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Posted on: July 13, 2023 by Huntersure
Professionals in every industry should have insurance coverage to protect their assets against allegations. Lawyers are no different, and most firms should have lawyers professional liability coverage. Therefore, when assisting lawyers in finding coverage, it is critical to understand the importance of contracts within the insurance industry.
About four out of five attorneys will face malpractice suits at some point. Lawsuits against attorneys can happen to firms of any size, with smaller firms being the target of 70% of all claims. Thus, to manage the risk of litigation, most lawyers should carry lawyers professional liability coverage.
Lawsuits raised against attorneys can result in a loss of assets and reputation. Lawyers professional liability insurance protects attorneys against negligence, errors and omissions, and wrongful acts. Furthermore, some common claims include the following:
When clients make allegations or file litigation against a lawyer, the law firm has to pay for its defense, legal fees, and possibly the settlement. They choose professional liability to help cover those costs.
It is essential to understand the role of the contract in lawyers professional liability for insurance agents. The contract, or agreement, is a promise between the insurer and the insured that the insurer will pay benefits to a third party if certain events occur. To protect both parties is why everyone needs contracts in lawyers professional liability insurance policy writing.
The initial contract begins with the law firm’s application. Likewise, the application contains the representations made by the attorney, and the carrier will use those representations to determine pricing and coverage options.
Basic lawyers professional liability policies tend to cover claims a client brings against a lawyer. Ultimately, coverage can vary from policy to policy, based on the law firm’s needs. Contracts should always include the specific coverages and limitations of those coverages.
Premiums are determined mainly by various factors, including:
Insurance companies must submit rates and rating rules to the Department of Insurance in their state.
The contract will also include all responsibilities of the policyholder, which generally have the insured responsible for timely notice of all potential claims. Likewise, insureds must cooperate with the carrier to defend and settle the claim.
The insurance carrier is responsible for fulfilling its commitment outlined in the contract. Insurers evaluate the information associated with potential claims and will provide resolutions. Likewise, the carrier often pays the legal fees and settlement costs outlined in the policy’s terms.
When it comes to lawyers professional liability coverage, it is critical that the policies are legally binding. Legally binding agreements protect all parties involved. To ensure that an insurance agreement is valid, it must contain all essential elements of a legally binding agreement.
Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.
Posted in: Professional Liability Insurance