July Attorney Pro Risk Tip of the Month

Don’t give informal legal advice to friends or family.
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.

Tip courtesy of  www.attorneyprotective.com

Reporting A Claim Under A Claims Made and Reported Policy

Most professionals know to protect themselves and their clients with the purchase of a professional liability insurance policy, commonly referred to as an E&O policy.  What most professionals don’t know or don’t care to know, is when and how to properly report a claim or potential claim to their insurance carrier.

Initially, the most important issue when reporting a claim is the timing of the notice to the carrier.  All carriers have different reporting requirements but most state that the claim or potential claim must be reported to the carrier in the policy period YOU first become aware of the claim or potential claim.  Some carriers are even more restrictive and will use the term “immediately report” or “as soon as possible after first becoming aware of the claim.”  No matter the wording in the policy, the timing of the notice to the carrier is absolutely vital to the claim being covered under the policy.  A delay in reporting the claim or potential claim to the carrier can lead to a declination of coverage due to “late reporting.”  Late reporting is a term no insured wants to hear in a claim situation.  Do not fall into the trap of thinking it will just go away, or hold off on reporting for fear that your premium will increase.  Providing professional services for others unfortunately will give rise to a claim or potential claim.  These must be dealt with immediately.

All carriers have slightly different policy wording with regard to the timing of claim reporting.  The best way to reduce the possibility of a declination due to late reporting is to report the claim as soon as you first become aware of the claim or potential claim.  Regardless of “how much time” the policy provides, immediate reporting of the issue to the carrier will be viewed as favorable by the carrier and the claims personnel.  It may even provide a good night sleep for you!