by KB Insurance
Planning a Career Change or Retirement
The Covid crisis has had a big impact on our society. Lawyers are “retiring” at record levels. Other lawyers are making a decision to change their lifestyle in other ways. You may be one of these people. Instead of the private practice of law, perhaps you are thinking of working for a business, a charitable organization, or the government?
Since all Lawyer Professional Liability (LPL) policies are on a “Claims Made” format, Extended Reporting Coverage, also known as “TAIL” coverage is an important consideration if you are planning to retire or shift your career path in the near future. Most LPL policies provide the ability of the retiring lawyer to purchase adequate “TAIL” coverage. However, “TAIL” coverage is EXPENSIVE!
For a solo practice, the ability to obtain “TAIL” coverage at no additional premium 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 conditions 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 or you can contact Kaestner & Berry to determine the length of the waiting period your policy requires you to be insured by the same company in order for you to qualify. 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. This restriction is obviously attempting to limit the no cost tail to lawyers that are actually retiring.
There are malpractice policies that make it easier to qualify for NO COST TAIL. For example, many policies do not have an age requirement to qualify. In addition, the granting language for the attorney to qualify for the NO COST TAIL coverage is typically, “retired or otherwise ceased the private practice of law.”
If you are thinking about applying to be a Judge, taking an in house legal position, taking a government position, or otherwise leaving the private practice of law, you will want to plan in order to avoid the need to purchase a costly tail endorsement. The good news is that you may be able to qualify for this important benefit at NO COST! However, it does take planning.
For all firms, but especially for a solo practice, it is important to plan for this benefit.
Kaestner & Berry is always available to assist you with this planning. Contact your agent if you are interested in maximizing your insurance coverage.
by KB Insurance
2021 is now in the rearview mirror. COVID has created challenges for businesses. As the world isolated much of our economy and workforce went virtual. Bad actors, known as “hackers”, saw opportunities in our rapidly expanded remote business environment. An October report by AON identified cyberattacks and data breaches as the No. 1 global threat to businesses.
Cyber threats have increased the risk for law firms as small businesses have become more dependant upon technology. According to an October 2021 report, cyber intrusion attacks have jumped 125% year over year. Ransomware and denial of service attacks are driving first-party coverage losses, with an average down time of 23 days and an average cost of $1.85 million according to the same report.
Ransomware attacks happen when a “hacker” uses “phishing” to trick someone in an organization into clicking on a link or downloading a file that then installs a virus on their computer. The malware then spreads to any connected networks. The hacker then makes a demand (ransom) asking for payment to decrypt the files. Even if the ransom is paid, statistics show that on average 10% of the data is not recoverable.
Protecting your passwords is the first line of defense against a hacker. Privilege abuse was involved in 80% of breaches. Hackers have a myriad of ways of stealing passwords. Once they have a password it’s difficult to detect the bad actors when they’re using legitimate credentials. Once they’re in, installing a keylogger is easy, and the hacker will have every keystroke you create during the workday. Many risk managers are now recommending the use of Multi-factor authentication, or MFA. An MFA is a security mechanism that requires an individual to provide 2 or more credentials to authenticate their identity.
Underwriters are reacting by reducing capacity on first-party coverage. The 2021 fourth quarter renewal cycle has seen drastic rate increases while at the same time reducing first-party coverage limits. This means customers are paying more for less. As the international crisis heats up in Europe, 2022 promises to bring more of the same.
If clients haven’t implemented MFA inside their email, workstations and other critical software systems they should do so immediately. Underwriters are requiring MFA more and more.
In the expanding world of technology, the need for and importance of cyber insurance grows exponentially. For law firms, a cyber incident can lead to a loss of business, reputational damages, regulatory penalties and lawsuits. The cyber insurance market is changing. However, the cost for a dependable cyber insurance policy is not prohibitive. Pricing for most solo attorneys is under $1,000, for the lowest policy limits. Contact Kaestner & Berry for more information on how to protect your business in the event of a cyber attack.
