Lawyers' Professional Liability - FAQs

Lawyers' Professional Liability coverage helps protect New York law firms from costly legal malpractice lawsuits. Law firms that do not carry this legal liability coverage leave themselves open to a host of lawsuit possibilities, the most common being:

• Malpractice (a former client unhappy with the service or judgments they received).
• Suits that may arise out of a former client's assertion that the bill is too high, unjust or, more commonly, overdue.

If you already have lawyers' professional liability coverage, it's advisable that you look at two key features of your Bar Association's plan: Lateral Hire Coverage and Special Benefits for Sole Practitioners.

With Lateral Hire Coverage, attorneys who join your firm will be covered for their prior acts, provided 1) they meet the terms and conditions of the policy and are subject to underwriting approval; and 2) have maintained continuous claims-made coverage while in practice. (This coverage may be excluded from the policy upon your law firm's written request.)

And Special Benefits for Sole Practitioners include the following:

• Part-Time Program
• Extended Reporting Period
• Retiree Benefit
• New Attorney Discount

A legal malpractice claim is a demand made upon any insured for loss, including, but not limited to, service of suit or institution of arbitration proceedings or administrative proceedings against any insured.

Professional Liability insurance policies are written on a claims-made and reported basis. This means that the policy that is in force at the time a claim is made and reported, rather than when the error or omission is committed, is the policy that will respond. Due to the nature of professional services, there can be many years between the time an error or omission happens and discovery. This allows rates to be set more in accordance with what is currently happening with claims in the profession. Your policy may cover all activities since your firm began, or may have prior acts dates that limit coverage to more recent events for the firm or certain attorneys. The following are some of the rating factors that affect your premium.

• Step Rating - Claims-made and reported policies offer a credit for the first several years of coverage. Because services rendered in the first year of practice don't pose huge risk, these credits can help offset some premium costs. As the policy continues to renew each year, another year of exposure is added and the amount of credit available is reduced accordingly. The credit is eliminated entirely usually around the sixth year. Don't forget, your claims-made and reported policy covers accumulated years of practice in an ever widening window of exposure.
• Your Area of Practice - Certain areas of legal practice are exposed to more claims than others due to the nature of the work and client profile. Additionally, due to changes in the legal or economic climate, an area of practice that has traditionally been low risk can become volatile and begin to generate heightened claim activity. It is important to be clear on your areas of practice and classify these areas accurately on your application materials. The percentage of time you spend in any given area is also important.
• Your Attorney Roster - Your premium is also impacted by the attorneys working for your firm. Full time, long term attorneys generate the highest premium. The premium for newly hired attorneys generate credited premium because of step rating. Part time attorneys and Of Counsel attorneys also generally benefit from reduced premiums.
• Claims & Risk Management - There is no doubt that claims not only affect your premium, but your insurability as well. It is best to avoid them altogether and to minimize those that do happen. Frequent small claims and singular large claims can lead to increased premiums or a non-renewal of your insurance. The frequency of claims is often can be more problematic than one large one. Understanding and implementing certain practice management tools can prevent claims and make some easier to have dismissed. Engagement letters, computerized docket systems, client selection and fee collection protocols are as simple as seat belts and smoke detectors in minimizing or perhaps preventing loss.
• Credits - How can you reduce your premium? As an NYSBA member, a 5% Bar Association membership credit can will be applied to your Lawyers' Professional Liability Policy premium for membership in the New York State Bar Association, on a per-attorney basis. Additionally, a 7.5% risk control credit can be applied, per attorney for two years after completing a qualifying CNA risk management seminar. More information on these credits can be found on CNA's website at ) www.CNA.com

Extended Reporting Periods are used to provide coverage for claims that may be reported after the end of a claims-made policy period. The option to extend the reporting period does not extend the policy period. The ERP cannot be renewed or extended.

Defense Costs Inside the Limits of Liability means that both the loss amount and claims expenses are deducted from the available limit of liability, and reduce the amount of your available limits to pay the actual claim. Defense Costs Outside the Limits of Liability means that only the damages/settlement amount is deducted from the available limit of liability, and that defense costs are in addition to the limits of liability.

A range of deductibles, from $0 to $100,000 (depending on your New York law firm' size and the insurer's approval).

Please complete the brief form on this site and we will contact you about 90 days prior to your policy expiration date.

Payments for CNA accounts can be made online with your checking account once you have set up an account at www.cna.com. No Credit Cards are accepted at this time.

Payments for CNA accounts can be made online with your checking account once you have set up an account at www.cna.com. No Credit Cards are accepted at this time.

• Download an Application Form and Complete at Your Convenience
• Download a Premium Indication Form
• ^*Instructions for submission are included in the forms