As law firms evolve so should their insurance coverage. Not every malpractice insurance policy is a good fit for every firm. The proper firm coverage needed 3 years ago, may not be the coverage that the firm needs today. Neglecting a periodic review of your firm’s insurance needs can be costly. Not only in paying too much for coverage but in finding that your firm is not covered properly.
A good example of this is Cyber Insurance. Not long ago Cyber was viewed as not needed. Now given the frequency of cyber attacks and ransomware demands Cyber Insurance is an essential insurance coverage. Most Attorney Malpractice policies provide little or no Cyber coverage. Addressing Cyber exposures is essential.
When that annual malpractice insurance application arrives, this is a good time to assess your insurance needs. Malpractice Insurance exposures can change dramatically. There are many reasons for this. If a law firm accepts a new client, that client may have needs in practice areas that the firm did not do work for in the past. The client could be a high-profile client or a client that requires higher liability limits.
Ten changes in the firm’s makeup that could impact insurance coverage:
1. The number of attorneys changes
2. Ownership of the firm is changing
3. Attorneys that were partners are now going “of Counsel”
4. Law firm has started to contract out work to outside attorneys
5. Areas of Practice change because of clients or potential for new revenue
6. Staff makeup changes because of the engagement types that the firm is accepting
7. Attorneys are participating in other businesses, become board members, or officers in companies that are clients
8. Your law practice now has clients with businesses or interests in many different states
9. Your law practice is now in many states
10. Moving your law practice
If any of the above issues happen, it is a good time to discuss with your malpractice insurance agent your insurance needs and the review your policy to ensure that these issues are properly addressed.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080