Can you spare 10 minutes?

Recently I was in San Francisco meeting with insurance underwriters gathering at the Professional Liability Underwriting Society meeting. While in the lobby of the San Francisco Hilton, it struck me as an excellent condition that summarizes the changing business environment.

Approximately 1500 registered attendees were present to discuss changes and challenges to the professional liability insurance market. Attendees were from around the globe but most notably east coast of the US and London.

Sitting in the lobby as an unregistered attendee to this event, waiting for my first 10 minute meeting, it struck about the time, effort and expense of such an event. Future to that revelation, I began to question the future of such events.

Business and more specifically the insurance business is at a cross road point where technology is headed toward more than a sophisticated calculator/typewriter that can play games toward an exponential explosion of “community” doing business.

The pressure to do more with fewer people has never been greater! The computer allows us to access information and markets never before available to the ship-owner on Main Street USA.

By networking with others, the grasp and reach is only as limited as is our imagination. Meetings with cameras and services like “WebEx” and “Goto Meetings” offer opportunities to capture quick and very effective information exchanges.

While the technology gives us the ability, are we using it effectively? I am in the middle of about four dozen mini meetings of from 2 to 6 people. The conversation is the reason but these mini meetings are the essence of business being conducted.

When I entered the insurance business forty years ago, Underwriters at Lloyds London created markets for professional liability entirely from “mini-meetings” between a real person and a Lloyd’s broker. The risk bearer literally signed their name and personal assets to the line slip describing the risk exposure to be insured. By writing their name blow the line slip, the became underwriters of the risk.

10 minute “mini-meetings” initially committed hundreds, then thousands, then millions, now billions to various risks. Just from a mini-meeting.

Where are mini-meetings headed? The on-line world of mini-meetings is found on the internet and creates the opportunities to meet and communicate faster and clearer.

Good luck on your next mini-meeting. May it be on the net with your next best customer!

What Else Is Covered?

Earlier today I got a call from one of our clients asking about lawyers’ professional liability insurance and whether or not it was solely intended to protect from actions arising from a professional act or failure to act that harms a client of the firm. After a few moments of understanding the direction of the question, my response was that it also included other scenarios beyond the client attorney relationship.

Included in the typical lawyers professional liability insurance policy is coverage for the acts of malpractice that are created from conditions involving the poor actions or total failure to act by the insured attorney. The benchmark standard is that of what a prudent attorney should have done or not done given the same or similar circumstances. Though our client had a good understanding of this concept, his concern was not answered until I volunteered that additional coverage extensions also exist.

The lawyers’ professional liability insurance policy also covers acts of “personal injury” committed by the insured attorney in their professional capacity. This was getting closer to the heart of my clients concern. A distinction is necessary when using the term personal injury. From a lawyer’s point of view, all acts of negligence involve some form of personal injury including bodily injury and/or property damage.

From an insurance point of view, there is a distinction between bodily injury meaning direct physical harm to one’s body or physical sphere and personal injury meaning defamation, slander and emotional harm. The lawyers professional liability insurance policy insures both professional acts and personal injury of the attorney and excludes bodily injury liability. Bodily injury liability would be insured through a business office liability policy for general slips and falls, an automobile liability policy for auto related bodily injury and a workers compensation policy for bodily injuries to employees of the firm.

On those occasions where the policies have been read and understood, there may be a fuzzy grey area around the business general liability and professional liability coverage for defamation, slander and emotional harm. Upon careful examination, personal injuries are much broader under the professional liability policy than the general business liability policy forms, many of which written for an attorneys office will contain an absolute professional liability exclusion that often extends to a total exclusion of personal injuries arising from an attorney’s office liability.

I cannot emphasize enough, it is your responsibility to read and understand what is and what is not insured through your policies. After the lawsuit, is not the time to ask questions about what else is covered!

Law Student Cafe Launches

Many thanks to Hugh Hewitt and his new website devoted to law students and new attorneys entering the field of play on the legal gridiron! Law Student Café at http://lawstudentcafe.com/ is a new and innovative community designed for law students and recent law school graduates looking for careers and work in their field of passion.

I am a listener to Hugh Hewitt on KRLA870 here in Los Angeles and heard him make several announcements about Law Student Café. He graciously linked our website to Law Student Café and you can access it from the Applegate Insurance Services web-ad. His interest in and support of his students at Chapman School of Law shines through in his daily talk-radio show and his writings at Town Hall are followed by the rest of us non-lawyers for interesting perspectives about life, faith, politics and current affairs.

Hugh, thank you again.

Malpractice Traps

On Friday, I was reviewing at long last some of the insurance industry trade publications that I follow. One of these publications is the American Agent & Broker and I was reading the September 2008 edition. AA&B was interviewing a Massachusetts insurance brokerage about their specialization in Lawyers professional liability insurance. Part of the interview included a reference to the American Bar Association “Desk Guide Legal Malpractice” and further into the Guide the Top Ten Malpractice Traps.

Curiously, I went to read the top ten traps which in the American Agent & Broker were summarized. Briefly the traps are:

1. Missing Deadlines
2. Stress and Substance Abuse
3. Poor client Relations
4. Ineffective Client Screening
5. Inadequate Research and Investigation
6. Conflicts of Interest and Conflicts of Matter
7. Inappropriate Involvement in Client Interests
8. Lack of Adequate Documentation of Work
9. Zealous Efforts to Collect a Fee
10. Unwillingness to Believe you May be Sued

The ABA Desk Guide covers many issues and the above 10 items are discussed on pages 52 to 62 and I recommend that you take a couple of moments to review these 11 pages in detail and see how your firm can incorporate this information into your risk management program. Insurance is only effective after the claim and we can help your with your insurance program. Risk management involves claims avoidance through proactive steps to prevent situations and misunderstandings that may lead to a claim. The difference between a mistake and a claim is a loss! Correct a mistake before the claim with information.

Comparative Shopping of Professional Liability Insurance

I recently went on the Progressive Insurance Company website to obtain a comparative quotation for my personal automobile insurance. I guess that Flo's catchy TV commercials have finally gotten me to check about how much I pay and also am I getting a fair value. Insurance quality and coverage are also important considerations but the premiums need to be affordable, so check I did.



The process is somewhat easy for an insurance professional. I can understand that this may not be what the general consuming public wants to spend time and energy to do during more productive endeavors.



Well I got my comparative quotations and feel that my current insurance situation is good! But it got me thinking about the lawyers' professional liability insurance that I sell. Why can't an attorney access similar information in a non-confronting on-line manner wherever and whenever they want?



Stay tuned. Change is coming and it will reside at http://www.applegatepro.com/. Thanks for reading.

What is a claims made liability insurance policy? Why should you care!

Not all claims made and reported professional liability insurance polices are the same. The initial objective is to allow an insurance underwriter to close out a policy when conditions dictate that a claim may occur years long after a policy may expire. Examples of this condition are products liability claims, construction latent defect claims and professional liability errors & omissions/malpractice. A claims made and reported liability policy requires that the claim happens and is reported in the policy period and that the claim occurred after the retroactive date listed in the declarations(this is sometimes shown as a prior acts exclusion date).

Some policy contracts may be silent about prior acts and in effect provide full prior acts coverage for the insured. This type of policy may approach coverage similar to an occurrence policy form. Other claims made and reported policies may address issues of predecessor firms with an absolute exclusion or a detailed explanation of the conditions covering or excluding any predecessor firms. And still other claims made and reported policy forms may contain extensive explanations of extended periods of reporting while other policies simply state that you must request a tail within 30 days of a policy expiration. There are inconsistent treatments of many policy issues, terms, conditions and exclusions in today’s professional liability insurance marketplace.

In our discussions about claims made professional liability insurance with clients and prospects, the one clear issue is that may informed buyers have full spectrum of understanding the policy from not at all to a clear conceptual understanding of how the insurance policy will respond. Clearly asking as many questions up front adds to the understanding. Knowing that there are no uniform policy forms is a first step.

This is my first post to Not Far From The Tree blog. My interest in blogging is to support my clients and prospects with their insurance needs in the area of professional liability. Often my communications have specifically addressed an individual set of facts that may have a more universal appeal. In and effort to reach a broader audience, I have written newsletters and targeted marketing materials distributed via snail-mail but they fall short in addressing questions that clients and prospects have while generating additional trash for landfills! I am experimenting with this medium in an effort to reach a broader audience with timely information. Thank you in advance for your indulgences.

In California, you are what you drive! The Mercedes Benz or BMW often reflects an alter ego of having reached a level of success. An attorney and the law practice they have often reflects a level of personal accomplishment and that success. Unfortunately a very high percentage of California attorneys in private practice have neglected to insure their professional liability. Or if they have purchased an insurance policy, it has minimum limits of coverage and only slightly better than no coverage at all.

Why don’t many firms insure with the best insurance policies and with appropriate limits of liability? Are minimum limits good for your car? Then why would minimum limits be appropriate for a lawyers’ professional liability policy? Many attorneys feel that they will not be sued and that is simply not the situation. Professional liability underwriters suggest that an attorney will have a reportable incident leading to a claim every 7 to 10 years or for a larger firm, an incident for every 7 to 10 attorneys.

The California State Bar Association has been “working on” insurance disclosures for more than 18 months and has not reached an enforceable set of guidelines with any disciplinary consequences. Opposition pressure against consumer protections has not driven the process. Statutory requirements are no substitute for conscience risk management and responsible precaution including adequate reputable insurance coverage.