Professional Liability Insurance (PLI), “Errors and Omissions” (E&O) Insurance, and Malpractice Insurance are different names for the same product.  It is designed to provide coverage for claims that arise from “wrongful acts” committed by lawyers and employees of a law firm acting on behalf of that firm.  Often a policy will also cover lawyers currently with your firm who are sued over activities performed at a prior firm as well as lawyers or employees no longer with your firm for actions taken while at your firm.   In the event the covered professional commits malpractice and becomes legally obligated to pay damages to a third party, the professional liability insurance policy will defend the insured in the suit and pay damages up to the limit of liability of the policy less the deductible.
 

While lawyers in many states are not required to have professional liability insurance, carefully consider the following factors in determining whether you should remain exposed:
o    Personal asset protection
o    Litigation expense
o    Client reputation protection
o    Referral service-required
o    Client-required

As a legal professional, you are well aware of today’s litigious climate.  Don’t understate your vulnerability.
 

Client relations, HR activities, firm growth strategy, risk management procedures, marketing communications, contract development, project portfolio, fee administration, acquisitions or divestitures, and many other internal and external firm practices have a major impact on your professional liability.  It is typically those aspects which may seem to have less impact and which go unnoticed that leave you most exposed.

MGW optimizes clients’ professional liability coverage and/or renewal positions by continually working with firms to proactively manage the many diverse business components which directly and indirectly impact liability.  MGW employs a total-firm approach which includes a wide and deep cross-functional assessment of your firm’s strategies and procedures (including Human Resources, Risk Management, Operations, Quality Control, Client Relations, Contract Development, Communications, etc.), measure of and realignment with your risk profile, and development and selection of a customized, highly competitive professional liability insurance plan.  

For more information on what daily practices your firm is employing that may have significant unidentified professional liability implications, please contact us.
 

A firm’s strategies, policies, and practices can be optimized to improve its professional liability posture.  The following are just a few areas which should be addressed: 

Executive Management: Consider governance by committee with a peer review system which evaluates all lawyers including partners.  Insurers and clients value this internal quality control as a means of reducing risk of malpractice.

New Business Acquisition:  There should be a formal approval process guiding new business procurement.  The process should include the following:

o    Management committee assessment
o    Credit check of new client
o    Conflict of interest review
o    Alignment of lawyer generating the new business with firm expert in
      the subject at hand
o    Policy for accepting or rejecting a client who has been represented
      previously by other  legal counsel for same issue

Conflict of Interest: Develop, publish, and enforce a conflict of interest process and system.  Every firm should train their employees to follow a prescribed process for discovering and managing a conflict of interest.  This formalized approach enables a systematic and consistent method to unearthing potential conflicts.   Additionally, utilize a written or computerized conflict checking database. 

Communications: The written engagement letter should be as comprehensive as possible, including arbitration and mediation provisions where applicable.  When declining or ceasing representation appropriate documentation should be sent, as well.  

Logistics: A central system should be maintained to control and monitor critical dates.  Scheduling is just one critical component to what should be a greater Total Quality Control program.

For more information on how to optimize your professional liability posture by implementing key practices and programs, contact us.
 

Renewal is a suboptimal time to change brokers.  You are then usually in a position of merely selecting the lowest priced option vs. the best advocate and provider. 

As your practice evolves, so will your professional liability insurance needs.  MGW will review your current situation, understand your firm objectives, and realign your insurance to fit your business strategy.  It is preferable that this is managed proactively, not at a time when you are pressured to quickly find a broker because your policy is expiring.

Typically MGW’s clients are firms that have evolved and become more sophisticated or complex such that their current broker cannot fully meet their new strategic and firm-specific professional liability demands.

Your professional liability broker should have the skill set and experience to provide the following services at the highest quality:

Market Representation:  As your representation in the insurance marketplace, your broker must have a good pulse on market activity, the nuances to and criteria of the various underwriters, and how to best present your firm.  Your broker is not merely a conduit to the markets, but also one who should offer invaluable counsel on policies and practices to employ in your firm and how to answer questions on applications.  Additionally, a broker should have strong relationships with insurers and assist the underwriters in their interpretation of your responses when determining your coverage and/or premiums.

Professional Counsel: Your broker delivers some of your most important risk management and liability insurance advice.  The best broker will seek to intimately understand more than just your claims activity and coverage requests and will work with you to understand the professional liability implications to your total firm activities so that policy and firm are continually strategically aligned as your firm evolves.

Loss-Prevention and Professional Development Resource: Your broker should review and help negotiate your professional service agreements, assist with counsel selection, and guide you to relevant professional development opportunities.

Claims Advocacy: Your broker should have a deep understanding of the expectations of all parties in a claims process, including clients, attorneys, insurance company claims representatives, etc., and be able to guide and service you through the seemingly unwieldy process so you can remain focused on your business.  Your broker is your key resource to connecting you to other professionals that can help manage the process, including experienced counsel, consultants, etc.

Industry Expertise: Your broker should be a specialist in professional liability insurance for law firms who can respond effectively and responsibly to the unique requirements of your practice.   The specialty broker should demonstrate commitment to and deep experience in both the field of law as well as professional liability insurance to provide you with the best customer service possible.

MGW’s unique lawyer-broker management, extensive experience in placing professional liability policies for law firms, and distinct practice areas enable us to provide world-class service across these vital selection criteria.

A professional liability insurance specialist for lawyers does not broker insurance for the marine, healthcare, or trucking industry.  It is because of this focus on law firms that the specialist is able to maintain the trust and respect of key underwriters as well as the in-depth and up-to-date knowledge of critical law firm management issues.  MGW brings not only a specialized focus of servicing law firms but also a staff of lawyer-brokers who understand first-hand the complexities of law firm practices and how to fulfill their unique insurance needs.

Yes.  Some insurers provide lateral hire coverage while many do not.  If you are moving away from a lateral hire form of coverage significant gaps might exist.

Care must be taken to assure the following:
·    Retroactive coverage is not less than the expiring policy.
·    All additional insureds, including predecessor firms, continue to be
     covered  by the new insurer.
·    No unreported claims or potential claims are lingering.
·    No two policy forms are identical.  Be certain that you know the
     differences.

Professional liability insurance premiums are based on various quantitative and qualitative factors, including the following:
Like firm state benchmarks, number of attorneys, years covered attorneys have been in practice, number and types of practice areas, claims history, risk management procedures, firm size, firm management and infrastructure, limits and deductibles chosen, breadth of coverage requested (e.g., prior acts coverage), etc.

MGW works with its clients continually, between and during renewal periods, optimizing client firm policies, procedures, and practices across various functions and disciplines to ensure that they are best poised at renewal periods to receive the most comprehensive, competitive, and strategically aligned policies.
 

As one of the largest specialty brokerages in the markets we service, MGW has competitively advantaged scale negotiating capabilities.  It is not our size alone, however, which enables us to control our clients’ costs of coverage significantly better than our competitors.  In fact, the notion that the biggest broker wields the most negotiating prowess is a myth.  It is the relationships we have with the major insurers and the trust, respect, and value they place on our law firm-specific knowledge of our clients’ needs and portfolios that allows for a very efficient and competitive bidding process by the insurers and, ultimately, the best written policies at the best prices for our clients. 
 

Our deep law firm client-base and experience provides us with unparalleled access to the most competitive and comprehensive markets.  We are constantly evolving our network to ensure our clients have the best coverage at the lowest rates.  Current insurers with whom we work include:
ACE, Argonaut, Axis, Beazley, Carolina, Catlin, Chartis, CNA, Colony, Darwin, Essex, Evanston, Interstate, James River, Liberty, Lloyd’s, National Casualty, Navigators, RLI, Travelers, Valiant, XL, Zurich.
 

Our reach is growing rapidly to best service our clients around the globe.  MGW is currently licensed to broker insurance policies in Illinois, Wisconsin, Indiana, Missouri, Ohio, Michigan, Texas, California, Nevada, North Carolina and Washington, D.C.
 

With 4 unique practice areas in Crisis Management, Risk Mitigation, Strategic Planning, and Coverage Advocacy, we work with our clients continually, between and during renewal periods, to optimize those strategies and operations which increase efficiency and preempt adverse professional liability effects.  We participate in many of our clients’ management and professional responsibility committee meetings and provide ongoing continuing education opportunities.  As lawyers who broker professional liability insurance, we are valued by our law firm clients who seek and appreciate the unique perspective we are able to offer across the firm’s various daily operations.
 

This is an understandable concern since most claims are not made until long after the alleged act of malpractice.  Typically professional liability insurance for lawyers provide what is called “claims made and reported” coverage, providing coverage to claims made and reported to the insurer for activity which occurred prior to the policy’s purchase.  Note, however, that insurers often seek to place some limits on claims made and reported via a “prior acts date” designation so as to minimize their overall risk with the insured.  To reduce chance of exposure you want to avoid gaps in coverage.

MGW works with its clients to determine when tail coverage, extended reporting periods, and other such options should be pursued to maximize coverage against potential prior incidents if and when selecting a new carrier.

For answers to additional questions you may have, please call us at 847.412.1414 or email:  info{at}mgwelbel.com