Professional legal liability insurance covers liability for damages arising from the rendering of or failure to render professional or legal services. Protect yourself and your firm from claims not covered by your commercial general liability coverage.

Professional liability insurance, also referred to as professional indemnity insurance, protects lawyers against negligence claims made by their clients.

 

Professional Liability Considerations

The need for professional malpractice liability coverage developed due to typical general liability insurance policies only responding to bodily injury, property damage, personal injury or an advertising injury claim. Because professionals – like lawyers – can cause claims without bodily injury, property damage, personal injury or an advertising injury claim, additional coverage is needed to fill this gap.

Common claims made on these policies include negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. For example, if you failed to file documents in a timely fashion, it would not cause bodily injury, property damage or advertising injuries.  Because of this, the general liability policy would not be triggered.  But because the document filing was not done on time or correctly could directly cause financial losses, and may be attributed to a misrepresentation of your capabilities, the professional liability coverage would be triggered.

What Exactly Does Your Law Firm Need?

When buying professional malpractice liability coverage, there are considerations that will help you determine exactly what you need:

  • Is the insuring agreement broad enough to capture all of the current and future work of the policyholder? Determine if the policy covers the scope of your firm’s professional tasks and services by reading the definition of the covered services in the policy. For example, in a law firm’s professional liability coverage, the operative definition would be “legal services” or a comparable phrase. ARCW Insurance can help you determine if all professional tasks would be covered under the operative definition or if additional clauses would need to be added.
  • What if there is a sale, merger or change in position at your organization? Discuss what these possible changes in services mean for your coverage. Is there approval needed to continue coverage?
  • Are there any exclusions? Look at the list of exclusions that resist coverage. Review the list to make sure it does not preclude coverage for any professional services or tasks that you need covered.
  • Is an extended reporting period an option under the policy? These provisions offer extensions of time to report claims that would otherwise fall outside the policy period—as long as the act/omission resulting in the claim occurred during the policy period. Find out what extended reporting period options are available and discuss how much time the policyholder may need to report a claim.
  • Can the policy be customized or modified? Can extensions be added? Common additional coverage includes disciplinary proceedings or reduced retentions and may be of importance to your business.
  • Have there been any past tasks or activities at your firm that could potentially result in a claim? Have there been past instances where a claim was filed? What was the result? Discussing the specifics of these with ARCW Insurance can help determine what coverage specifications you need now, to prepare you for the future.

Other ways to protect your business, in addition to professional liability insurance include the following:

  • Establish a high standard for product and service quality control at your organization.
  • Keep all company records up-to-date and accurate.
  • Train employees thoroughly and properly.
  • Ask ARCW Insurance for safety and compliance information.

This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.  Should you have any questions or would like to discuss your risk exposure with your firm’s lawyer insurance, please contact the insurance pros at ARCW Insurance.  We are here to help.