Attorney Sicari discovered that his Lawyers Professional Liability Insurance Policy (LPL) had lapsed. Unfortunately for him his discover was in 2013 when the coverage had lapsed in 2011. As luck would have it in July of 2013 he also discovered that he had a malpractice claim against him. Mr. Sicari sued The Hartford (Sicari v The Hartford) claiming that he was never notified of the coverage being non-renewed by The Hartford in 2011.
A little background into The Hartford’s combined Business Owners (BOP) and LPL policy. The Hartford started offering a combined BOP and LPL policy in 2002 or 2003. This was a great deal for many attorneys at the time. The coverage was from a highly rated insurance carrier and very inexpensive. Also unlike most LPL policies, the application consisted of only very few questions with little underwriting. All Hartford Agents could sell this product even if they had little or no experience with LPL. Better yet Hartford Agents had binding authority without sending in the application to the carrier for underwriting review. A few years into the program Hartford realized that they were on the hook for risks that they had no idea what the exposure was and did not fit the intended guidelines.
Most general lines insurance agents rarely deal with “claims made” coverage. The BOP/LPL policy that was issued had a BOP which was “occurrence” based and an LPL policy that was “claims made” coverage. Also most general lines agency do not get involved very much with the renewals of BOPs. This is fairly normally as unless the risk changes nothing much changes from year to year. As LPL policy is a different animal, it is re-underwritten every year. So now you have thousands of agents that know little to nothing about “claims made” coverage writing LPL policies.
Fast forward to 2010, The Hartford had determined that they needed to end the LPL program. To that end they notified all of the agents that had written this LPL coverage that the LPL program was ending. Hartford also sent out notices at the appropriate times to each individual insured. We cannot tell from the reading of the decision whether the insurance agent, specialized in LPL or was a generalist.
L Squared talked to many former Hartford Insured Lawyers that were coming to us after the fact. Many times the prior acts dates on the LPL policies were incorrect and/or better yet as with the case of Attorney Sicari, coverage had lapsed. Usually the trigger to find out that coverage had lapsed was a lawyer malpractice claim. While L Squared was able to help many former Hartford Insured attorneys with repairing prior acts coverage, there is little that can be done once a claim is made against the insured.
As with any insurance policy it is important to read the initial policy and also read any notices that you receive from the insurance carrier. Carriers are required to provide notice to insured whenever they are modifying or eliminating coverage. More importantly, if the premium changes dramatically from $2728 to $649 the insured needs to ask questions. It is extremely rare that the premium drops without a corresponding drop in coverages.
Finally, LPL coverage is different. Many agents specialize in only writing this coverage. If you are going to use your normal generalist agent, find out how much experience the agent has with writing LPL policies. In practice of law a lawyer can practice in just about any area of law, but usually limits practice to the areas that the attorney is experienced in. Many lawyer malpractice claims happen when lawyers step out of their area of expertise. Insurance agents are not much different. A licensed insurance agent can sell just about any property and casualty product, but just because the agent is licensed does not make an agent competent in that type of insurance.