The 10 Point Professional Liability Insurance Comparison Checklist: The fine print that you need to know in buying professional liability insurance. Part 1.
When competitively bid, premiums were down another 10-15% for most law firms on their renewals. But comparing quotes is more complex then just the premiums and deductibles. You have to rely on your broker to explore all of the insurance companies and analyze the offers to your needs.
While you might not worry too much about an exclusion for SEC claims in a quote if you only do plaintiff personal injury work, you should worry about the SEC exclusion if you do Trusts and Estates work. We have seen very broad SEC exclusions so that the client could be without coverage should a claim arise in a tangential practice area. Your broker has to read the entire exclusion (not just the summary) and discuss it with you.
Here are the first 5 categories of points of differentiation that are relevant to your law firm:
1) Prior Acts Coverage – the most important part of your policy is coverage for legal work that you have done in the past. Some policies are firm wide dates and some have specific attorney dates. Get this wrong and your policy is worthless.
2) Limit – Per claim or Aggregate. Depending on your practice and risk profile, structure accordingly.
3) Deductible – Per claim or Annual Aggregate. Again, depending on your practice area, this can be important.
4) Defense costs – Do these expenses erode your limit and deductible available for settlement or judgment against you? This item is critical for your appropriate limit selection in your purchase.
5) Territory – If you have any parts of your firm internationally, review this carefully.
In our next post, we’ll discuss the next 5 important points of comparison that emanate from the policy definitions and exclusions. This is the really small fine print that determines if your premiums are being well spent or wasted.
