Obtaining lawyers professional liability (LPL) insurance is typically high on the to-do list for all attorneys – whether starting out or the partner in an established law firm. Attorneys are held to a standard of care and accountable for the work they perform, and know only too well that they can end up as a defendant in a legal malpractice case should something go wrong. The largest number of claims against attorneys comes from the real-estate practice area, with those working in the corporate and securities sector coming in second. Conflicts of interest, failure to follow up, and abandonment of representation or failure to address a client’s needs all make up frequent claims. The American Bar Association (ABA), in fact, estimates that attorneys will have at least three legal malpractice claims brought up against them in the course of their careers.
While lawyers professional liability insurance is a must-have component of any comprehensive protection plan for law firms, not all policies are created equal. It’s important to review the policy features to determine whether it will provide coverage or not for specific claims scenarios. Most LPL policies vary in how they define “covered professional services”. Typically, they include services rendered as an attorney, arbitrator, mediator, notary public, executor or trustee, for example. But there are cases when a firm performs professional services that don’t fall under the definition. Examples may include acting in the capacity of a lobbyist, a member of the board of a bar association, an author of legal articles or a speaker at legal conferences. Most carriers can expand the definition of covered professional services through the use of an optional endorsement.
There is also a wide range of limits and deductibles available under an LPL policy that should be looked at closely.
In addition, there are key endorsements that should be reviewed and added if applicable for the client. For example, one policy coverage enhancement available is to pay for the cost of defending an attorney in a proceeding brought about by a disciplinary board alleging professional misconduct. Carriers providing this coverage will pay for the costs of defending one of a firm’s attorneys up to a certain limit for each proceeding and an aggregate limit for all such proceedings in a given year.
You can also add prior acts coverage, which will protect against claims that arise from acts, errors or omissions occurring at some point prior to the policy’s inception date. A policy with “full prior acts” coverage covers claims arising for work done in the name or on behalf of the insured firm without a time limitation. Some policies have a “retro date” or retroactive date, which limits prior acts coverage to claims arising for work done in the name or on behalf of the insured firm on or after the retro date.
“Tail” coverage is also available to cover a lawyer’s exposure for claims arising from work done during a particular policy period well past the expiration of the policy period, since such a claim may not be made for several years after the work is performed.
There are many other considerations in securing the right LPL policy for a client. RPS specializes in providing LPL solutions and can assist you in tailoring a policy that fits your insured’s risk profile.