5 Questions To Ask About Your Legal Malpractice InsuranceNovember 21, 2014 – In The News
Robert Tintner was quoted in the Law360 article, “5 Questions To Ask About Your Legal Malpractice Insurance.” Full text can be found in the November 21, 2014, issue, but a synopsis is below.
A malpractice lawsuit can be an attorney’s worst nightmare. Although many firms have malpractice insurance, few are asking the correct questions about what exactly is covered under their policy.
A large amount of malpractice policies exclude claims that "arise almost exclusively out of professional services but are intentional torts, such as wrongful use of civil proceedings, abuse of legal process or defamation," said Robert S. Tintner. Firms should look closely at whether coverage exists for such claims under their policies, he noted. If not, firms could be exposed to potential judgments or settlements, and perhaps defense costs.
"The last thing any law firm wants is a policy that disclaims all intentional tort coverage, particularly for claims that arise out of the provision of legal services," Tintner noted. "That is obviously something that the law firm needs to analyze closely. Such a review would also call to the law firm's attention how the policy defines the provision of legal services."
Firms should always know what the insurer's reporting requirements are.
Even if an event doesn’t lead to a claim right away, the insured firm or attorney should notify the insurer if it may. For example, if a law firm failed to join a third party to an action and then becomes barred from doing so, that may not immediately give rise to a claim — but it may in the future, Tintner stated.
"Most policies are clear, and most insurers are unwilling to negotiate that type of language," Tintner said. "Strict-notice requirements — even in the absence of actual prejudice to the insurer — are generally enforceable."
It is imperative for insureds to know what sort of notice an insurance company must give prior to canceling a malpractice policy, Tintner noted.
“Sometimes law firms may get behind on paying premiums, and depending upon the policy language, the insurer can cancel immediately,” Tintner said. “Law firms should not enter into policies which permit the insurer to cancel for nonpayment of premiums which has the potential to leave the firm exposed. In addition, law firms want policies that require the insurer to give as much notice as possible in order to cancel the policy."
Lastly, Tintner warned that insureds should be cautious of policies with hammer provisions.
"In some circumstances, insurers will offer discounted premiums, lower deductibles and so forth if the insured will agree to a hammer provision and permit the decision of whether to settle to the insurer," he said.