It’s true. Managing partners are making some key mistakes that are costing the firm money and more importantly, imperiling their firm. They are pressed for time, so some of these mistakes are from a lack of attention, but it’s mostly from a piecemeal understanding of key decision points for their professional liability program.
The four mistakes:
1) Areas of practice Most partners erroneously assume that this is a routine item on the application that can be handled by the legal administrator. In reality, non-lawyers often make mistakes on this section that can cost the firm significant extra premium and put the coverage when needed in jeopardy. Insurance companies will source this section for misleading information (or fraud) even when it wasn’t intentional.
2) Coverage limit How much coverage to purchase is usually the last decision of this multi month torturous process. Eager to move on to actual billable legal work, managing partners underestimate the importance of how much coverage they should have. Most firms just buy what they had in last year’s policy, but after many years of not reflecting litigation inflation and changes in the firm risk profile, this can be a substantial error. This analysis should be carefully and thoughtfully analyzed with your broker. Learn how by clicking here.
3) Claims Reporting to your insurance company and disclosing updated claims information on your application is a critical role as managing partner. Your broker can help you do it correctly, but missteps here can void your coverage.
4) Choosing your broker Lastly, choosing your professional broker to represent your firm is the most important decision (should be the first in the shopping process). The main point is to choose the broker just like you are choosing any professional – who will best represent you to others. Check their qualifications. Try these questions.
Managing Partners do not have time or ability to become experts in every topic. By focusing your time on these four areas, you will be maximizing your time serving your firm.