When was the last time you updated your limits of liability?
You should review your firm’s limits of liability annually. If your firm has carried the same liability limits for a number of years, it’s time to review your policy limits. Are your current limits keeping pace with the following trends?
- Inflation. A million dollar policy limit in the year 2000 is now worth the equivalent of $759,001.
- Consuming Policies. Many malpractice policies have eroding policy limits. This means the policy limits are reduced by the cost of defense. According to Department of Insurance statistics, the average defense costs paid on all closed claims in 2015 was over $87,000.
- Changes In The Value Of Cases Your Firm Now Handles. Has the maximum value of your litigation cases increased? Has the value of the estates you are handling increased? Determining the best policy limits for your firm is not an exact science. However, a good place to start is with an evaluation of your clients and the type of cases you handle for them.
The amount of policy limits you select to protect your clients as well as your own assets is an important consideration. The professionals at Kaestner & Berry are always available to assist you with a more informed selection.