At Paragon Underwriters, Inc., we know that a law firm’s commitment to proactive risk management coupled with sound business practices can lessen the likelihood that a lawyer will face a malpractice claim. It can also help mitigate potential losses should a lawyer be sued. Our Risk Management Program for CNA’s Insured Lawyers is ideal for Michigan’s law firms. Minimizing and managing an attorney’s risk is essential. At Paragon Underwriters, we take great pride in putting together the best professional liability insurance coverage for our clients, but we also make it a part of our mission to teach (and preach) good risk management. One of the most important aspects of a responsible risk management program is for attorneys to bring their insurer into the claims process as early as possible – ideally as soon as a claim is noticed.
This practice is the most responsible action and can save a lot of money — both the attorney and the law firm. When a lawyer contacts the insurer or agent as soon as trouble is brewing, it helps get everyone prepared to handle the situation.
Reporting a potential claim early enables the malpractice insurer to begin working on a resolution, which helps get the attorney and the firm back to business without any external hassles or distractions. The insurer may determine that it is appropriate to retain legal counsel to assist with a pre-claim situation. Other services may include grievance coverage, subpoena assistance, 24/7 risk management hotline, deductible reduction and oftentimes cyber liability coverage.
It is very important to remember that making certain actions without consultation with the insurer can result in a coverage denial. Examples of this include admitting liability, assuming damages, voluntarily making any payments, or incurring claims expenses. Such actions will likely violate policy conditions, which may result in a denial of coverage. Policyholders should not take action without first receiving guidance from their insurance agent or insurance company. Early reporting may trigger deductible reduction features and the attorney’s policy may offer a feature which reduces the deductible if you report claims early or settle claims within a certain period of time (usually 12 months). This could reduce your deductible by as much as 50 percent.
Contacting your insurer or agent is a good way to avoid costly mistakes and problems. For example, misstatements on insurance applications may result in a higher premium or even the rescission of a policy based on wrong information. Call your underwriter or agent with questions about the application and the information requested. A phone call is an easy way to correct errors before they occur.
Do not hesitate to contact our professional liability team at Paragon to work with you in protecting your business. We make it our mission to help you manage the risk and avoid a catastrophic situation.