Archive for January, 2012

He Looked Before He Leaped

January 26, 2012

A partner with an established firm located in central New Jersey asked me smart question. Questions that come before the firm does something and include the words, “What are the ramifications of…” are always smart questions.

In this case, the attorneys that are with the firm are all admitted only in New Jersey. A prospective new hire is admitted in both New Jersey and New York. What are the ramifications of having an associate that is also licensed in New York?

Traditionally, just being licensed in another state doesn’t have any impact on professional liability insurance. While I have seen policies with specific state exclusions, these are rare in my part of the country. Some carriers ask what precautions are taken to ensure compliance with state specific issues like statutes of limitations if the firm accepts cases in states where the firm does not have offices. It is not a big deal, they just want to make sure the firm is taking prudent steps to avoid stepping into a problem.

New York State has some unusual workers compensation regulations that may come into play for out of state firms, depending on the amount of time firm personnel spend in New York. These are easily addressed, just let your agent know before you send people to New York.
Of course, each carrier’s policy contains different language and endorsements. For specifics on how your treats other states call your agent.
Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at http://www.LawFirmInsuranceExpert.com. For a consultation call 732-223-6611 ext. 108.

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We Plan to Hire an Independent Contractor. Does Our Policy Cover Her?

January 10, 2012

Kelan J. Vorbach, CIC

The the question that is the title of this post may not be the right question. Does the firm want to be covered for the independent contractor’s wrongful acts or does the firm want to cover the independent contractor?  

Normally, the firm is covered for professional claims regardless of who performs the services.  Current and former owners, partners, employed lawyers and of counsel attorneys are similarly covered for work done on behalf of the firm.  The carrier will defend both the firm and the individuals.

Independent contractors are generally treated less favorably. Though the carrier will respond to claims against the firm based on the services the independent contractor performed on behalf of the firm, they may not respond to claims made against the independent contractor for those same services. Further the carrier may try to shift all responsibility to the independent contractor if both the firm and the independent contractor are sued.    

Of course, each carrier’s policy contains different language and endorsements to change the policy language may be available. For specifics on how your treats independent contractors call your agent.

Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at www.LawFirmInsuranceExpert.com. For a consultation call 732-223-6611 ext. 108.

Our Firm Has Professional Liability Insurance, What Else Do We Need?

January 4, 2012

Kelan J. Vorbach, CIC

A variety of policies are needed to address the risks of a law firm. The most basic coverage portfolio includes:

  • Professional Liability (Legal Malpractice)
  • Business Owners Policy or Commercial Package Policy
  • Workers Compensation

This starter set, properly configured to the individual firm, addresses a wide variety of potential claims. I use the phrase “properly configured to the individual firm” because I often review policies that aren’t. Since professional liability is generally the most expensive of the three it generally gets the most attention while the other policies are automatically renewed and generally ignored. Most firms also face significant risks that the basic portfolio doesn’t cover or fails to address adequately. Additional policies most firms should consider include:

  • Privacy Liability (A/K/A Data Breach or Cyber Liability)
  • Employment Practices Liability
  • Directors & Officers Liability
  • Employee Dishonesty
  • Excess Liability
  • Buy Sell Life & Disability

Why don’t firms address these exposures? The reason may be money or lack of awareness. A firm’s insurance advisor may be reluctant to make recommendations that may not be well received because they result in higher premiums. If the firm is buying policies piecemeal from different agents, the firm may not have any one agent who feels responsible to provide advice. While most firms face similar risks, generally the more successful firms do a better job at insuring them with broader coverage.

In addition to the policies listed above, a firm may have specific coverage needs. For example if they provide company cars to partners they may need a business auto policy. They may need an ERISA bond or they may wish to offer group benefits. If you only have the starter set or if it has been years since you reviewed each component of your insurance portfolio, you have reason to be concerned. Make an appointment with your agent to review your policies or give me a call at 732-223-6611 ext. 108.

Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at www.LawFirmInsuranceExpert.com.