What Is Directors And Officers Liability Insurance?

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A common practice amongst professionals, especially attorneys, is the acceptance of board positions on for-profit and not-for-profit entities. And although most of the time the decision to accept these positions is done with all good intentions, it doesn’t mean that there is no exposure related to the acceptance of those positions. 

If you’re an attorney, or if you’re any professional, and you’re sitting on a board now or you’re contemplating the acceptance of a board position, I think there’s a couple of things you need to do. 

First off, you need to go to that organization and ask them if they have a separate directors and officers policy. If they do, great! Ask them for a copy of that. That way, you can put it in your file, and you’ll know you know the limits that they have to cover you, the deductible if there is any deductible and it’s applicable to you and the policy period so you know when it expires, and when it needs to be renewed. 

If the organization comes back to you and says no, that they don’t have a separate D&O policy, I think you need to ask them if they would consider or have they ever considered purchasing a D&O policy. And this is not just for you, the person asking the question. You’re asking for all of the other directors and officers, the employees of the organization, and even sometimes the volunteers of that organization. It’s something that they really need to consider and look at. Secondly, you need to contact your legal malpractice insurance company. 

Now, how does accepting a board position affect your coverage? Most policies actually exclude your acts as an officer or director of an outside organization. There is also an ownership interest in most policies that state that if you have any type of ownership, or even if you just own, manage or control an outside entity, your professional services that you provide to them are excluded under the policy. 

So there are definitely exposures that can and do arise when you accept a position on a board, be it not-for-profit or for-profit. 

My comments are not intended to stop you from accepting any position on any board. My comments here are merely to ask you to take a step back before you accept, ask a couple questions, and make sure you know the exposure that you’re accepting by accepting the board position.

Term Life Insurance vs. Whole Life Insurance

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Labor Day is upon us, which means it’s the month of September, which brings us back to the fact that September is Life Insurance Awareness Month. You know, when most people think about life insurance, they’re usually thinking about two different types of policy – either a term life policy, or a whole life insurance policy. Do you know the difference?

Term Life Insurance

My opinion is pretty straightforward and pretty cut and dry. Term Life insurance is just that – it’s only life insurance. You purchase the policy for a certain amount of time, and you have the life insurance for the length of that term, or that amount of time.

Most people consider a term life policy when they’re buying a house. Let’s say you buy a house for about $300,000; you have a 30-year mortgage on it, you then go out and you buy a 30-year term life policy for $300,000. In the unfortunate event that you perish during that term, the $300,000 is paid out, and that goes to pay off the mortgage on the house. There is no cash value at the end of the 30 years.

If you’re fortunate enough to live a long life and you live past that 30-year term, the insurance just ends, and you walk away from the contract.

Whole Life Insurance

Whole Life insurance is a little bit different. Whole life insurance does have a savings component associated with it. Therefore, every time that you pay your premium, a certain amount of that premium will go to pay for the life insurance and a certain amount of that premium will go into an investment vehicle.

At some point during the term of that whole life policy, you’ll start to build up a little bit of a nest egg or a value or sum that you’re able to withdraw from. Some of them allow you to even take a loan against it. Again, in the unfortunate event that you do pass during the term of whole life insurance policy, the life insurance proceeds are in fact paid out.

But again, if you do live that long and happy life, and you live past the term of that whole life insurance policy, you will in fact have a nest egg that you can withdraw or take a loan from and spend any way that you want to.

One thing to keep in mind is that term life insurance policies are usually less expensive than a whole life policy. I hope this little bit of information helps you decide which type of life insurance is best for you.

Life Insurance Awareness Month Is Approaching

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It’s hard to believe it’s mid-August already. Pretty soon it’ll be September and fall will be here. Speaking of September, I want you to keep in mind that September is life insurance Awareness Month. It gives us all a good chance to sit back and review the changes that have occurred over the past year, and how those changes affect our life insurance coverage.

If you bought a new house, sold a house, had a new baby, maybe your oldest child went to college, or there’s several other situations that could impact the life insurance coverage, but certainly those ones just mentioned really do impact your need for life insurance.

Take a couple of minutes during the month of September and review your situation. If you have any questions with regards to life insurance, give me Don Ivol a call at 412-563-2106. I’ll be happy to review it with you.

In the meantime, don’t forget, take a couple of seconds and enjoy the last couple of weeks of summer. Whether you go golfing, go on vacation, or visit one of our lakes in Pennsylvania like I am. Everybody deserves to enjoy a couple weeks of rest and relaxation.

How To Reset Your Password For The INF ShareFile Portal

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In this article, we’re going to review what to do if you forgot your password to the INF ShareFile portal. The first thing to do is not worry, it only takes a few minutes to reset the password.

To start that process, go to integrityfirstins.sharefile.com and click on the forgot password link. Now, you’ll want to enter your email address in the field.

The email address that you’re going to want to use is the email address that is associated with your legal malpractice application. That’s most likely the email address that INF used to give you access to the portal. Once you have your email in, click the I’m not a robot, and go through the rigmarole that Google is going to require to prove that you are in fact human. Click Send.

This should result in a Reset Password email being sent to your email address.

Go to your inbox and you might have to do a refresh to see that email come in. Click on that email and you can see that there is a reset your password now link contained within the text of the message.

If you do not receive the reset ShareFile password email in your inbox, you’ll definitely want to check your spam folder, there is a chance that your email provider may look upon the reset ShareFile password email as spam.

Click on the reset your password now link.

ShareFile reset password

You can see for security purposes, INF has a few password requirements. The password needs to have at least one uppercase letter, one lowercase letter, two numbers, a special character and it has to be at least 12 characters in length. So select a new password that you’ll want to use for the portal.

Make sure that you typed them the same and then click on Reset password. You can see ShareFile will confirm your account password has been reset. Now if you want to sign in to the portal, click on back to sign in. Put in your email address, put in that new password and click on Sign In. 

If you have any questions about password reset process, email Stacey Ivol at sivol@integrityfirstins.biz or call at 412-563-2106. 

How To Use the INF ShareFile Portal

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 Do you know that you have 24/7 access to your legal malpractice insurance policies and your completed applications that you filed through Integrity First Corp? All of this information is contained on the Integrity First Corporation online portal. The portal was designed with you in mind and for your convenience. But you’ll never know how convenient this online portal is unless you use it.

In this article, we explain how simple and convenient it actually is to use the portal.

Why do we use the ShareFile portal?

the answer is simple. We want to make your documents as easy for you to get to as possible, while keeping them as safe as we can. ShareFile encrypts everything in this client portal with 256 bit encryption. In non tech speak, that just means your files are really, really safe in our cloud.

Accessing the ShareFile portal

The first thing you’ll want to do is log in to the portal. To do that, you’ll go to integrityfirstins.sharefile.com. You can always find the portal on our website.

Your username is your email address. So you’ll just want to put in your email address, then you’ll want to enter your password. If you forgot your password, you can click on the Forgot Password link. We cover how to reset your password in this article.

Now, click on Sign In and you’ll be taken into the folders that you have access to within the INF ShareFile portal.

As you can see this example user has access to one folder. And they have a renewal month of May, which is 05 then the name of the company, and then the month and date of LPL renewal. Now within the folder itself, you can see that we have the policies and the renewal apps from 2018 all the way up to 2022.

The other thing that we have access to at all times is the INF privacy statement. Anytime you want to see the on a privacy statement, or any policy or renewal that you may have questions about, just click into that document. ShareFile will open it for you, you can view it in this viewer below or you can also download or print the document.

If a client were to call you and ask you for your renewal, or if you are at a closing and they want to see a copy of your policy, all you have to do is hop into ShareFile, click on the policy that you want, download it and send it to them.

The other thing that’s really cool is that you can actually be notified when INF uploads anything into your ShareFile portal. So if you want those emails sent to you, you’ll just click this checkbox in the red square below.

You’ll receive an email anytime INF uploads a policy, renewal, makes a change to the privacy statement or makes any changes whatsoever. It’s not clicked by default because we know that not everyone wants those notices, but if you do, definitely check this checkbox. 

If you have any questions on using or entering the portal, please send Stacey Ivol an email at sivol@integrityfirstins.biz or call at 412-563-2106. 

What Is A Step Rating?

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The most common question I get as an insurance broker from new lawyers or new law firms is why did my premium on my professional liability insurance increase especially when we haven’t had any change at all in our areas of practice? And probably more important, we haven’t had any claims, but yet my premium goes up by 20%? What’s the deal? How did that happen? 

Well, the simple answer to that question is, step rating.  Step rating is really nothing more than the carrier’s attempt to price your increased exposure as you practice year to year. 

As an example, the very first year that you, the lawyer, purchase a professional liability policy is probably going to be the least amount that you ever pay for professional liability insurance. The reason for that? You have no baggage, the carrier is basically covering you from the effective date of your policy, day one, going forward, there’s nothing in your past that actually is going to impact the premium, or gives the carrier concern that there might be a claim out there waiting to happen. 

Your first renewal, the carrier not only is going to price it for everything that you’ve done in the past, you know, which is one year, however, they also have to price it for what you’re going to do for the next 12 months. Therefore, their exposure basically doubles. Therefore, they have to increase your premium to capture that risk. 

The same holds true for the third year, not only is the carrier going to insure you for everything that you’re going to do for the third year, but they’re also insuring you for everything that you did in year two and year one. Basically, their exposure is tripling – they have to capture that risk by again, increasing your premium. 

The good news behind step rating is that there is a cap to it. It’s not going to increase your premium for the next 30, 40 years. Depending on the carrier, step rating could cap at five years, could cap at six years, could cap at seven years. Again, it depends on the carrier that you’re insured with. But again, the good news is that it does cap, it doesn’t continue on and on and on. 

What Is A Hammer Clause?

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What is a hammer clause

If you have a legal malpractice policy or have been looking for one, I’m sure you have heard the term “Hammer Clause:”.  It has been and is a widely discussed term. Well what is a hammer clause anyway? Great question!

Simply put, the hammer clause which is located in the consent to settle provision of the policy is the carrier’s ability or attempt to force you to settle a reported claim.  In its strictest form, you, the insured, must accept the negotiated settlement of the carrier.  You have no input. 

Over the years, the consent to settle provision and hammer clause have been revised and modified. Today, some carriers state that they will not settle any claim without the consent of the insured, who’s consent shall not be unreasonably withheld.  What’s unreasonable right?  It is not defined in the policy.  

Other carriers state that you, the insured, can refuse to settle a claim agreed to by both the claimant and the carrier.  However if that claim continues and settles for a higher amount than what was originally agreed to by the carrier and the claimant, you are responsible for the difference! Yiokes, that could be expensive.  

Still there are other types of modified versions of the “clauses.”  These versions allow you to reject a settlement the carrier and claimant agree to. and if that claim settles/closes for a higher amount than the original settlement agreed to, the carrier will agree to pay a certain percentage of the increased settlement.  You will be responsible for the rest.  This is kind of a middle of the road hammer clause.

The best type of consent to settle provision for you, the insured, is to have no hammer clause.  Some, not many carriers do offer this.  They give the insured the absolute right to refuse to settle with no consequence or hammer!

How do you know what you have in your policy?  Best way to find out is to read the policy and discuss it with your broker.

Disciplinary Actions Against You

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Today, a lawyers malpractice insurance policy is usually written with several different types of ancillary coverages included in the policy.  These are benefits that are in addition to the coverage for the actual or alleged act of malpractice.  

One of these benefits found in most policies is coverage for disciplinary proceedings.  Based upon what I have seen, the disciplinary coverage is one of the most beneficial coverages in the ancillary category.  Most policies that offer this type of coverage will have a sublimit available to the insured.  This sublimit of coverage can range anywhere from $10k to $250K, some will offer this in the form of a per proceeding limit with a policy maximum while others will offer the limit as a policy aggregate.  

Also, some carriers will specify that the deductible will apply while others will specify that the deductible does not apply.  A nice feature.  Accessing this type of coverage is similar to reporting a claim, you must report to the carrier as soon as you are aware of the disciplinary action against you.  Late reporting can cause declination of coverage.

Having to appear or to report to the disciplinary board can be nerve racking experience.  If this happens to you make sure you retain counsel to assist you and notify your insurance carrier to report the issue.  Don’t represent yourself, obtain counsel and use your policy coverage to assist with the costs.

Do’s And Don’ts of Buying Legal Malpractice Insurance

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When purchasing something, Everyone wants a good deal right?  Same is true for your legal malpractice insurance.  You want the coverage that you need but you don’t want to overpay.  

I’ve been helping lawyers for more than 30 years purchase legal malpractice insurance and I have seen the good and the bad when insureds shop for their legal malpractice insurace.  

Here are a few do’s and don’ts when shopping your legal malpractice insurance:

Do use a broker that can shop more than one legal malpractice carrier.  Let one broker obtain multiple quotes.  Involving more than one broker can be confusing not only for you but for insurance carriers if they receive multiple submissions for the same risk.

Don’t change carriers every year.  Lawyers malpractice policies are written on a claims made basis and switching carriers every year can be an issue when it comes to claims reporting.

Do take into consideration your personal circumstances before changing carriers: are you retiring soon?  Most carrier require that you be insured with them for 3 consecutive years to qualify for a free retirement tail.  Retirement tails can be expensive!

Don’t base your decision strictly on price.  You have heard it before I know, but it is true.  There is more to it than just the pricing.

Do read the policy before changing carriers.  Make sure you are getting what you asked for.  Things like prior acts coverage, career coverage, exclusions are often overlooked

Don’t shotgun your application to several carriers or brokers that you know or may have heard of.  There are many carriers that don’t have an interest in writing your coverage, so why take the time and apply.  Your broker should know what carriers are interested in writing a policy that covers your specific exposures.

Switching legal malpractice carriers is no small matter.  Remember it protects your reputation and protects your clients too.  If you’re contemplating making a change, do it right.  

Have You Taken The Steps To Purchase A Stand Alone Cyber Policy?

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cyber insurance

Over the last couple of years, I’ve been telling clients and prospective clients alike that now is the time to buy a stand alone cyber policy.  If you haven’t taken the steps to purchase a policy, there couldn’t be a better time than right now.  

Claims are increasing: Ransomware, malware, phishing schemes and fraudulent funds transfer just to name a few of the claims issues that seem to be an everyday occurrence.  Because of the increasing claims, obtaining a standalone cyber policy is getting a little more difficult.  

Carriers are beginning to get a little more selective on who and what industry they want to insure. Policy terms and conditions are beginning to get a little stricter and some carriers are even beginning to exit the marketplace and not offer coverage at all.  

Just a few months ago, one of the larger carriers that write cyber insurance did exit the market and no longer writes the coverage.  Worse yet, one of the ugly consequences of all this, is that the pricing on cyber coverage has started to increase and let’s not forget that ugly word inflation that also is playing a part!

If you haven’t purchased a cyber insurance policy yet, do it now or at least apply for coverage so you can review the offer and make an informed decision.  Keep delaying the process or decision and you may find yourself unable to secure coverage at all and the market has made the decision for you. 

Have any questions about the topic discussed in this article? Contact us today! 412-563-2106.