The Record is Broken!

So guess what has dropped the most in price in 2009 in lawyer’s malpractice policies? The winner for 2009 is … Excess Limit. The record for the floor premium has been smashed for excess liability insurance. Typically an Excess Limits policy is coverage beyond a primary layer of a $5 million policy. If there ever was a time, to pick up cheap excess coverage, now is the time. So how do you know if you need higher limits that require an Excess policy? Your broker can advise best, but usually firm growth or an increase in exposure in risky practices are the most common triggers for purchasing more coverage.

Look before you Lateral – and the tips to do it right

The legal industry is quietly changing the legal employment landscape by adding lateral hires from firms in trouble in a torrid pace. It might be a good business move to take advantage of the times, but you need to look at the whole picture to make the best decisions.

Below are 4 risk management areas of concerns and their solutions for law firms:

1) The money isn’t what it seems. If you hire someone from a failing firm, though they might be a star business generator, it might be later determined that the first year fees must go back to the old firm. Solution for this is: know what you are getting into and only hire for long term as the short term may go back to the old firm.

2) Disputes with the old firm can ruin your success. Cross claims of breach or withholding funds between your lateral and his old firm could tie financially tie him up. Solution here might cost you some money, but might save his focus on bigger issues and you want his head in your game. Come up with some negotiated amount of money that you’ll guarantee the lateral will come away with from the old firm.

3) Mind the Insurance gaps. If he has a claim and the old firm’s insurance policy is no longer in force due to the firm’s collapse and lack of tail coverage, he’ll be distracted and nervous for his financial ruin from professional liability claims from the breakup. Second worst scenario has your insurance covering his past indiscretions; also not a good ideas as you might need your insurance for your own mistakes. Best solution here for you to help him purchase the tail coverage.

4) Your firm gets blamed for contributing to the downfall of the prior firm. This is the least likely but the riskiest as there is no insurance for this risk so you are entirely on the hook.

Come On… You can’t see bad guys coming

How come the ax murderer’s neighbors always say, “he was such a nice guy” and the business competitors always say “I knew there was something fishy” going on. Some times, it’s just a bad guy doing bad things and nothing more.