Are you prepared for the next virus? I am not talking
about Coronavirus. I am talking about your business systems and cyber security.
Recent events have demonstrated how quickly things can
change. Will your business be prepared if the next pandemic is not a medical
virus but a computer virus?
Here is what to look for in a cyber policy:
- Liability coverage. Coverage for privacy and security regulatory proceedings.
- Breach response coverage. Coverage for notification costs to comply with state law. Credit monitoring costs. Data restoration. Computer and legal experts. Public relations assistance.
- Cyber crime coverage. Coverage for computer fraud. Funds transfer fraud. Social engineering fraud.
- Business loss coverage. This may be the most important coverage and is a coverage that many cyber policies do not include! This is coverage for system failures and business interruption.
At Kaestner & Berry the cyber underwriters that we
work with provide comprehensive coverage that includes all of the coverages listed
above. For a solo practitioner the cost can be as little as $450 for an annual
policy. The pricing can vary based on your practice, revenues and selected
limits of liability.
If you are interested in a separate cyber policy to protect your business, contact your representative at Kaestner & Berry.
Planning for Retirement & Your Malpractice Policy
ERC “Tail” Coverage At No Cost To You
All Lawyer Professional Liability (LPL) policies are on a “Claims Made” format. Extended Reporting Coverage Endorsement, (ERC) also known as “TAIL” coverage is an important consideration if you are planning to retire in the near future. The endorsement will allow the policyholder to report a claim after the expiration of the policy.
Most LPL policies provide the ability of the retiring lawyer to purchase adequate “TAIL” coverage. Many LPL policies even offer Unlimited “TAIL” coverage at no additional premium!
For a solo practice, the ability to obtain “Free” “TAIL” coverage is an important consideration. However, in order to maximize this benefit, some planning is required.
In order to qualify for the “TAIL” coverage at no cost, there are certain restrictions built into the policy. A typical restriction is that the Company will require the insured lawyer to have been insured by the same Company for (3) consecutive years before the attorney qualifies for No Cost Tail. The length of time varies, so it is important that you review your policy. In addition, there may be other restrictions in your policy on your ability to qualify for this free benefit. For example, some policies require the attorney to be at least 55 years of age to qualify for No Cost Unlimited Tail Coverage. There is also a deadline after the expiration of the policy to request the No Cost Tail coverage.
The policy also typically requires that the attorney has “retired or otherwise ceased the private practice of law”. Some policies include strong language which voids the No Cost “TAIL” coverage if the attorney practices law again after obtaining the TAIL coverage endorsement.
For all law firms, but especially for a solo practice, it is important to plan for this benefit. You can save thousands of dollars!
Kaestner & Berry is always available to assist you with this planning. Always let us know if you are contemplating retirement or “ceasing the private practice of law”.
More than half of U.S. businesses report that they experienced a cyber attack in the past 12 months, compared to 38% the year before, according to the Hiscox Cyber Readiness Report 2019. The report shows an increasingly hostile operating environment for businesses where 27% of U.S. companies experienced four or more attacks in the last year.
The mean cost of U.S. cyber incidents was $119,000, according to Hiscox’s annual report, which surveyed nearly 5,400 professionals who are responsible for their company’s cyber security.
Businesses are facing more than just data breach claims. In 2018, over 20% of complaints involved fraudulent instruction, social engineering and extortion, according to the FBI’s Internet Crime Complaint Center, while only 1% involved corporate data breach complaints.
Of the total losses reported, fraudulent instruction, social engineering and extortion accounted for 18.5% – $1.4 billion – of losses, while corporate data breaches made up only 1.6% – $118 million.
Any business using electronic devices, a computer or the internet is susceptible to ransomware attacks and fraudulent instruction threats. Businesses with an online presence through a website or social media can also be subject to multimedia wrongful acts claims. Kaestner & Berry offers a separate Cyber-Privacy Breach policy with broad coverage for your office security!
You Need A Dependable Carrier!
The financial strength rating of the carrier is a very important consideration in the selection of your malpractice carrier. For financial strength of an insurance company A.M. Best Company is considered by most to be the “gold standard. A.M. Best Company is a global credit rating agency serving the insurance industry. It is a source for an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. Moody’s and Standard & Poor’s are also rating agencies equally respected in the market, although they issue ratings for a broader range of industries and do not focus solely on the insurance industry.
If your insurance carrier is not financially secure, it is the policy holder who is at risk of taking a financial blow on account of a claim that is not covered due to a carrier not being able to meet its obligations.
Kaestner & Berry reviews the A.M. Best ratings of all of the Lawyer Professional Liability insurers in the region. Call us if you have any questions about the financial strength of your malpractice insurance provider.
Substance Abuse and Other Addictions
in the Legal Profession
(condensed from the MO Bar publication)
Substance Abuse Is a Big Problem
According to the National Council on Alcohol and Drug Dependence (or NCADD), alcohol is the most often used addictive substance. One in 12 adults faces an alcohol concern; several million more engage in risky drinking. The Substance Abuse and Mental Health Services Administration (SAMHSA) reports an 8.8% rate of substance use disorders in the US. Alcoholism ranks as the 3rd leading lifestyle related cause of death in the United States.
The NCADD estimated that 20 million Americans used an illegal substance in the past month. Illicit drugs include substances like marijuana, hashish, methamphetamine, cocaine, heroin and so forth. The NCADD also estimated that of the total overall costs of substance abuse in the US exceed $600 billion per year.
In the legal profession, attorneys have above average rates of substance concerns, depression and suicide. Alcohol continues to be the most frequent problem chemical for legal professionals. Approximately 40-70% of attorney discipline proceedings and malpractice allegations are linked to alcohol abuse or mental illness.
Early professional warning signals of substance abuse for lawyers include unreturned phone calls, being late for depositions, cancelled appointments, numerous sick days or client neglect. Late stage concerns include failure to come to the office or appear for hearings, appearing intoxicated or under the influence in court, unprofessional appearance or hygiene, inappropriate mood and abandonment of one’s practice.
Recovery reduces claim and disciplinary complaints.
An Oregon study confirmed lawyers in recovery have low claim rates.
5 years before sobriety 5 years after sobriety
Malpractice claims – 83 Malpractice claims – 21
Disciplinary complaints – 76 Disciplinary complaints – 20
During that time frame, average complaint rate for attorneys in the state was 9%. The attorneys had an annual complaint rate of 28% before sobriety and 7% after. The malpractice claim rate for attorneys in the state was 13.5%. The rate of malpractice claims was 30% before sobriety, and 8% in recovery.
Lawyer Assistance Programs Offer Help
Almost every state in the US has a Lawyer Assistance Program. Lawyer Assistance Programs are broad brush programs to assist attorneys with a variety of matters such as substance concerns, mental health concerns, stress management, coping with grief, adapting to life changes and other personal concerns. Check out your state’s program for specifics. Substance concerns are one of the most common concerns lawyers assistance programs help attorneys address. Do not delay if you or someone in your office is in need of assistance. Seek help.