By Samantha Wright
Loss exposures in the professional liability insurance sector vary according to the type of professional liability insurance at issue.
In the large accounting firm arena, sizable insured losses can stem from an accounting firm’s prior association with clients caught up in high-profile scandal-ridden fraud allegations (i.e. Madoff, Sanford, etc.) or large client bankruptcies (Lehman Brothers, Washington Mutual, MF Global, etc.), says John Rafferty, Executive Vice President of Arch Insurance Group US.
Larger law firms may face similar claims, especially if they offer advice and services on potentially controversial corporate matters such as merger and acquisition deals, tax opinions, complex corporate structures, and FCPA (Foreign Corrupt Practices Act) matters, Rafferty added.
Small law firms and individual lawyers, meanwhile, can face an array of claims stemming from client dissatisfaction (wills, marriage dissolution, real estate transactions, M&A documents, etc.).
Medical providers also have significant exposure. It is not uncommon for doctors and/or hospitals to get sued for misdiagnosis, mistreatment and failure to properly monitor a patient’s worsening condition.
“In the medical arena, oftentimes the largest insurance claims involve alleged malpractice in situations that have resulted in a substantially-impaired or disabled patient with a long life expectancy, yet needing expensive on-going medical and/or life and financial assistance,” Rafferty said.
One thing that creates claims for architects is dispute for fees. “If an architect or engineer has to sue their client to get their fee, almost routinely there will be a countersuit for negligence of the performance of the work, creating a professional liability claim,” said Mike Hill, principal of Denver-based Hill Program Managers.
“Nobody thinks about that when they are trying to collect money. Usually they are just upset. They don’t think they will get a countersuit.”