client, or if they consistently assist you with providing great client relations. Reprinted from AttPro Risk Management Tip of the Month.  www.attorneyprotective.com

Given the issues with claims-made insurance for attorney malpractice insurance thought and planning on how to handle the attorney malpractice exposure should start prior to the split.  If your two person law firm is splitting up and each going separate ways, the best approach for the firm is to Purchase an Extended Reporting Period Endorsement (ERP/Tail) at the time the split occurs.  The ERP endorsement is attached to your last attorney malpractice insurance policy extending the repor...

What professional liability limits should a law firm carry is a frequently asked question.  It’s difficult for an insurance agent/broker to answer.  The broker simply does not know your law practice well enough. There is no set answer for a law firm.  Best answer is given the type of practice a law firm has and the type of clientele, if you make a mistake how much could it cost? Here are some of the issues to consider: Even knowing  the type of practice areas criminal...

Attorney Malpractice Insurance Policies are written on a ‘claims-made’ policy form.  A claims-made policy form requires that the covered act must be reported (claim made) during the policy period or during the extension of the reporting period (ERP/Tail).  Many Attorney Malpractice Insurance Policies provide for a “free” retirement or non-practicing extension of the reporting period (ERP) if the attorney has been with the insurer for the required number of years...

Many claims that we see come from FDCPA complaints.  This statute has been around for 40 years and these claims can be costly which is why collections is regarded as one of the higher risk areas of practice for attorneys.  The following question was sent to AskWilliam@Travelers.com about the FDCPA and who is subject to it.  This question and response is from the March 2018 Travelers Newsletter, “The Better Lawyer”. Ask William: The Fair Debt Collection Practices Act ...

Claims-made insurance is often misunderstood.  This misunderstanding can be costly. All Attorney Malpractice Insurance policies issued in the USA are written on a ‘claim-made’ policy form.  With claim-made coverage, once policy lapses, so does your past acts coverage.  Often the confusion comes from assuming that an Attorney Malpractice policy is just like your Business Owner’s Policy (BOP) or your Homeowner’s Policy.  A BOP or Homeowner’s Policy...

There are many reasons that a person or entity might want to provide funding helping a plaintiff pursue a commercial lawsuit.  It can be for personal reasons such as promoting a cause or settling a score.  But most litigation funding is now coming from professional  3rd parties that make a business on betting which cases will be successful.  The funding can be in the form of 3rd party financing in exchange for a portion of a successful verdict.  It can also be in the f...

Along with attorneys not understanding claims-made insurance coverage and the need to protect past acts, more than one attorney has ‘top sheeted’ their policy determining they have 60 days past expiration to renew or get new coverage because of the 60 day  ‘Automatic’ Extended Reporting Period (ERP).  Nothing could be further from the truth.  This mistake will bit you. The attorney malpractice insurance policy ‘Automatic’ 60 Day ERP provision d...

Question: I am told my Attorney Malpractice Insurance Policy has a ‘Hammer Clause’—What is a ‘Hammer Clause’? Response: There is no attorney malpractice policy that actually states or defines the term for ‘Hammer Clause’.  The ‘Hammer Clause’ is insurance slang for an Insuring Agreements or a Defense & Settlement Section that forces the insured to settle a claim. So how does a Hammer Clause work? Even though the insurer will no...

Law firm has a client(s) with business in many states, but their insurance carrier is only licensed in one of those states.  We have actually helped law firms having 3 different policies in 3 different states. This is a particular problem that many Attorney Malpractice Mutual Insurers have.  Some are only licensed in their domiciled state.  Often times they require the law firm if they are going to accept clients in another state to get a 2nd policy for that state.  This...

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In Wesco Insurance Co v Layton, Texas attorney Ledford E White took out an attorney malpractice insurance policy with Wesco for the policy term of March 14, 2014 to March 14, 2015. White had maintained malpractice insurance coverage since 1997 through various malpractice insurers. Wesco had not written the prior policy term for attorney White. On August 16, 2013, attorney White’s client, the Laytons, filed suit against attorney White alleging fraud and attorney malpractice....

In a previous blog, Attorney Malpractice—Substance Abuse the Practice of Law’s Dirty Little Secret, we detailed attorney’s struggles with substance abuse.  The ABA just documented another attorney whose practice of law has been cut short by his drinking.  His dependence on alcohol was so great that he even showed up at his disciplinary hearing impaired. If you need help or know of someone with a substance abuse problem contact your health professional, your local a...

    According to USA Today, New York Suffolk County District Judge is accused of repeatedly breaking into his neighbors house and stealing the 23-year-old daughters underwear out of the clothes hamster.  

Attorney Malpractice Insurers cap their exposure to losses through a variety of means.  One is by limiting the limits an insurer will post for a single law firm.  All attorney malpractice Insurers carry reinsurance helping to limit their exposure to “shock” losses.  Reinsurers in their reinsurance treaties dictate to the primary insurer the firm types written under the treaty and the limits that the reinsurer will reinsure.  The reinsurer also wants to limit their...

Moving a law practice can open up an exciting new chapter.  But make sure to add insurance to your moving checklist.  As with the practice of law, property and casualty insurance is regulated by each state.  Insurers and insurance policies by state can differ.  To prevent coverage gaps make sure that you notify all of your property & casualty insurance carriers and /or agents, including your attorney malpractice insurer as soon as possible.  Do not wait until renewal...

On June 8, 2017, we blogged about a US District Court case, Gonakis v Medmarc Casualty Insurance Company.  In this case the District Court granted a summary judgement for Medmarc Casualty stating that because of ‘prior knowledge’ of the claim and not disclosing this claim to Medmarc prior to purchase of the claims-made Medmarc Policy, that Medmarc was not liable for the claim.  And now for the rest of the story… Attorney Gonakis appealed this decision and the US 6th...

As an accountant and auditor through the years of working with attorneys and seeing some of the claims reported because of lack of controls I have always been amazed.  More than one attorney has decided that they only want to ‘practice law’ and leave the ‘business side of the law’ to lessors.  It is amazing to hear a sole practitioner state that it wasn’t his/her responsibility that his ‘trusted’ employee had stolen hundreds of thousands of dol...

As a law firm evolves through the years, its insurance needs may change.  Changes in a firm’s practice areas and clients might require different liability insurance limits than the firm required in the past.  Raising policy limits to meet a law firms needs causes no coverage issues.  But lower liability policy limits can cause unforeseen consequences.  Attorney Malpractice Insurance policies are written on a ‘Claims Made’ or ‘Claims Made and Reported...

Law firms often finance their attorney malpractice insurance with a premium finance company.  It is a good way to manage cash flow.  Problems happen though when a law firm allows their attorney malpractice insurance go into cancelled status with the finance company for premium nonpayment.  Law firms need to realize that the premium finance company as part of the agreement to finance attorney malpractice insurance is given a power of attorney to cancel the coverage for nonpayment. ...

Insured asks: What is ‘Step Rating’?  I did not find term defined or mentioned in my policy. Response: Attorney Malpractice Insurance policies are written ‘claims made’ policy form.   Most Claims Made Policies are Step Rated.  At policy inception of a law firms 1st ‘claims made’ Attorney Malpractice Insurance policy there are no past acts to cover.  With only the inception year’s exposure, premiums are relativel...

New York Attorney M Scott Vayer was admitted to practice law in 1980.  Somewhere around 2001 Vayer stopped reregistering with the Office of Court Administration (OCA) because of the stresses in his life prevented him from being able to complete his CLE.  He had good intentions of getting caught soon after 2001, but as time went by the task of getting his CLE current became “overwhelming”. Even though he had not registered and/or gotten current with his CLE he continued to...

Attorney Malpractice Insurance Policies do not have standard wording but a common exclusion is for excluding awarded attorney’s fees.  As attorney’s fees can run in the hundreds of thousands of dollars or more this can be a significant surprise if the firm is not aware of this exclusion.  More than one firm has become very angry when coverage is declined for this.  Normally attorney’s fees are carved out of the policy wording. Even though it is ‘excluded&r...

Attorney Malpractice Insurance policies use no standard form.  Even though the policy wording is different, they generally cover the same risks and exposures.  But as the saying goes, ‘the devil is in the details’.  Case in point is the definition of “an insured”.   Most polices cover current attorneys, employees and partners along with past attorneys employees and partners under the firm’s policy.  There are normally reporting requirem...

Attorneys do not question the need to back-up their computers or phones, but a few have a real problem with getting a backup attorney.   Not sure how a computer or phone’s data is more important than the attorney. From a malpractice insurer’s viewpoint a solo practitioner having a backup attorney is essential to help mitigate preventable legal malpractice exposures.  The backup attorney can step in when unexpected circumstances to the insured attorney makes it imposs...

Question from Law Firm: Law Firm’s Managing Partner states, “My Travelers Attorney Malpractice Insurance Agent tells me that it is going to cost 3 times expiring to buy an Extended Reporting Period Endorsement (ERP or Tail).  Our law firm is merging with another firm and is required to have an ERP.  The cost is a lot higher than I expected.  I am shopping for a better price.” Response: Shopping is the American Way.  But shopping for an ERP is a waste of t...

When completing the attorney malpractice insurance application a frequent question is how to fill out the area of practice grid (AOP).  I suspect that it is frequently done incorrectly. For firms that are currently in operation for over a year: The attorney malpractice application AOP grid asks for your AOP for the past year in 1 of 2 different methods: 1.       either a percentage of billable hours or; 2.       a percentage o...

Question from Attorney: I am contemplating merging my practice into another firm and becoming "of counsel" to that firm.  I may have a legal matter or two that is not included in the merger, and I will be retaining the existence of my current LLC My question is this:  can I maintain legal malpractice insurance that covers me for both the legal matters that are merged with the other firm, and the legal matters that are not merged?  How can we make this work? Response to Attorney...

Question from Attorney: Will you write an Attorney Malpractice Insurance Policy for me without prior acts coverage?  I currently have prior acts coverage and want to renew without any prior acts coverage to save money.  I do not want to purchase a Tail or Extended Reporting Period Endorsement from the incumbent insurer. Response: Attorney malpractice insurance is written on claims made policy form.  Voluntarily renewing without prior acts coverage means dropping insurance cover...

Question from Law Firm: My Attorney Malpractice Insurer just non-renewed my policy because of a claim,  now all I can get is ‘Surplus Lines’ or ‘Non-admitted’ insurers for a much higher premium.  How many years after a Legal Malpractice claim do I have to wait to get back with an ‘admitted’ Attorney Malpractice Insurer? Response: There is no set answer to this question.  Unfortunately for law firms with claims one of the best predictors of fu...

We post on client fee issues frequently.  Why, because it is a leading cause of attorney malpractice claims.  Avoid fee disputes by explaining the fee arrangement in great detail during the first meeting.  Confirm this understanding in writing and have the client agree by signing the agreement. When billing the client, ensure there is enough detail in the bill to allow the client to understand everything you are doing on their behalf. Use simple terminology and avoid abbreviatio...

We all get those calls that you have won the lottery or a cruise to the Caribbean.   Normally you always hang up.  But imagine if the call was legit.  According to an ABA Journal and Wall Street Journal Article that is precisely the problem the West Virginia Law Firm of Bailey & Glasser has. Firm lawyer John Barrett won a $20.4 million class action settlement against Dish Network.  He and his staff are attempting to call members of the class to let them know tha...

A Risk Purchasing Group (RPG) allows like risks to be able to purchase liability insurance on a group basis.  Formed by Congress in 1981, the Products Liability Risk Retention Act allowed the formation of groups to purchase liability insurance on a group basis.  This federal law superseded many state insurance laws that prohibited the formation of specialized exclusive groups to purchase insurance.  The law only applies to casualty or liability insurance not property insurance.&nb...

This case started out as an historical American submarine copyright infringement suit that should have never been brought.  Once the fuse is lite it is hard to put out.  We recently blogged about Attorney’s Fees not being covered by Attorney Malpractice Insurance.  In the Federal District court case of Leary v Manstan the Judge just awarded Attorney’s Fees to the defendant of $108,000, on March 27th, 2018. As noted in the transcript the reason for the suit was that, &...

Yesterday we blogged about client selection and how client selection helps prevent Attorney Malpractice Claims.  Today we have a Monkey attempting to file a copyright infringement suit against a photographer.  PETA decided that it was time to help an Indonesia Macau Monkey named Naruto protect his rights to the “Monkey Selfies” that he took in 2011. In 2011 Naruto got ahold of photographer Slater’s camera and took a number of “Selfies”.  PETA ...

Tough call, you found this terrific attorney that would be a great fit for your firm.  The attorney’s prior firm(s) work experience and skills are exactly what your law firm needs.  The attorney is concerned about the prior firm surviving after departure and has asked if you will pick up this prior acts exposure. When asked about adding prior acts, as an agent trying to minimize a law firm’s attorney malpractice exposure, we generally advise against.   Here is wh...

Some law firms are reluctant to report small claims.  Many times the law firm feels that the legal malpractice claim is small and they can cover it themselves.  These strategies will help their insurance history thus keeping their attorney malpractice insurance premiums lower.  But there can be expensive long term consequences to this strategy. For property insurance this strategy makes sense.  With a property claim generally you know with great certainty the amount of damag...

Lawyers that choose to go without malpractice insurance believe that because they work for a small firm and maintain close relationships with their regular clients, that they are immune to claims. Other attorneys believe that the chances of them facing a claim aren’t great enough for them to purchase an Attorney Malpractice insurance policy. The flaw in this logic is that small firm lawyers are just as likely to have a malpractice claim as some of their more high profile peers. Many small ...

Normally there is confusion at the Law Firm’s office when a request comes in to add a certificate for a mortgagee to an attorney malpractice insurance policy.  While we do write many firms’ business owners coverage (BOP) and are happy to add the mortgagee to a BOP; we decline when it is specifically for the malpractice insurance.  This is a recent request received for adding a mortgagee:  “Please can you send me a Certificate of Liability insurance for our cl...

Most Attorney Malpractice Insurance policies have exclusions for outside interest in other businesses that may or may not be a firm client.  This is one area that attorneys need to be careful about.  Every insurer’s malpractice policy has different wording.  Most of the time the policy wording differences are not a concern, but this is not the case with policy exclusions for outside interests.  Where one outside relationship may be covered by one insurer, is excluded by...

This often asked question only comes from the attorney that might be paying more than his friend.  I say might, because occasionally they are both paying the same premium.  But there are other cases where the premiums are dramatically different.   Because of insurance privacy laws, we cannot share insurance information to anyone about someone else’s insurance application or policy.  Nor will we without a signed release or a court order.   Both attorneys may ...

Attorney in Washington state had a continued history of double dealing with her firm. After being fired for the practice she mislead her new employer and continued the same arrangement with individual clients outside of her firm.  For that and many other sins she was disbarred.   (See the Court Opinion) For the rest of the story, read on: Washington Attorney Carllene M Placide was a non-equity partner at the law firm of Dorsey & Whitney with a base compensation of $225,000...

According to the Orange County Register, California Defense Attorney James Crawford got into a brawl with District Attorney Investigator Dillon Alley on the 10th Floor of the Santa Ana Courthouse.  There were conflicting stories about who started the brawl.  Different witnesses stated that each party had thrown the first punch.   Attorney Crawford had sued Alley for $10 Million over the brawl.  Alley counter claimed.  The jury awarded Alley $250,000 in punitive dam...

Come visit Mandy & Beth at our booth at the Annual Michigan Association for Justice Convention!

Because attorney malpractice insurance is written on a claims made policy form the prior acts date is important to determining if there is coverage for an act that may have occurred many years ago.  The first three things that an insurer looks at to determine if the claims made policy covers the loss are: 1.       Was the claim reported during the policy period? 2.       Did the act occur after the prior acts date? 3.  ...

Question from Attorney: I am still looking at alternatives for renewing my attorney malpractice coverage and cannot get firm terms until I get Insurance Carrier Loss runs from my incumbent insurer.  If I am a “few” days late renewing coverage is that going to be a problem?  I have a “grace” period.  There is a “grace” period, right? Response: Letting your Attorney Malpractice insurance lapse has consequences.  Attorneys sometimes see the...

I was meeting with the partners of a medium sized insurance defense law firm a few years ago, trying to understand why they were paying what seemed about 3 times what the attorney malpractice premium should be.  According to the practice area grid (AOP) the firm did 100% insurance defense.  But when we got to the claims questions, they had a family law malpractice claim.  In reviewing the loss runs the indemnity payment was over $500,000.  My next question to the partners was...

Attorney malpractice policies are not standardized.  There is no ISO attorney malpractice policy form.  Some law firms attempt to address the policy coverage differences by having an agent do a side by side policy comparison.   Unfortunately these comparisons are normally useless in finding a specific issue for a specific law firm’s practice.   This leaves insureds with additional due diligence needed when adding new clients, changing insurers or the insurer c...

Attorneys are very intelligent creative people who sometimes do dumb things.  Attorney Malpractice Extended Reporting Period Endorsements (ERP or Tail) are expensive.  Some firms have gone to great lengths to figure out ways to avoid buying an ERP to save money.  Unfortunately for the attorneys a bad creative solution can be costly.  The following money saving idea for an alternative ERP is not recommended. A three member law firm decides to end their partnership.  The ...

A number of years ago a law firm was being non-renewed by their current attorney malpractice insurer because of claims severity and frequency.  This meant that it was prohibitively expensive to find a replacement attorney malpractice Insurance policy that covered their prior acts.  This 13 member firm was looking at premiums with prior acts of over $350,000 for a $1million of coverage.  Without prior acts the premiums were around $125,000.  The ERP was going to cost over $100...

Attorney Malpractice policies are written on a claims-made policy form.  With claims-made policy forms, when the policy terminates so does the coverage and there is no coverage for claims reported after the coverage termination date.  The answer to this issue is an Attorney Malpractice Extended Reporting Period endorsement (ERP) should be purchased when a firm is closing and there is no successor firm.  As the ERP is an endorsement attached to the last policy in-force, the in-forc...

Attorney Malpractice Extended Reporting Period Endorsement (ERP) premiums are a multiple of the policy that is inforce at the time the coverage is terminated.  So if the premium is $20,000 and the firm purchases an unlimited ERP that the insurer has a multiplier cost of 3.5 the cost of that ERP is $70,000 (20,000*3.5). If you have an 8 member firm at the time the final malpractice policy was written $70,000 divided by 8 costs $8750.00 per member. Some insurers refund premiums when membe...

We have discussed a number of issues with Extended Reporting Period Endorsements (ERP or Tail) recently.  One that does not come up often is the remaining ERP policy limit.  Remember that an ERP is attached to the last inforce policy.  The ERP does not change the terms of the policy or reinstate limits that may have been used during this policy term. A little background claims-made insurance 101  Most focus when purchasing coverage on the liability policy limits.  Alm...

You report a malpractice claim now the insurer sends a Reservation of Rights Letter (ROR).  Don’t panic this does not mean that the insurer is about to deny your claim. An ROR is a standard procedure for most malpractice claims departments.  The ROR acknowledges the claim report while laying out the pertinent terms and conditions contained in the malpractice insurance policy.  As the name implies, while acknowledging the claim’s notification, it does not confirm that t...

Not all insurers offer “Career Coverage” for attorney malpractice insurance.  But “Career Coverage” is a useful option for an attorney that is joining a new firm and had attorney malpractice that is being terminated with an old firm.   “Career Coverage” provides coverage for past acts that occurred with another law firm by extending the prior acts date to a date that is before joining the current firm.  Malpractice coverage is then provided...

Attorney Asks: Why did my attorney malpractice premium not go down at renewal?  I’m switching to all criminal work which I know is a lower risk area of practice, but the renewal application only wants to know what was done for the past year.  I told insurer that I want the practice areas changed to criminal anyway.  I want a lower rate this year or I want a new insurer. Response: The legal malpractice insurance application is meant to capture what was done on retrospectiv...

Before your law firm’s malpractice insurance coverage sails into the sunset the wise professional considers purchasing an Extended Reporting Period Endorsement (ERP/Tail).  Many people think that a separate policy is issued once an ERP is purchased for a legal malpractice policy.  This is not the case.   Generally the ERP endorsement is just one sheet of paper and one or 2 paragraphs long.  There is not a separate policy issued.  The ERP is attached to the las...

The 2018 annual Ames & Gough survey used data provided by nine leading attorney malpractice companies that write approximately 80% of the attorney malpractice sold to law firms.   The key findings of the survey were: 1.       Conflicts of Interest was leading cause of malpractice claims because of inadequate controls 2.       Defense Costs continue their rise caused by e-discovery and rising defense attorneys fees 3.&n...

Question from Attorney: Why do I need prior acts coverage for Attorney Malpractice Insurance?   Response: Lawyers Professional Liability Insurance is written on a ‘Claims-made’ policy form.  ‘Claims-made’ coverage in its purest form would only provide coverage for covered acts that that occurred and were reported during the policy period.  Generally the policy period for Attorney Malpractice is written on an annual basis.    Many attorney mal...

Many attorneys are surprised to find that attorney malpractice insurance policies have a deductible.  The deductible may be mandated by the underwriter to address small frequent claims or chosen by the insured to reduce premiums or claim costs.  Not only can you vary the size of the deductible but you can use different options to help balance the cost of the insurance with the cost of claims.  The deductible options can be packaged into the policies or as an endorsement for an a...

Many an attorney has commented when completing the malpractice insurance application that they refer out or case share cases that they normally do not handle.  While a referral or sharing a case can be in the best interest of the law firm and client be cautious about making sure you document the relationship.  Over the years we have worked with a number of law firms that had been referring clients to other firms only to have an attorney malpractice claim filed against them for somethin...

We have actually helped law firms that were carrying 2 or 3 legal malpractice insurance policies because the malpractice insurers they had written with were only licensed in one state.  In many cases the premiums were cut in half once the firm was written on one policy.   Attorney malpractice insurance insurers that are not licensed to write in all states where the law firm has clients will many times decline to write coverage or limit coverage to just one state. Many mutual insu...

Based on a recent Lawyers Professional Liability Insurance Conference in Law Vegas, Argo Pro’s Kim Noble released its Top 6 Liability Risks for Lawyers: 1.       Cyberattacks—As reported in our Blog, in 2017 22 Percent of the law firms reported a Cyber Attack.  This is up from 14% in 2016. 2.       Privity Laws--Current case law shows a trend away from strictly adhering to privity laws, making it unclear how far an at...

Insurers look at 2 things when setting rates; frequency & severity of claims.  There is some caution with producing a list as different time periods and different jurisdictions can change these practice areas.  For example, up until 2009, residential real estate and title agency coverage was considered a preferred area of practice.   Even though the losses from the financial meltdown have passed; real estate is still considered a much riskier area of practice.  Est...

The best attorney in the world can still end up with an attorney malpractice claim by taking the wrong client or case.  Every firm needs to have a client intake procedure that they use for every new client and case.  It is best to have a written plan that everyone in the firm follows.  Once the intake procedure is in place the law firm needs to stick with it.  Even though it is the hardest word to tell a prospective client, the attorney sometimes needs to say “No&rdqu...

In the New Jersey case of Sheppard v Lentz the plaintiff had alleged that Attorney Perskie negligently referred a traffic personal injury case to Attorney Lentz.  Perskie had determined that he had a conflict of interest prior to taking Sheppard on as a client and referred the case to Lentz.  Perskie had taken no referral fee and had no case sharing arrangement with Lentz. The original personal injury case did not result in a recover for Sheppard.  Sheppard then sued Lentz for at...

Notice the title states avoiding not preventing attorney malpractice claims.  Every attorney I know complains about the rising cost of attorney malpractice insurance.  This is especially true for the attorneys that started practice in the 70’s and 80’s.  Back in the day the chances of being sued for malpractice insurance during one’s career were slim to none.  But for attorneys practicing in 2018, the chances of ending ones career without ever having a malpr...

Most attorney malpractice insurers require a backup attorney or they will not issue a policy for a solo practitioner.   Frequently the solo attorney will ask why this is a requirement and some even get mad refusing to go with an insurer that requires this. The attorney protests that that they do not need a backup attorney as they do not have court appearances to be covered or filing deadlines.  If the attorney is ill or out for a few days it is not big deal.  So why won&rsqu...

Yesterday’s blog discussed the need for a backup attorney and also hinted at the need for a succession plan.  This is especially important for small law firms.  No matter where an attorney or attorneys are in their career(s) having a succession plan is important to the overall health of the entire organization.  Without a plan if there is a sudden health or family issue that prevents the attorney(s) from practicing law, your firm will be like a rudderless ship heading toward...

Law schools may be great at giving lawyers a legal education, but many are very poor in preparing an attorney to run a business.  The last 2 blogs discussed succession planning and the need for a backup attorney, all important issues for running an ongoing law firm.  So once you have decided to start a new law firm and are ready to hang out your shingle you need a plan.  Whether you’re an experienced attorney or new in practice don’t start a new practice without a busi...

No one likes completing malpractice insurance applications.  It is one of the more boring and stressful things to do.  But properly completing the malpractice insurance application is very important.  Even though this process takes away from billable hours, if done incorrectly it can lead to claims denied, the firm being non-renewed, or if the error is material enough coverage rescinded.  If done correctly the first time, it might actually save your firm money on the malpract...

When we get this question, it is usually because the suspended attorney suspects that there will be unreported malpractice claims made against the attorney in the future.  Generally when a malpractice insurer learns about the suspension, the insurer will either set the malpractice policy up for non-renewal or cancel the coverage immediately with notice.  In either case the suspended attorney needs to act promptly to protect past acts coverage. The suspended attorney is no longer licen...

Errors made during the dissolving and forming of law firms with legal malpractice claims-made insurance policies can cost attorneys coverage.  Too often the attorneys either ignore or misunderstand the need for making sure that their past acts are covered.  While purchasing an extended reporting period endorsement (ERP) can be costly, it is often the only way to properly cover an attorney’s past acts.  Also as we have told numerous attorneys through the years that once you l...