Question 1

Do I need professional liability insurance?

Accepted Answer

Claim activity against attorneys has steadily increased in the past three decades. Lawyers in all parts of the country and all size firms are at increased risk every year. Encountering and dealing with a professional liability claim can be expensive and time consuming. Even if a lawyer or law firm is ultimately cleared, the money spent on defense and the hours of time devoted to addressing a claim — along with the anxiety of the situation — can be a very costly with respect to time and money. Professional liability coverage helps to ease that burden both by sharing the risk and by assuming much of the responsibility for defending against a claim.

Question 2

Why does the financial stability of my carrier matter?

Accepted Answer

You will want a legal professional liability carrier with strong financial strength. You want a carrier that is strong enough not only to take care of your needs today, but will be positioned to serve your needs tomorrow. This is important because even though your claim is reported today, it may take years to be resolved.

Question 3

What does lawyers' professional liability insurance typically cover?

Accepted Answer

Legal malpractice insurance is designed to provide coverage for claims that arise from "wrongful acts" committed in the rendering of legal services in your capacity as a lawyer. Policies generally provide both indemnification coverage and claims expense coverage. Covered acts usually also include: Services as a notary public. Services as a title agent and/or title agency. Acting as a trustee or executor of an estate in connection with representation of a client. Acting as an officer, director, or member of a legal professional association Broader coverage can often be added through amendment of various endorsements depending upon the lawyer's circumstances and the carrier's interest and capacity.

Question 4

Is there anything that is NOT covered by professional liability insurance?

Accepted Answer

The uncovered areas of professional liability insurance are usually referred to as "exclusions." Common exclusions include: Fraudulent acts. Criminal acts. Malicious acts. Dishonest acts. Services rendered to a business enterprise that is owned or controlled by the insured lawyer or law firm. Services rendered as a fiduciary under the ERISA Act of 1974. Bodily injury or property damage generated by the lawyer or law firm. Claims involving one insured against another insured in the same law firm

Question 5

Who does professional liability insurance cover?

Accepted Answer

Professional liability insurance covers lawyers and employees of the law firm acting on behalf of the firm — and the firm itself — as specified in the policy.

Question 6

How is my premium determined?

Accepted Answer

There are several factors underwriters use to determine a firm's premium and coverage. Underwriters will determine coverage and rates differently by reviewing: Area of practice. Policy limits. Deductible. Number of full-time and part-time attorneys. Practice location. Prior acts coverage. Claims experience

Question 7

What is a prior acts date?

Accepted Answer

The prior acts date — also referred to as the retroactive date — represents the date after which services you provide are covered by your professional liability insurance policy. The prior acts date typically is the effective date of the first claims-made policy you purchase and will continue to be shown on subsequent continuously renewed policies.

Question 8

What is an Extended Reporting Period Endorsement ("Tail Coverage")?

Accepted Answer

Extended reporting endorsements — also referred to as "tail coverage" — provide for the reporting of claims following the termination of your last professional liability policy. This coverage is especially important when your firm ceases to exist, and allows you to have continued coverage for the services you provided prior to closing your practice.

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