A loss only deductible, which is also commonly referred to as first dollar defense, is a deductible type that will only apply in the event that there is a settlement of a claim.
This means that if you are sued, and there are defense costs and other types of incidental costs, they’re not going to apply to your deductible. Your deductible is only going to apply in the event that there is some type of loss, i.e. settlement.
The importance of dual calendaring.
According to the most recent ABA studies, malpractice claims stemming from calendaring errors continue to be a common mistake made by law firms. One of the ways to reduce calendaring errors is to make sure that your firm or office has a dual calendaring system in place.
Dual calendars can include calendars on your computer, laptop, desktop, other electronic devices, paper calendars, wall calendars, desk calendars, diaries, phones, there’s a slew of them. My point being is that there are actually several ways to implement a dual calendar system, and you should choose one that works best for you and your firm.
The risk management benefit of having a dual program in place is the backup benefit. If a calendar entry is missed on one system, it should be picked up by the other system. Hence the chance of a missed deadline by the office is reduced with a dual calendar system. consistency with the entering of the information, weekly cross checking of the system and having two people maintaining the system are key elements to a successful program.
So if you want to reduce your risk of a legal malpractice claim, and lower your malpractice insurance premiums, make sure you have a dual calendaring system in place.
What is the difference between professional liability insurance and general liability insurance?
The best way to answer that question is really just to give you a couple of examples. A professional liability policy covers the professional for the work that he or she does on behalf of their clients. So a lawyer’s professional liability policy would cover a lawyer for those professional services that they are doing or performing for their clients.
A general liability policy is what we like to call “slip and fall insurance”. If somebody were to walk into your office and slip and fall where they may get hurt a little bit, they could turn around and sue you for bad back medical claims or their hospital visit, etc. This is where your general liability policy would come into play.
As general liability and professional liability kind of sound the same, they are two very different types of coverage.
Does my professional liability insurance policy Cover me for cyber risk?
The short answer is, sometimes. This is a great question. There are some policies out on the marketplace that do advertise that they cover both professional liability insurance and cyber. But if you’re really serious about covering yourself in the event of a cyber breach, you need to look into what is called a standalone policy, not any kind of combo cyber professional liability policy.
If you do look into that type of coverage, you’ll notice a few things. One, the cyber coverage is usually ancillary to the primary coverage of professional liability insurance and the limits that are available for the cyber are usually very, very small, somewhere between $15,000 and $25,000. Last year the average cost of a cyber breach for a small to mid sized firm was about $250,000. The other important note is that 50% of those that did have the breach, were out of business within six months of the breach.
Contact us at INtegrity First Corporation with any questions you may have regarding cyber liability insurance.
Why do you need professional liability insurance?
The easy and obvious answer to this question is so the professional protects himself or herself against claims of malpractice. A more insightful or thoughtful answer is, you buy professional liability insurance not only to protect yourself, but also to protect your client.
In the event that you do make a mistake or you do make an error, you want your client to be able to be made whole again, because of your error. So don’t just buy professional liability insurance to protect yourself, buy it to protect yourself and your client.
If you have any questions regarding professional liability insurance, contact us at INtegrity First Corporation.
Is there a minimum limit that you need to carry on your legal malpractice policy as an attorney in Pennsylvania?
There is no limit that is required. As a matter of fact, you don’t have to carry legal malpractice insurance at all. However, keep in mind, if you do not carry at least $100,000 per claim, and $300,000 aggregate limit, you do have to disclose that fact to your clients that you do not carry the minimum of 100/300. On a side note, 100/300 limits is really not sufficient either.
It is recommended that if you are going to carry legal malpractice insurance, you need at least half a million dollars per claim. Don’t get caught uninsured or underinsured.
Contact us at INtegrity First Corporation and we will be glad to answer any questions regarding legal malpractice insurance.
How often should you shop your legal malpractice insurance? It doesn’t hurt to actually look at other coverages every year, but it doesn’t pay to actually switch every year. That’s a dangerous practice to change your legal malpractice policy carrier year after year after year. You do not want to do that because of the type of policy it is. It is a claims made policy and switching year after year after year is not a good practice.
Also, when you’re shopping legal malpractice insurance, in order to get a solid quote from a competing carrier, you need to complete that carrier’s application. So you have to ask yourself, if you’re looking to save $100 but they’re asking you to complete one of their applications, how long is it going to take you to complete that application? An hour, two hours, three hours? What do you charge an hour? $100 an hour, $200 an hour, $300 an hour?
It actually could end up where it’s costing you money to switch carriers to save premium dollars. Kind of a crazy thing!
We at Integrity First Corporation are celebrating our 14th year in business this month and we want to thank all of our clients who made it possible because without you, we wouldn’t have made it one year, let alone 14 years. So thank you very much.
With any anniversary, I think you start to reflect as to what has changed over the course of the years (other than the color of my hair). I actually had a client give me a call this past week. He asked me if I thought the legal malpractice industry was a lot more competitive than what it has been in the past because he’s been receiving several emails, phone calls, and faxes every day from people that he’s never heard of offering legal malpractice insurance. I told him no, as far as I was concerned, it was not more competitive. It’s actually, from a coverage standpoint, probably less competitive than what it has been in the years past because there are less carriers that are actually offering the coverage.
As I started thinking more and more, I thought the reason why it seems that it’s more competitive is because there are more agencies and more agents that have gotten appointments or assignments to be able to offer quotes and coverage terms and we as an industry have actually made the legal malpractice product more of a commodity at times than that of a professional product. Agencies now send out what’s referred to as indication sheets and emails that say “ If you answer these three or four questions, we’ll throw a price at you.” and that’s what it’s become. So, it does seem that it’s gotten more competitive because of that practice. And, from my perspective, I think that’s sad.
As an agency, we pride ourselves in trying to establish a long and solid relationship with our clients, getting to know them, and making sure that they’re getting the coverage that they need. We keep up to date and up to speed with the changes in the policy and the changes in the industry. We’re not just going to throw out four questions at you and say, “Hey, answer these, here’s your quote, don’t really care what you do, not really sure if the policy is going to cover everything that you need. But we’re gonna give you a price that’s less than what you’re paying.” We’re not going to do that.
We’re going to continue to do what we have been doing the last 14 years, for the next 14 years. So, again, I want to thank all of you for giving us the opportunity to be of service to you, and we do look forward to another 14 years of being in business. Thank you very much.
What is privacy regulatory claims coverage in a cyber liability policy?
Wow. That’s a mouthful.
The regulatory coverage in a cyber liability policy actually pays for and protects you against the fines and sanctions that may be levied against you from state, local and federal governments for not properly ensuring the data that you’re responsible for.
Don’t get caught, make sure this coverage is in your cyber liability policy.
Does your business include providing notary services for your clients?
If it does, you may have a potential coverage gap in your errors and omissions insurance policy.
In the times that we live in today with the COVID virus in the state mandated social distancing rules and regulations, the notary industry has come up with what they call RON services, remote online notary services. This basically allows the notary to perform notary reacts without the signer of the documents physically appearing in front of the notary. And while this may be a great thing to do now, during these times, it does pose insurance concerns and coverage issues.
Most errors and omissions policies which cover notary acts contain an exclusion or exclusionary wording that prohibits a notary act without the signer of the documents physically appearing in front of the notary.
Well, if you are notarizing a document online, obviously the signer of the document is not physically in front of you. What do you do?
I suggest that you call your insurance broker that sold you your errors and omissions policy and have him or her confirm with the insurance carrier, that the RON services will in fact be covered under your policy.
We at Integrity First Corporation have called all the carriers that we deal with for the errors and omissions coverage and they all have answered positively with regards to the remote online notary services. They have confirmed that the policies will respond to the RON services provided that those services have been done in accordance with the state approved guidelines and regulations.
So again, you need to do the same. Call your broker and confirm that coverage does exist for these types of services in your policy.