With lawsuits against individual attorneys on the rise, it may not be enough to rely on the professional liability coverage purchased by law firms. To insure lawyers against any limits their firm’s coverage cannot cover, global broker Marsh has created a new form of insurance protection.
Attorney PersonalProtect is designed to cover in excess of any professional liability protection a law firm purchases. This covers individual lawyers in the event their needs exceed their firm’s coverage, their firm dissolves, or they are between jobs.
“Although law firms typically obtain professional liability insure on a practice-wide basis, genuine concerns exist among individual lawyers regarding the adequacy of shared insurance protection,” said Richard May, FINPRO E&O placement practice leader for Marsh. “Events such as a firm’s breakup or bankruptcy, for example, could lead to professional liability coverage being canceled with no extended reporting period provision to cover subsequent claims made against individual attorneys.”
Marsh’s timing appears to be good, as attorneys’ professional liability increases. Although not quite to the level of medical liability, Insurance Law Center Executive Director Peter Kochenburger believes lawyers now face the same level of liability as real estate brokers or insurance agents.
“I understand lawsuits against lawyers have been going up over the years,” Kochenburger said. “That doesn’t really surprise me.”
Though Kochenburger mentioned that it is extremely difficult to prove a case of legal malpractice against a lawyer, it can nevertheless be a very expensive ordeal and proper insurance coverage would be of good use.
Ann Davine, Marsh’s FINPRO law firm practice leader, also noted that increased movement of lawyers between firms also necessitates adequate coverage.
“Law firms’ quest for growth via acquisitions is also adding to professional liability concersn for lawyers,” Davine said. “In some cases, the acquiring firm may have to assume financial responsibility of rthe acts of lawyers added to its roster, which could ultimately lead to erosion of coverage by claims not originally anticipated.”
Marsh’s Attorney PersonalProtect provides $1mn in coverage for a $2,500 premium. The coverage will include prior acts and remains in effect even if the lawyer moves between firms.