By Jennifer Dumont, senior vice president forAtlantic Risk Specialists Inc.

Navigating your way to a top- performing lawyers' professionalliability (LPL) policy can seem like yesterday's news when comparedwith the ever-changing regulations and impact of social media andcyber liability. However, providing protection for a firm'sreputation, defense and indemnification through proper coverage arethe main objectives when insuring law firms. Addressing theadditional exposures of social media, cyber liability andemployment-related practices for law firms are essential to yourclient's risk management plan. With clients eager to make the jumpto a new carrier to save premium, back-to-basics policy review anddue diligence are in order.

Related: Read the article “Insurers Seeing MoreHigh-Severity Liability Claims Against Lawyers” by ChadHemenway.

1. Areas of Practice: Do they add up? Theapplication must fully reflect and warrant the firm's practice andoperating history. These factors determine eligibility and ratescharged, so double check your facts and figures for your clients toensure they are correct and reflective of their current practices.Numerous area of practice charts are received that do not add up,and if the carrier doesn't have a fully accurate picture of therisk, it can cost time delays or affect the carrier's final rate.For the law firm completing an application, it's a time-consumingprocess, but the application becomes a part of the policy anddetermines the coverage. Take time to guide your client through theapplication process to ensure the best outcome.
2. How does coverage respond for ethics complaints anddisciplinary proceedings where an insured has been alleged ofviolating a disciplinary rule? Disciplinary proceedingsare not claims under a policy and the insured, not the carrier, hasthe obligation to defend and respond to these proceedings. However,many insurance carriers offer an enhancement to their policy thatprovides reimbursement for reasonable expenses incurred by theinsured for the defense of such a proceeding where the violation isnot proven. Typical reimbursement limits range from $10,000 to$25,000 maximum during the policy. Some carriers may include anaggregate for multiple expenses. 
3. Have you reviewed how the definitionof professional services is worded and how it willrespond to law related tasks? Will services as a member ofa formal accreditation board or publication of research papers becovered? Many insurance carriers provide coverage for the servicesin their definitions of professional services and also includerelated areas such as notary public, arbitrator and title insuranceagent. We expect this clause to broaden over time withgame-changing advances in technology, which create additionalservices and exposures to your client's firm. Ensure your clientservices are captured in this definition and likewise review theexclusions of services not covered to see if any of your client'sservices are excluded. If so, carriers may manuscript in coverageunder special circumstances.
4. Are defense costs in or outside the limits and how doesthis impact coverage available? Have you explained how thedefense provision works in the policy? Did you move the client to anew carrier for a cheaper premium,  only to find out theincumbent carrier gave defense cost outside the limits of thepolicy and the new carrier has defense within the limits? You havebasically eroded layers of available limits for your client. Eachdollar spent on defending your client's claim leaves that much lessavailable to pay for a settlement in a claim. Better optionsinclude an additional limit for claim expenses to at least offsetsome of the defense costs and allow more limit for payment ofdamages.
5. “Loss only,” “first-dollar defense,”“per claim,” “aggregated” and “50 percent offset” all representdeductible wording. Have you reviewed how the deductible provisionis worded? In the example of “loss only,” the client doesnot incur out-of-pocket claim expenses to defend the claim. Thisattractive option could win many accounts over when the client ismoved from a deductible provision that includes claims expenses oreven a 50 percent offset provision.  

Related: Read the article “Cyber Liability EmergingAs Top Concern In Lawyers' Professional Liability Market” by BonnieCavanaugh.

Michael J. Honig, CIC, of Honig Conte Porrino Insurance AgencyInc., knows all too well the importance of accurate policy review,especially when clients ask Honig Conte Porrino to remarket in thehopes of saving some premium on renewal. “At times it works outwhere you are able to save the client premium and move them to apolicy that is broader than current,” he said. “Other times we needto advise our client that even though an alternate carrier willsave them premium in the short term, we find a deficiency in thecoverage provisions that will give them less coverage andprotection should a claim occur—for example, when moving coverageto a policy where the deductible has claim expense within the limitand their current policy is first dollar defense. At that point ourclients can value our expertise and how we can advise them inprotecting financial assets should a claim occur.”

See the sidebar “Know your Limits.”

Consider evaluating your law firm for employment relatedpractices (EPL) coverage, which protects the firm from allegedwrongful acts in the workplace such as allegations ofdiscrimination, wrongful termination and sexual harassment ofemployees or third parties. Monitor Liability Managers LLC providesan EPL product customized for law firms that will insure firms withfive or more employees. 

“With the increased use of social media and new technology, lawfirms face a growing list of complex and ever-changing risks. It'sup to agents to make sure firms know about these exposures andoffer them a comprehensive policy that addresses these new risks,”said Lynette Lyngaas, assistant vice president, employmentpractices liability, management liability, for Monitor.

Related: Read the article”LPL Opportunities in aSoft Market” by Brian Savitch.

• $100,000 sublimit for defamation, libel and invasion of privacyagainst a third party resulting from the use of social media;workplace bullying and social media defined; expanded definition ofwrongful act to include workplace bullying
• Third-party liability coverage for claims brought by customersfor discrimination, including costs of defense for Americans withDisabilities Act (ADA) and public accommodation claims and/orharassment
• Definition of insured to include partners
• Coverage for failure to promote partner
• $100,000 costs of defense for claims alleging violation(s) ofthe Fair Labor Standards Act (FLSA)
• $25,000 costs of defense for criminal investigations brought byany government agency for alleged hiring or harboring of illegalaliens
• A suite of risk management services including unlimited callsto a toll-free, confidential human resources helpline, MyHRHelp, arisk management site that provides resources covering all areas ofworkplace law and a subscription to a newsletter highlightingworkplace law news and trends.

It's time to get back to basics for LPL with vigilant review ofinformation presented, exercising good judgment and policy review,and helping your clients understand their policy contracts.