When you purchase professional liability insurance, most of the time, you’ll see what’s known as a retroactive date listed somewhere on your declarations page of the policy. This retro date actually refers to the date that the coverage will go back to, to cover you for your professional services.
If you are an older professional, like me who has been around for the last 30 years, you might have a retro date of 1/1/1989. Or if you’re a new professional, like my daughter, you might have a retro date of 1/1/2015.
Again, just remember, it’s the date that the policy will refer to or go back to cover you for the professional services you perform for your clients.
How do I report claims under my professional liability insurance policy?
This is a great question. You spend a lot of money on a professional liability policy and you want to be sure that when and if you do have a claim to report, that it’s done properly and promptly.
Usually the carrier has three ways for you to report claims. One is by email, two is by fax, and three is by us mail. The contact information for these three methods of reporting claims is usually found in the policy itself or on the declarations page.
Remember, don’t hesitate. Don’t wait. prompt reporting of claims is great. I’m Don I your insurance guy.
What deductible should I choose for my legal malpractice insurance policy?
That answer is really a personal preference. You can go on both ends of the spectrum from a zero deductible, $10,000 deductible or even higher. It really depends on your comfort level.
If you are comfortable having zero deductible and paying a higher premium, because that’s what’s going to happen, then take that.
If you’re not comfortable with paying the higher premium and having a low deductible, take the lower premium and higher deductible. Again, I call it sleep insurance. Whatever you’re comfortable with is what you want to choose.
A loss only deductible, which is also commonly referred to as first dollar defense, is a deductible type that will only apply in the event that there is a settlement of a claim.
This means that if you are sued, and there are defense costs and other types of incidental costs, they’re not going to apply to your deductible. Your deductible is only going to apply in the event that there is some type of loss, i.e. settlement.
According to the most recent ABA studies, malpractice claims stemming from calendaring errors continue to be a common mistake made by law firms. One of the ways to reduce calendaring errors is to make sure that your firm or office has a dual calendaring system in place.
Dual calendars can include calendars on your computer, laptop, desktop, other electronic devices, paper calendars, wall calendars, desk calendars, diaries, phones, there’s a slew of them. My point being is that there are actually several ways to implement a dual calendar system, and you should choose one that works best for you and your firm.
The risk management benefit of having a dual program in place is the backup benefit. If a calendar entry is missed on one system, it should be picked up by the other system. Hence the chance of a missed deadline by the office is reduced with a dual calendar system. consistency with the entering of the information, weekly cross checking of the system and having two people maintaining the system are key elements to a successful program.
So if you want to reduce your risk of a legal malpractice claim, and lower your malpractice insurance premiums, make sure you have a dual calendaring system in place.
What is the difference between professional liability insurance and general liability insurance?
The best way to answer that question is really just to give you a couple of examples. A professional liability policy covers the professional for the work that he or she does on behalf of their clients. So a lawyer’s professional liability policy would cover a lawyer for those professional services that they are doing or performing for their clients.
A general liability policy is what we like to call “slip and fall insurance”. If somebody were to walk into your office and slip and fall where they may get hurt a little bit, they could turn around and sue you for bad back medical claims or their hospital visit, etc. This is where your general liability policy would come into play.
As general liability and professional liability kind of sound the same, they are two very different types of coverage.
Does my professional liability insurance policy Cover me for cyber risk?
The short answer is, sometimes. This is a great question. There are some policies out on the marketplace that do advertise that they cover both professional liability insurance and cyber. But if you’re really serious about covering yourself in the event of a cyber breach, you need to look into what is called a standalone policy, not any kind of combo cyber professional liability policy.
If you do look into that type of coverage, you’ll notice a few things. One, the cyber coverage is usually ancillary to the primary coverage of professional liability insurance and the limits that are available for the cyber are usually very, very small, somewhere between $15,000 and $25,000. Last year the average cost of a cyber breach for a small to mid sized firm was about $250,000. The other important note is that 50% of those that did have the breach, were out of business within six months of the breach.
Contact us at INtegrity First Corporation with any questions you may have regarding cyber liability insurance.
The easy and obvious answer to this question is so the professional protects himself or herself against claims of malpractice. A more insightful or thoughtful answer is, you buy professional liability insurance not only to protect yourself, but also to protect your client.
In the event that you do make a mistake or you do make an error, you want your client to be able to be made whole again, because of your error. So don’t just buy professional liability insurance to protect yourself, buy it to protect yourself and your client.
If you have any questions regarding professional liability insurance, contact us at INtegrity First Corporation.
Is there a minimum limit that you need to carry on your legal malpractice policy as an attorney in Pennsylvania?
There is no limit that is required. As a matter of fact, you don’t have to carry legal malpractice insurance at all. However, keep in mind, if you do not carry at least $100,000 per claim, and $300,000 aggregate limit, you do have to disclose that fact to your clients that you do not carry the minimum of 100/300. On a side note, 100/300 limits is really not sufficient either.
It is recommended that if you are going to carry legal malpractice insurance, you need at least half a million dollars per claim. Don’t get caught uninsured or underinsured.
Contact us at INtegrity First Corporation and we will be glad to answer any questions regarding legal malpractice insurance.