by KB Insurance
A new year brings many challenges and opportunities for your law firm. Has your firm considered a policy to protect your firm from cyber and digital risks?
The practice of law and its risks have changed drastically over recent years. Modern technology, cloud-based services, and digital transformation has helped businesses of all sizes move faster and make a bigger impact. Unfortunately, the same acceleration is true for the risk’s businesses face.
Digital risks and cyber are accelerating. They are always evolving. They strike faster and with more severity. They even amplify other risks. However, 64% of small businesses are not familiar with cyber insurance and only 17% currently have a policy.
A cyber insurance policy is an important tool to help you minimize and manage the risk to your firm. The peace of mind of a cyber policy to cover these digital risks could be important to you. In addition, in the event of a breach, the expertise of a cyber claim team can be invaluable to your firm.
In broad terms, a cyber policy provides the following coverage to you and those you deal with.
First Party Coverage for Your Firm
• Out-of-pocket expenses and organization incur to recover from a loss, such as:
- Breach Response
- Business Interruption
- Cyber Extortion
- Fraudulent Transfer of Funds
Third Party Coverage to Cover Everyone Outside of Your Law Firm
• Any resulting liability or third-party action as a result of a cyber incident, such as:
- Network & Information Security Liability
- Regulatory Defense & Penalties
- Technology and Media Liability
Although cyber policies are structurally similar to traditional professional lines of insurance, the uniqueness of the cyber policy lies in the immediate expert attention dedicated to the insured towards identifying, preventing, and mitigating a cyber incident.
Like all businesses, your law firm is at risk of a cyber claim. If you are interested in a cyber policy to protect your firm, please contact your agent at Kaestner & Berry.
Gerry Kaestner Mark Berry Nolan Berry Melissa Schreder
by KB Insurance
- Claims Made vs. Occurrence — Lawyer’s malpractice insurance is written as a claims made policy, which is different than an occurrence-based policy. A claims made policy means that when you report a claim it is covered by the current policy that is in effect when the matter is reported to the carrier. For example, if you have a professional error that occurred in 2020, but you did not get notice of the claim until 2023, when you report that claim in 2023 it will be covered under your current policy. As opposed to an occurrence- based policy, where if an error occurred in 2020 it would be covered under the 2020 policy. An occurrence policy is not available for lawyer’s malpractice insurance.
2. What is a retro date and why is it important? – The retro date, sometimes called the retroactive date of inception, or prior acts date, is very important in a lawyer’s malpractice insurance policy. This is the earliest possible date for which an insurance policy will cover an incident or dispute. For example, if the retro date on your policy goes back to 01/01/2020, you will not have coverage for an act that occurs before this date. So, if there was an incident that took place in 2019, even if it was reported after 2020, you would not have coverage for this incident because it occurred before the 01/01/2020 retro date. It is important to keep the same retro date in your policy, so you do not have any gaps in what is covered.
3. Reporting Claims – Because lawyer’s malpractice insurance is written only on a claims made policy, it is extremely important to report all claims or potential incidents as soon as possible. Claims made policies come with stringent reporting requirements that could see an insured lose coverage if they do not comply with these requirements. Typically, insurance companies will give between 30-60 days to report a claim after you have received notice. This includes potential incidents and bar complaints that could reasonably give rise to a claim. For example, if you receive notice of a complaint from a client that might lead to a claim in the future, but you do not report that to your insurance carrier, you may lose coverage for that incident. Additionally, if you have notice of a potential incident but fail to report that on your renewal application, you will lose coverage for that incident after the policy has been renewed. That is why it is extremely important to report all incidents or complaints that may give rise to something more serious in the future.
The operation of your business is important to you. The purchase of a malpractice insurance policy is an important part of the overall operation of your firm.
As outlined in this article, malpractice insurance is much more complicated than you may think. The experts at Kaestner & Berry will assist you in making sure the coverage that your firm needs is there when you need it.
by KB Insurance
Kaestner & Berry works with many different underwriters to obtain the best coverage and pricing for you! Underwriters have different guidelines, however, in the big picture they charge based on the following criteria at your firm:
- The number of attorneys that will be insured at the firm. (A few underwriters also charge for paralegals).
- The hours that the attorneys work for the firm. Most underwriters provide some type of discount for “part time” attorneys. This discount will differ from underwriter to underwriter.
- Area of Practice. The underwriters charge a different rate based on the type of practice that you have. For example, criminal law is statistically a very low risk area of practice. As a result, the more time you identify as practicing in this area of law, the lower your premium will be for. Some other areas of practice, certain underwriters will not even provide a quote. A typical example is that many underwriters will not write a plaintiff firm that does medical malpractice work.
- Claims and disciplinary issues. The underwriters differ greatly on how they handle claims and disciplinary issues. We have worked on many difficult accounts to obtain the best rate for our clients in these situations.
- All underwriters have a different rate based on the state out of which your law firm practices. Some underwriters have different rates for certain “high risk” cities within the state. So if a friend in a different county tells you of a carrier offering a great rate, be alert to the fact that you may not receive a similar great rate.
- Office procedures are important. Procedures such as a dual calendar system, a conflict check system and not suing clients for fees, help keep your premium low.
As an independent agency, we are working for your law firm. Our goal is to match your firm to the carrier that will best suit your needs.
by KB Insurance
Practice Tip – Confidentiality
It is human nature to want to talk about work. However, client confidentiality is an ethical obligation, not only for the attorney, but also for staff, outsourced workers, repair people and others who work with a law firm. For this reason, it is a good practice to frequently remind staff of the obligation of confidentiality.
How to Save in These Inflationary Times
A common misconception held myth about an insurance agency is that the use of an independent agent increases your insurance cost. This is a myth that is rarely true. Whether you contact an insurance company directly, as a “direct write”, or use an agent, the premium charged by the insurance company is the same. Of course, if all you do is contact that one insurance company, that company will provide you with only one price, its price. The price may be high or low. You as a consumer have no way of knowing whether it is competitive. In addition, the coverage may be broad or narrow. You as a consumer can spend a lot of time to research the coverage on your own or you can be assisted by an agency that is experienced and focused on offering you quality options.
Kaestner & Berry is an independent agency which has established relationships with a large number of different underwriters. We only assist lawyers in finding insurance products to protect their law firm/clients. We can save you money and time through our knowledge of the market place and our ability to obtain competitive quotes from different companies.
Kaestner & Berry has saved law firms in Missouri, Kansas, Illinois, Tennessee, and Texas millions of dollars. Be confident you are getting the best available coverage, at the best available price, for your law firm’s situation
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.
