Missouri claim statistics from the Department of Insurance highlight an increase in risks to practicing lawyers.
According to Department of Insurance statistics, the average payout on a successful claim increased from $145,046 to $204,581. In addition, the average “loss adjustment expense” also increased to an average of $61,252. (The “loss adjustment expense” is the costs to an insurance company to defend an attorney in a claim.)
Certain Area of Practices (AOP) are more at risk for a claim. As a result, it will come as no surprise that insurance companies charge higher rates for these AOP’s. Plaintiff Litigation work has, without exception, been the highest risk AOP to result in a claim. A few years ago, with the economic downturn known as the “Great Recession”, claims in the Real Estate AOP rose dramatically. We are also hearing from underwriters that claim severity is a particular issue for attorneys who practice in the Estate, Trust area of law.
If you practice in these areas of law, you are paying a higher rate for your Lawyer’s Malpractice Insurance. You also may be experiencing a slight increase in your premium.
At Kaestner & Berry we work with over a dozen of malpractice carriers. This allows us to provide you with the best available pricing for your malpractice insurance needs.
Kaestner & Berry is again nominated as one of the top 3 Best Malpractice Insurance Providers by Missouri Lawyers Weekly magazine. We would appreciate your vote in helping us reach #1. You can place your vote online, no later than May 9th, by clicking the following link. https://molawyersmedia.com/reader-rankings-2019/ . Then select Firm Management Services and scroll down until you see Malpractice Insurance Provider and just simply click on the “Vote” button next to Kaestner & Berry. We appreciate your vote and look forward to continuing to provide great service to you and your firm.
Cyber Liability Coverage
Is your business at risk for cyber threats? Law firms are uniquely exposed to cyber risks. For law firms, a cyber incident can lead to a loss of business, reputational damages, regulatory penalties and client lawsuits.
Kaestner & Berry offers a stand-alone cyber risk policy from SafeLaw. The SafeLaw policy provides the following protection:
Confidentiality, Privacy, Media Liability – Third party legal liability protection for:
- Failure to prevent disclosure of personally identifiable information;
- Failure to prevent transmission of hacker attacks, viruses, or denial of service attacks;
- Copyright infringement, trademark infringement, and defamation arising from the firm’s electronic publishing.
Data Breach Response Expense – First-party coverage for the firm’s expenses following a data breach including access to a panel of data breach responses experts such as I.T. forensics, legal advisers, public relations, victim notification, call center support, credit monitoring, and identity theft remediation.
Electronic Data Restoration Expense – First-party coverage for the firm’s expenses to recreate or restore data, software, or firmware that is corrupted or damaged by a hacker attack, virus, denial of service attack, or administrative errors.
Business Income Loss – First-party coverage for the firm’s lost income and extra expense incurred due to computer system disruption caused by a hacker attach, virus, denial of service attack, or administrative errors.
Cyber Extortion and Ransomware – First-party coverage for the firm’s expenses to mitigate or terminate cyber extortion or ransomware threats.
Cyber Crime (Fraud) – First and third-party coverage for fraudulent funds transfers from the firm’s bank or securities accounts for a client’s bank or securities accounts for which the firm is an authorized custodian due to social engineering or fraudulent use of the firm’s computer system.
Most legal malpractice policies now provide some cyber risk protection. However, most of these malpractice policies offers only limited cyber protection. In order to avoid surprises consider a separate SafeLaw cyber policy. For a quote, please contact Kaestner & Berry for a no obligation quote.
Kaestner & Berry Now Accepts Credit Cards
Kaestner & Berry now offers the ability to pay your malpractice insurance premium by Visa, Mastercard, Discover or American Express. This service is provided thru a Third Party handler – “Simply Easier Payments”. There is a fee charged by “Simply Easier Payments”. Kaestner & Berry does not receive any fee for this service. We offer the service only as a convenience to you – our clients.
In the future if you want to pay your premium by credit card, all you will need to do is let us know and we will forward you the “Simply Easier Payments” link.
Mid Term Additions/Deletions:
Each malpractice insurance company has different requirements for the Mid Term Addition of attorneys and/or the Mid Term deletion of attorneys. The general rule is that there is no additional charge when adding an attorney to your firm with date of hire coverage during the mid term of the policy. By the same token there is no refund when an attorney is removed mid term from the policy. The underwriters consider it a “wash”. However, some companies make an exception if the change is made within 30 days after the effective date of the policy. In addition, at least one company charges for each mid term addition and refunds for all departures.
You should contact Kaestner & Berry immediately when there is a mid term change at your firm and we will make sure you obtain the most value for your coverage.
All Lawyer Professional Liability (LPL) policies are on a claims made basis. A claims made format confuses many people.
There are 2 important and frequently confused concepts, to prevent gaps in coverage.
Retroactive Date – A “retroactive date” is a date cited in a claims-made policy or endorsement. When such a date is applicable, the policy or endorsement will not cover injuries or damage if the specified trigger of coverage (the error) occurred before the specified date. Coverage for those injuries or damage is excluded even if the claim is first made during the policy period. In short, a claims-made LPL policy does not cover claims when the act, error, or omission out of which the claim arises occurred before any applicable retroactive date.The retro date for a given coverage is often set to coincide with the effective date of the first policy providing that claims-made coverage, and it typically remains the same as the policy is replaced or renewed with subsequent claims-made policies. However, you may be contacted by an unethical salesperson who offers a lower premium by changing this date without telling you of this change. This would create an unwanted gap in coverage. You want to avoid surprises like this.
Extended Reporting Period (ERP) (Tail Coverage) – Claims made forms and endorsements often specify an ERP that is provided only if the named insured requests it in writing within 30 to 60 days (depending on the carrier) after the end of the policy period and pays the applicable additional premium when due. The ERP is a period after the expiration of coverage during which a claim may be made and still be covered by the policy. Note that while the ERP affords additional time for claims to be made, those claims must result from incidents that have occurred on or after the retroactive date and before the start date of the ERP (Tail) coverage.
As mentioned, the ERP is provided only if the named insured requests it in writing within 30 to 60 days after the end of the policy period and pays the applicable additional premium when due. A 60 day provision is fairly standard in claims-made policies. However, the policy should be consulted because there are some policies that require action in 30 days. It is a one-time option which Kaestner & Berry will assist you with.
Most LPL policies offer Unlimited ERP (tail) coverage upon retirement at no cost. There typically are several conditions to obtain this benefit at no cost. Kaestner & Berry will assist you in your planning to obtain this benefit.