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Lawyers Professional Errors and Omissions (E&O)

While many legal professionals secure their insurance through professional societies and associations,there are specialized circumstances when they are ineligible for coverage. Brokers and agents must work to ensure that their clients who are lawyers or law firms have the coverage that they need.

Lawyers Professional Liability (E&O) Coverage through Burns & Wilcox is tailor-made for legal professionals to mitigate the risks resulting from professional liability claims when clients say they haven’t performed to expectation. The coverage abates the financial damage following claims of negligence, poor performance, errors in judgment and omissions.

Partner with Burns & Wilcox to provide your clients intelligent solutions and protection against the risks associated with providing professional legal services.

Coverage Details and Features

Features & Highlights:

  • $2,500 minimum premium
  • Excess coverage available
  • Claims-made and duty to defend policy
  • Coverage extends to the firm and its professional staff
  • Broad definition of claim
  • Broad innocent insured provision
  • Coverage extends to attorneys joining the firm during the policy period
  • Extended reporting period options

Coverage Available For:

  • Law firms with one of more of the following circumstances:
    • Claim frequency and/or severity issues
    • Non-renewed by the standard market
    • Difficult areas of practice (e.g., securities, class action, intellectual property,entertainment)
    • Disciplinary/reprimand issues
    • Staffing or procedural issues
    • Unusual circumstances or business arrangements

Target Classes

  • Real Estate
  • Plaintif Litigation
  • Corporate Law
  • Collections
  • Family Law
  • Arbitrators and mediators
  • Trusts and Wills
  • Members of a bar association
  • Notary public
  • Trustees and guardians
  • Administrators
  • Conservators
  • Receivers
  • Executors
  • Members of formal boards, ethics review committees, or peer boards

Claims Examples

Conflict of Interest
The former wife of a financial services executive sued a major law firm and two of its attorneys for failing to disclose their conflicts of interest. The firm, while representing her during her divorce action, concurrently represented her husband’s employer in a $400 million deal, a business relationship she claims led to a conflict of interest and mishandling of her divorce. She is seeking $8.3 million in compensatory damages and $25 million in punitive damages.
Procrastination
Even without a specific time limitation, a lawyer’s delay in dealing with a client’s matter could cause a loss. When the wife’s mother abruptly passed away, leaving a lot of debt but also a house that was rented out, the couple engaged an attorney in a solo practice to negotiate and complete the sale of the property to the tenant, who had expressed an interest in buying it. The attorney’s attention was quickly drawn to other, more lucrative business and the property sale got pushed to the back burner. Eventually, the tenant left the house without buying it and owing several months’ rent. The couple, unable to keep up mortgage payments, sold the house for considerably less than its value and sued their attorney. They also registered a complaint with the state bar association.
Negligence
A lawyer, engaged by a reality television star and her husband to help them with a bankruptcy filing, was sued by the couple for legal malpractice and negligence after they lost their home and were sentenced to jail for hiding assets from creditors, submitting phony loan applications and tax evasion. The couple’s $5 million lawsuit claims the attorney improperly handled the bankruptcy filing, prepared flawed amendments and failed to properly prepare them for an appearance before the federal bankruptcy trustee and creditors.
Malicious Prosecution
When the law firm brought a complex lawsuit against a business and failed to win, its client turned around and sued it for malicious prosecution. The former clients accused the firm of putting its own interests in amassing fees ahead of those of its client, and failing to properly explain that the case was unlikely to be successful. While the law firm ultimately prevailed, its defense costs exceeded $1 million.

Questions to Ask

What areas of practice does the law firm offer?
Certain areas of legal practice may give rise to malpractice claims that are especially difficult and expensive to defend against. For example, a law firm that handles patent law might engage in complex and protracted litigation for its client to determine who actually designed a piece of software. If this firm loses the case, its own client may come after them with allegations as complicated to defend as the original case. Attorneys who practice in excessively complicated areas like intellectual property litigation or handle oil and gas rights where so much money is riding on their performance will have larger claims and thus a greater need for higher limits. Real Estate and personal injury law usually have the highest frequency of malpractice actions. The insurance application should clearly show the percentage of each area of practice and any other types of activities the firm handles. And it should include relevant supplemental applications.
In the event of an expensive claim, how much of a hit can your law firm afford to absorb?
When the stakes are high, an agent needs to encourage the law-firm client to think about the losses it could comfortably absorb and help it determine the limits and deductible that are appropriate for its risk. Coverage for defense costs is particularly important for lawyers because they could face disciplinary procedures in addition to civil claims. Ideally, you’ll try to get defense coverage outside the limits and uncapped so it doesn’t erode the indemnity limits. Something as easy to do as typing the wrong name in an email that forwards confidential information to a third party could prove very expensive.
What kind of system do you use to track time-sensitive matters? To detect potential conflicts of interest?
The world works on deadlines and an attorney who fails to file papers on time, or misses a court or hearing date, risks getting adequate compensation for a client. Similarly, a law firm without an efficient way to screen for possible conflicts of interest among its clients could find itself in an untenable position. Clients using calendaring tools and conflict of interest software demonstrate good risk management controls that can work in their favor. If these tools are not currently being used, an agent can use that information to act as the client’s trusted adviser.
Do you currently have E&O coverage? Do you understand how a claims-made policy works?
Lawyers may be very comfortable with contracts, but that doesn’t negate the agent’s responsibility to explain that errors and omissions policies are written on a claims-made basis and how it differs from an occurrence policy. These clients need to maintain continuous E&O coverage to protect their futures from the results of their past work when it is challenged years after the work actually was performed. The agent will need to see the current policy dec page to properly extend the coverage back to the first date of continuous coverage.

At Burns & Wilcox our expertise becomes your expertise. Our marketing materials are designed to help you give your clients what they want to hear – yes to almost any hard-to-place-risk.

Lawyers Professional Errors and Omissions (E&O): Applications

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