Lawyers Professional Liability Insurance insurance is not required by law in South Carolina or Georgia. However, it is the only way to ensure that your law practice, along with all of your attorneys and staff, is fully protected if there is a legal malpractice suit. Simply relying on your ability to as a competent law practitioner is not enough to protect yourself against an expensive Lawyers Professional Liability Insurance suit. Even if a professional malpractice suit is unfounded and easy to disprove, the defense costs to the professional can still be enormous. As a child of two attorneys, I can tell you that lawyers are quite good at arguing unfounded points.
Lawyers professional liability insurance defends the insured against these suits and minimizes the financial damages incurred by the law firm. Once a suit is brought about, the insurance provider will hire an attorney who specializes in professional liability suits to represent your practice. The insurance company will cover all of the attorney fees for the case within the coverage limit. Lawyers should be the first to know that expert legal counsel is not easy to find and certainly not cheap. Luckily, an Lawyers Professional Liability Insurance policy allows the insurance provider to bear this burden.
In today’s world, there are so many risk exposures that every law firm faces, no matter the size of the firm. Any attorney at your firm or their staff members can make a mistake that results in a lawsuit against your firm. Legal malpractice suits can stem from any number of occurrences ranging from the most common error - docketing & calendaring errors to failure to know/apply law. Your firm can be sued just trying to collect fees from a client. Do you always use engagement letters? We live in an increasingly litigious society, and for that reason Lawyers Professional Liability Insurance suits are becoming more and more common.
When seeking Lawyers Professional Liability Insurance coverage for your practice, it is important to remember that almost all Lawyers Professional Liability Insurance policies are written on a “claims-made” basis. For a claim to be covered under this policy, the occurrence of alleged malpractice and the arising claim must both be made during the coverage period. A Lawyers Professional Liability Insurance policy comes with a “retroactive date.” This retroactive date marks a past date on which the policy will begin coverage. This date is the farthest back that the insurance company will cover occurrences. For example, if you purchase a Lawyers Professional Liability Insurance policy effective July 1st, 2017 through July 1st, 2018 with a retroactive date of July 1st, 2015, then your policy will cover any claims made during that 2017 - 2018 coverage year which stem from occurrences as far back as the retroactive date of July 1st, 2015. If there was a covered claim made in December 2017 regarding a case from 2016, this policy would cover the defense and damages from that claim. Because the insurance company is assuming the risk for a time that has already passed, the number of attorneys and cases that a firm has worked since the retroactive date helps determine the premium for a Lawyers Professional Liability Insurance policy.
If a claim is brought against you by a client during your coverage period, but the occurrence itself occurred during a time when you did not have Lawyers Professional Liability Insurance coverage, your policy will not cover this claim. Returning to the previous example, if this same claim in the 2017 - 2018 policy year resulted from a case in 2014, this policy would not offer coverage because this occurrence happened before the retroactive date. This claims based coverage only highlights the importance of continuous Lawyers Professional Liability Insurance coverage. If you switch policies, it is possible that there will be a coverage gap between the expiration of one policy and the retroactive date of another policy. Coverage gaps can leave attorneys susceptible to paying out defense costs and damages from claims made years down the road. Some policies offer “coverage tails” that protect the insured against claims made during a defined period of time after the policy has expired. But the only way to be fully protected is to obtain continuous Lawyers Professional Liability Insurance coverage throughout your law career.
When it comes to the health and longevity of your law practice, it is imperative to go with the best. Here at Triest Agency, we only write Lawyers Professional Liability Insurance policies through insurance carriers with an A or better rating from AM Best, such as Attorney Protective (a Berkshire Hathaway company) which has the top AM Best Rating of A++. It is crucial to know you are working with a top quality provider because this insurance provider will serve as the primary protector of your practice in the event of a suit. As lawyers, it should be easy to appreciate the potential effects of just one unexpected law suit. It is our job to ensure that a malpractice suit will be the least of your concerns when building a law practice.
I would be negligent in my effort to explain this type of coverage without noting that lawyers professional liability insurance policies are not generic. These are not standardized policies and vary between insurance companies. Never assume that you will have the same coverages if you make a change to a new carrier. These policies, as you are well aware, are contracts that include exclusions. The policy defines what is covered and what is not. Read the definitions and exclusions. This short blog post is only presented to impress upon our attorney clients and friends practicing law in South Carolina and Georgia that this coverage is necessary and should never lapse. A lapse could cause serious damage to the retroactive date. Read your policy and the Account Executives in the Lawyers Professional Liability Department of the Charleston office of Triest Agency are always available to assist and discuss the policy with you.
Triest Agency Summer 2017 Intern
The University of Georgia Honors College, Athens, Georgia
Risk Management & Insurance Major
Terry College of Business
Anything written in this blog is not considered to change, alter and in any other way change the actual coverages in a lawyers professional liability insurance policy. Read your policy for specific information.