In the world of professional liability insurance, ERP stands for an extended reporting provision.
This usually comes in the form of an endorsement, and it usually occurs in a few situations:
With a claims made policy, you need this extended reporting period provision to be issued, so your prior acts or your past professional services are covered under the last policy that you purchased.
When underwriters look at a risk, there are several factors that come into play in the pricing portion of the process.
A couple of the major driving factors or driving forces are:
These are all things that an underwriter will look at that will either cause your premium to go up or cause your premium to go down.
Usually I write about lawyers, legal malpractice insurance policies, coverage pricing, and some risk management ideas. But in this article, I want to talk to you about a different kind of coverage.
As a matter of fact, it’s a coverage I just recently purchased for my office. It’s commonly referred to as small group benefits. This is a benefits package that protects the office with life insurance and disability insurance for the employees. There are a number of different benefits that can qualify under this small benefits insurance package including long term disability, short term disability, accident insurance, vision insurance, and dental insurance.
The reason why this is an important topic is because usually, when you think about group insurance, you think about insurance for larger groups. This was true years ago when you couldn’t get a group policy if you had less than 10 employees. So this coverage was really pretty much exclusive for groups larger than 10 people… but not anymore. Now, if you have a group of two or more people, you’re eligible for the benefits.
There are several different, what I call, beauties in the package and one of them happens to be guaranteed acceptance. This means that for you and your employees, you don’t have to worry about completing a health insurance application or worry about your past health as your acceptance is guaranteed up to a certain maximum benefit limit.
The other beautiful thing about this is that all of your full time employees are eligible for it. So they’re not going to pick and choose, okay, we can only have these two people or these three people or this one person – no, all of your full time employees are actually eligible for the program.
The other item that I want to bring up is that it is a high-tech administration where everything is pretty much done online. Your employees will have access to a portal that they can go on where they can see what their life insurance benefit is, what their disability benefit is, what their vision coverage is. It’s all online, it’s all done with a snap of a finger for your employees. This is a great thing.
The other nice thing from an employer perspective is that you can actually pay the premium online on a monthly basis. That’s what I like about it – I didn’t have to come up and stroke a check for $1,000 for the year or 2500 bucks for the year.
Whatever that premium is, you can actually pay for it monthly, making it very affordable. It’s a great benefit, your employees will really appreciate it and if you’re an old person like me, you’ll enjoy it because you know that the premiums will be a little bit less than what I think you’re used to seeing when it comes to life and disability.
If you’re interested or have any questions with regards to the program, shoot me an email or give me, Don Ivol, a call at 412-563-2106.
What is a hammer clause in a legal malpractice insurance policy?
It’s a great question that I get asked a lot. Simply put, a hammer clause in a legal malpractice policy is the carrier’s ability to force you to settle a claim that you really don’t want to settle.
How does the carrier do this?
The carrier basically just says, look, we can settle this claim for X number of dollars. You say, well, no, I don’t want to settle it for X number of dollars. And the carrier says, okay, we won’t settle it, we’ll keep fighting it, but if the end result is a settlement larger than what we could have settled it for back here, you’re responsible for the difference. You’re on the hook.
Are you looking for ways to lower your legal malpractice insurance premiums and help turn prospects into firm clients? Look no further than your firm’s website and online presence.
Insurance carriers now review your firm’s website in an effort to try and get a better picture of you. They are looking at the site content describing your areas of practice, the type and size of your clients, risk management procedures, articles in the firm newsletter, blog, your Google My Business profile and social media feeds.
They are trying to determine if your law firm’s site conforms with the ABA and or state bar association rules and guidelines on advertising and e-platforms. What the underwriter sees and interprets from your site will impact on how he or she views the exposure your firm creates and will influence the pricing up or down.
One of the content items that seems to regularly raise a red flag is the listing of the firm’s practice areas on the site. Firms will often boast several areas of practice on the site, some of which they haven’t had a case in that area for years.
I realize that it may seem like a good idea to list as many areas as possible to try and draw in clients. I have even spoken to firms that have told me that they want the web site to project the firm as having that “large firm” appeal or sophistication impact.
From an underwriting and pricing standpoint, know that it can have a negative impact. Especially if several of the areas of practice are considered higher risk areas such as: Oil and Gas, Securities, Intellectual Property (copyright patent trademark), Class Action and some Employment law.
Additionally, from a marketing standpoint, listing areas of practice that you do not typically deal in can have negative effects on your search engine optimization as well. Google wants to know what your firm does well and they want to show your website to people searching for that skill.
When you list many areas of practice and don’t have a concentration on a particular niche, your website is less likely to show up in the organic search results for what you do best!
Please know, I am not trying to tell you how to advertise or practice. That obviously is up to you. I am telling you that you should be as accurate as you can with the content on your website, Google My Business listing and social media profiles.
Know that people other than prospects are looking at your website including insurance carriers and even your competition. Keep your online presence updated, relevant and interactive.
It will give the insurance carriers an accurate picture of your firm, coordinate and confirm the information you list on the malpractice application and help drive the type of prospects to your website the firm wants to have as new clients.
What is step rating and how does it affect my legal malpractice premium?
Simply put, step rating actually causes your premium to increase. Why? Because each step is equivalent to an additional step or an additional year of exposure.
When you’re a new lawyer, or you’re just opening up your firm, you’re down on the lowest level, or the lowest step because you don’t have anything or any ghosts or skeletons in your closet that the carrier is concerned about.
But each year as you practice, you go up each step. And again, the more steps, the more exposure. The more exposure, the more premium the carrier is going to charge.
So simply put, step rating causes your premium to increase.
What is a retroactive date?
When you purchase professional liability insurance, most of the time, you’ll see what’s known as a retroactive date listed somewhere on your declarations page of the policy. This retro date actually refers to the date that the coverage will go back to, to cover you for your professional services.
If you are an older professional, like me who has been around for the last 30 years, you might have a retro date of 1/1/1989. Or if you’re a new professional, like my daughter, you might have a retro date of 1/1/2015.
Again, just remember, it’s the date that the policy will refer to or go back to cover you for the professional services you perform for your clients.
How do I report claims under my professional liability insurance policy?
This is a great question. You spend a lot of money on a professional liability policy and you want to be sure that when and if you do have a claim to report, that it’s done properly and promptly.
Usually the carrier has three ways for you to report claims. One is by email, two is by fax, and three is by us mail. The contact information for these three methods of reporting claims is usually found in the policy itself or on the declarations page.
Remember, don’t hesitate. Don’t wait. prompt reporting of claims is great. I’m Don I your insurance guy.
What deductible should I choose for my legal malpractice insurance policy?
That answer is really a personal preference. You can go on both ends of the spectrum from a zero deductible, $10,000 deductible or even higher. It really depends on your comfort level.
If you are comfortable having zero deductible and paying a higher premium, because that’s what’s going to happen, then take that.
If you’re not comfortable with paying the higher premium and having a low deductible, take the lower premium and higher deductible. Again, I call it sleep insurance. Whatever you’re comfortable with is what you want to choose.
What is an aggregate deductible on a legal malpractice insurance policy?
An aggregate deductible is nothing more than an annual deductible as opposed to a per claim deductible. That’s it!