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Malpractice Insurance Report

By Megan Kinneyn | Feb. 2, 2007


Law Office Management

Feb. 2, 2007

Malpractice Insurance Report

With more insurance companies looking to do business in California this year, malpractice premiums should stay flat, or dip slightly. Knowing how to use technology in your practice doesn't hurt premiums either. By Kelly Niknejad

By Kelly Niknejad
     
      With more insurance companies looking to do business in California this year, legal malpractice premiums should stay flat, or dip slightly. But be warned: Attorneys need to stay abreast of technology.
      Insurance companies want their law firm clients to be "more state of the art" in terms of using technology, says Carol Bauman, vice president of Daniels-Head Insurance in California, an administrator for Zurich North America. "If attorneys are not savvy from a technological standpoint, then they may not be meeting the standard of care." In fact, she says, they could be charged higher premiums as a result.
      Edith Matthai, a Los Angeles attorney specializing in legal malpractice, says she has seen a lot more claims arising from technology issues, including preservation of evidence and electronic discovery. Not only that, but in December a new set of Federal Rules of Civil Procedure concerning the discovery and management of electronically stored information took effect.
      During the past few years, as more clients have charged their attorneys with conflicts of interest, insurance companies have come to expect firms to be equipped with computer software that can detect potential conflicts from the outset. Such software is great for catching cases in which a firm represents or has represented one of the parties, says Michael B. Murphy, head of Severson & Werson's Insurance Practice Group in San Francisco. "But in terms of less visible or less readily definable conflicts, such as subject-matter conflicts"?representing a client who claims that another of the firm's clients has a competing business or marketing interest?"that's very, very difficult," he says.
      Even a firm's website is not exempt from scrutiny. "We Google [our insured] firms on a regular basis to find out what they say on their websites and how sophisticated their websites are," says Dan McKenna, lawyers' program manager at Mitchell & Mitchell Insurance Agency. "Sometimes this helps us determine if they are a risk or not."
      For example, firms can run into problems when they puff themselves up on the Web. Attorneys might list entertainment law as an area of practice when in fact it is simply a type of case they hope to take on. "If something goes wrong and you end up in court," McKenna says, "that website becomes a huge bulletin-board picture in the courtroom."
      Following is our yearly review of the carriers that offer professional liability coverage to California attorneys.
     
     
      Admiral Insurance Company
      847/806-6590, www.admiralins.com
      Best's Rating: A+
      Restrictions based on firm size/specialty/practice area: Firms with three or more attorneys
      Limits of liability: Up to $5 million
      Deductible: $10,000 or higher
      Is input allowed in selection of counsel? Yes, if provided by endorsement
      Is there a program to prevent malpractice suits? Yes, malpractice hotline
      Years covering California lawyers: 13
      Admitted in California? No
     
      Arch Insurance Company
      (sponsored by the State Bar)
      800/343-0132, www.archinsurance.com
      Best's Rating: A-
      Restrictions based on firm size/specialty/practice area: None, but available deductible and limit-of-liability options may vary depending on size of firm, areas of practice, and claim history
      Limits of liability: Up to $10 million per claim/annual aggregate
      Deductible: Up to $250,000 per claim; loss-only and annual aggregate deductibles available for qualifying firms
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes, seminars in cooperation with the State Bar, risk-management website, and a toll-free hotline
      Years covering California lawyers: 5
      Admitted in California? Yes
     
      Attorneys' Insurance Mutual Risk Retention Group, Inc.
      James Belding, 201/460-6726, or Bruce Wilson, 203/655-1639 www.aimrrg.com
      Best's Rating: Not rated
      Restrictions based on firm size/specialty/practice area: Firms with 45 or more practicing attorneys
      Limits of liability: $15 million to more than $100 million
      Deductible: $500,000
      Is input allowed in selection of counsel? Yes, insured has choice
      Is there a program to prevent malpractice suits? Yes
      Years covering California lawyers: 21
      Admitted in California? Yes
     
      Attorney's Liability Assurance Society, Inc.
      (ALAS), A Risk Retention Group
      312/697-6900, www.alas.com
      Best's Rating: Not rated
      Restrictions based on firm size/specialty/practice area: Firms with 35 or more practicing attorneys
      Limits of liability: Up to $75 million per claim/$150 million aggregate
      Deductible: Retention: $100,000 per claim/$300,000 aggregate to $3 million per claim/$6 million aggregate
      Is input allowed in selection of counsel? Yes, firm selects defense counsel subject to approval by ALAS
      Is there a program to prevent malpractice suits? Yes, including Loss Prevention Journals; email hotlines; firm seminars; Loss Prevention Manual; videos; management guides; and practice area consultation groups
      Years covering California lawyers: 28
      Admitted in California? No
     
      AXIS U.S. Insurance Companies
      Adam Sharaf, 860/707-1707, www.axiscapital.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with ten or more attorneys
      Limits of liability: Up to $25 million
      Deductible: Minimum of $25,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes, risk-management services and hotline for primary insureds
      Years covering California lawyers: 3
      Admitted in California? Yes
     
      California Aon Attorneys' Advantage Insurance Program
      (L.A. County Bar Associationsponsored program)
      Chris Brammer, 818/655-1305, www.attorneys-advantage.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None, but underwriting guidelines apply
      Limits of liability: $100,000 per claim/$300,000 aggregate through $5 million per claim/aggregate
      Deductible: $1,000 to $100,000
      Is input allowed in selection of counsel? No provision, but insured's input will be considered
      Is there a program to prevent malpractice suits? In development
      Years covering California lawyers: 16
      Admitted in California? No
     
      Carolina Casualty Insurance Company
      847/806-6590, www.carolinacas.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with three or more attorneys
      Limits of liability: Up to $5 million
      Deductible: $10,000 or higher
      Is input allowed in selection of counsel? Yes, if provided by endorsement
      Is there a program to prevent malpractice suits? Yes, malpractice hotline
      Years covering California lawyers: 13
      Admitted in California? Yes
     
      The Chubb Group of Insurance Companies
      James Rhyner, 908/903-5183, www.chubb.com
      Best's Rating: A++
      Restrictions based on firm size/specialty/practice area: Firms with ten or more attorneys. Does not cover intellectual property firms.
      Limits of liability: Up to $10 million per claim. Limits up to $20 million and excess limits also available.
      Deductible: $25,000 minimum per claim. No aggregate retentions offered at present.
      Is input allowed in selection of counsel? Yes, insured has choice, but no defense expenses may be incurred without underwriter's consent
      Is there a program to prevent malpractice suits? Advice from risk-management counsel available upon request; e-newsletter, handbooks, and seminars
      Years covering California lawyers: 15
      Admitted in California? Yes
     
      The Colony Group
      Art Davis, 480/889-5804, www.colonyins.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: No more than 40 lawyers per practice. Real estate development, syndication, or investment visa work is prohibited.
      Limits of liability: Up to $6 million each occurrence/$8 million aggregate on select accounts
      Deductible: $5,000 to $100,000
      Is input allowed in selection of counsel? Insured's input will be considered
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 10+
      Admitted in California? No
     
      Continental Casualty Company (CNA)
      Mitchell & Mitchell (1 to 34 attorneys), Dan McKenna, 800/247-1403, www.mitchellandmitchell.com; CNA Pro (35 or more), Stuart Pattison, 212/440-7447, www.cnapro.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None
      Limits of liability: Up to $15 million
      Deductible: $5,000 or higher
      Is input allowed in selection of counsel? Yes, on an exception basis by endorsement
      Is there a program to prevent malpractice suits? Yes, risk-management seminar programs, malpractice hotline, and semiannual periodicals
      Years covering California lawyers: 23
      Admitted in California? Yes
     
      Federal Insurance Company
      (part of the Chubb Group of Insurance Companies)
      Myles Alonzo, 415/433-7700, ext. 10, www.chubb.com
      Best's Rating: A++
      Restrictions based on firm size/specialty/practice area: Firms with two to nine full-time attorneys; no class action or securities work, no mass tort litigation; tax work up to 10 percent
      Limits of liability: Up to $5 million
      Deductible: Varies
      Is input allowed in selection of counsel? Selection from list of Chubb-approved counsel
      Is there a program to prevent malpractice suits? Three free CLE seminars touching on various legal malpractice issues
      Years covering California lawyers: 10+
      Admitted in California? Yes
     
      First Mercury Insurance Company
      John Biggio, 800/982-1151, ext. 18, www.firstindemnity.net
      Best's Rating: A-
      Restrictions based on firm size/specialty/practice area: None, firms with 1 to 200 attorneys
      Limits of liability: Up to $5 million
      Deductible: Minimum of $1,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes
      Years covering California lawyers: 7
      Admitted in California? No
     
      Gotham Insurance Co.
      (parent company NYMAGIC, Inc.)
      Ed Skoch, 212/551-0600 www.nymagic.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None, but generally smaller firms (with up to 30 attorneys) and sole practitioners, including attorneys engaged in intellectual property law
      Limits of liability: $2 million
      Deductible: No restrictions
      Is input allowed in selection of counsel? Depends on circumstances
      Is there a program to prevent malpractice suits? Yes, loss-prevention program includes toll-free help line
      Years covering California lawyers: 4
      Admitted in California? No
     
      Great American Insurance Company (GAIC)
      800/299-4331, www.greatamericanlawyer.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None
      Limits of liability: Up to $10 million per claim/aggregate
      Deductible: Minimum of $2,500, maximum of $500,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes, newsletter, topic advisories, online CLE, seminars, audiotapes, and law firm audits
      Years covering California lawyers: 16
      Admitted in California? Yes
     
      Hartford Specialty
      Susan Glenn, 212/277-0746, www.hfpinsurance.com
      Best's Rating: A+
      Restrictions based on firm size/specialty/practice area: No intellectual property or plaintiff class action work
      Limits of liability: Up to $15 million per claim/aggregate
      Deductible: Minimum of $25,000
      Is input allowed in selection of counsel? Yes, mutual choice
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: N/A
      Admitted in California? Yes
     
      Interstate Fire and Casualty Company
      (a member of Fireman's Fund Specialty)
      Beth Graham, 800/692-5752, ext. 236, www.ffic.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Niche coverage for firms with an area of practice that no longer fits the standard market. Includes securities, copyright, patent, trademark, entertainment, some class action work.
      Limits of liability: Maximum of $5 million. Excess limits are also available.
      Deductible: Minimum of $5,000
      Is input allowed in selection of counsel? No
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 19
      Admitted in California? No
     
      James River Insurance Company
      John Clarke, 804/289-2700, www.jamesriverins.com
      Best's Rating: A-
      Restrictions based on firm size/specialty/practice area: Firms with 1 to 15 attorneys; no firms that have large intellectual property practices or that do SEC work involving publicly traded companies
      Limits of liability: Up to $5 million
      Deductible: Varies
      Is input allowed in selection of counsel? No
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 4
      Admitted in California? No
     
      Lawyers' Mutual Insurance Company
      800/252-2045, 818/565-5512; John Burke, ext. 214, or Cathy Sargent, ext. 227, www.lmic.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None for standard program or Strong Start program for lawyers in practice less than 36 months. Specialized lower-premium programs for appellate, immigration, criminal, insurance defense, and arbitration/mediation lawyers.
      Limits of liability: $100,000 per claim/$300,000 aggregate, up to $5 million per claim/$7 million aggregate for standard program
      Deductible: $1,000 to $100,000 per claim for standard program
      Is input allowed in selection of counsel? No
      Is there a program to prevent malpractice suits? Yes, loss-prevention and risk-management seminars, bulletins, tapes, MCLE website
      Years covering California lawyers: 29
      Admitted in California? Yes
     
      Lawyer's Protector Plan
      (underwritten by Greenwich Insurance Company, a member of XL Capital Group), 800/336-5529, ext. 4207 www.lawyers.protectorplan.com
      Best's Rating: A+
      Restrictions based on firm size/specialty/practice area: No automatic declines; program is for firms with one to ten attorneys, but also able to broker eleven-plus
      Limits of liability: Up to $5 million per claim/aggregate
      Deductible: Up to $100,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 20+
      Admitted in California? Yes
     
      Liberty Surplus Insurance Corporation
      (a member of the Liberty Mutual Group)
      Justin Camara, 415/983-4520, or Chris DePuy, 212/208-4157, www.libertyiu.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with up to 125 attorneys (primary), firms with 5 or more attorneys (excess)
      Limits of liability: Up to $10 million
      Deductible: Starting at $25,000 per claim
      Is input allowed in selection of counsel? At underwriter's discretion, insured's input considered
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 6
      Admitted in California? No
     
      Lloyd's of London
      (underwritten by Egloff Risk Management Systems)
      Al Hernandez, 818/992-5744, www.lloyds.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None
      Limits of liability: $250,000/$250,000 to more than $20 million/$20 million
      Deductible: Minimum of $10,000
      Is input allowed in selection of counsel? Yes, but selection must be approved by the underwriters
      Is there a program to prevent malpractice suits? Yes, tailored risk management for law firms
      Years covering California lawyers: 30+
      Admitted in California? No
     
      Navigators Pro
      Israel Notoma, 212/244-2333, or Godfrey Brown, 212/613-4261 www.navg.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with up to 150 attorneys. Caps of 25 percent on SEC, intellectual property/patent, plaintiffs private investigators, and plaintiffs workers compensation cases; no class action work.
      Limits of liability: Up to $10 million
      Deductible: Minimum of $10,000
      Is input allowed in selection of counsel? Insured's requests will be considered
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 6
      Admitted in California? No
     
      New York Marine and General Insurance Co.
      (parent company NYMAGIC, Inc.)
      Ed Skoch, 212/551-0600, www.nymagic.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None, but generally smaller firms (with up to 30 attorneys) and sole practitioners, including attorneys engaged in intellectual property law
      Limits of liability: $2 million
      Deductible: No restrictions
      Is input allowed in selection of counsel? Depends on circumstances
      Is there a program to prevent malpractice suits? Yes, loss-prevention program includes toll-free help line
      Years covering California lawyers: 4
      Admitted in California? Yes
     
      OneBeacon Insurance Company
      Kim Pihlstrom, 312/821-4710, www.onebeacon.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with up to 150 attorneys
      Limits of liability: $10 million
      Deductible: Minimum of $1,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes
      Years covering California lawyers: 1
      Admitted in California? Yes
     
      PilotLegis, RPG
      (Aon is exclusive broker)
      Margaret Hepper, 201/460-6723 www.pilotlegis.com
      Best's Rating: Not rated
      Restrictions based on firm size/specialty/practice area: General commercial, intellectual property, and insurance defense firms with 20 to 200 attorneys; contingent upon successful completion of risk review
      Limits of liability: Up to $30 million
      Deductible: Negotiable
      Is input allowed in selection of counsel? Yes, insured has choice
      Is there a program to prevent malpractice suits? Yes, annual risk-management programs, on-site presentations, and annual reviews
      Years covering California lawyers: 16
      Admitted in California? No
     
      ProSecure® Lawyers Risk Purchasing Group
      (written through Hiscox, a Lloyd's of London facility)
      Mary Whisenand, 800/371-2246, www.personal-plans.com/prosecure
      Best's Rating: Not rated
      Restrictions based on firm size/specialty/practice area: Solo lawyers and small law firms that have difficulty obtaining coverage due to claims, practice areas, or other underwriting restrictions. Full prior acts coverage is available to qualified firms.
      Limits of liability: Up to $5 million per claim/aggregate
      Deductible: Minimum of $5,000, maximum of $250,000 per claim
      Is input allowed in selection of counsel? No, unless specifically underwritten
      Is there a program to prevent malpractice suits? Yes, education and risk-management seminars
      Years covering California lawyers: 4
      Admitted in California? No
     
      Quanta Specialty Lines Insurance Company
      Jerry O'Dwyer, 212/373-1874
      www.quantaholdings.com
      Best's Rating: A-
      Restrictions based on firm size/specialty/practice area: Firms with 5 to 100 lawyers; firms with more than 100 on an excess basis only. Firms with significant practice in medical malpractice plaintiff, class action plaintiff, entertainment, or patent practices will be selectively considered for excess options only.
      Limits of liability: Up to $10 million
      Deductible: Minimum of $25,000
      Is input allowed in selection of counsel? Yes, mutual choice
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 2
      Admitted in California? No
     
      State National Insurance Company
      (a member of the State National Insurance Group)
      John Biggio, 800/982-1151, ext. 18, www.firstindemnity.net
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Firms with 1 to 200 attorneys
      Limits of liability: Up to $5 million
      Deductible: Minimum of $1,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? Yes
      Years covering California lawyers: 7
      Admitted in California? Yes
     
      Swiss Re
      (underwritten by Westport Insurance Corporation)
      Mike Furlong, 800/255-6931, www.swissre.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Top-tier firms with 20 to 250 attorneys in all areas of practice, subject to underwriting guidelines
      Limits of liability: Up to $10 million (expecting to launch product for excess liability)
      Deductible: Based on firm size
      Is input allowed in selection of counsel? Company reserves right to select counsel, but requests considered, available by endorsement
      Is there a program to prevent malpractice suits? Yes, free, confidential hotline for a defense firm; newsletter; and website
      Years covering California lawyers: 36
      Admitted in California? Yes
     
      St. Paul Fire & Marine Insurance Company
      (endorsed by Defense Research Institute)
      Willis of New Hampshire, J. Norman Monfort, 813/490-6844, www.willis.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: Minimum 51 percent defense practice required
      Limits of liability: Up to $2 million per wrongful act
      Deductible: Minimum of $5,000 per wrongful act
      Is input allowed in selection of counsel? Yes, mutual counsel selection
      Is there a program to prevent malpractice suits? Yes, risk-management materials and visits may be arranged
      Years covering California lawyers: 11
      Admitted in California? Yes
     
      Target
      (underwritten by Hartford)
      Shawna Reidy, 800/692-5752, ext. 214 www.target-capital.com
      Best's Rating: A+
      Restrictions based on firm size/specialty/practice area: Firms with up to 20 attorneys; no claims filed in past five years
      Limits of liability: Up to $5 million
      Deductible: Minimum of $5,000
      Is input allowed in selection of counsel? Yes, mutual selection
      Is there a program to prevent malpractice suits? Yes, hotline available for Hartford insureds
      Years covering California lawyers: 25+
      Admitted in California? Yes
     
      United National Insurance Company
      (underwriting agent), Michele McCrohan, Synergy Professional Associates, 973/995-0519, www.unitednat.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None, but company specializes in hard-to-place firms with claims, practice area, or ethics problems
      Limits of liability: Up to $2 million per claim for
      primary coverage
      Deductible: Minimum of $2,500 for standard accounts and $5,000 for hard-to-place accounts
      Is input allowed in selection of counsel? Negotiable
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 16
      Admitted in California? No
     
      XL Select Professional, a division of XL America, Inc.
      (endorsed by the Bar Association of San Francisco and the San Diego County Bar Association)
      Greg Hayden, vice president, 972/383-7152, www.xlprograms.com
      Best's Rating: A+
      Restrictions based on firm size/specialty/practice area: Firms with 11 to 100 attorneys
      Limits of liability: Up to $10 million
      Deductible: $5,000 to $100,000
      Is input allowed in selection of counsel? Yes
      Is there a program to prevent malpractice suits? No
      Years covering California lawyers: 7 (4 as XL, 3 representing Kemper Insurance)
      Admitted in California? Yes
     
      Zurich North America
      (California administrator)
      800/848-7160, www.zurichna.com
      Best's Rating: A
      Restrictions based on firm size/specialty/practice area: None for standard program (full time), although underwriting guidelines apply; part-time and moonlighting policies available to qualified attorneys
      Limits of liability: $100,000 per claim/$300,000 aggregate, up to $10 million per claim/aggregate
      Deductible: Depends on policy form and firm size; many options available, including $0 (zero) deductible and loss-only deductibles
      Is input allowed in selection of counsel? No provision, but suggestions considered
      Is there a program to prevent malpractice suits? Yes, loss-prevention advice hotline, and VersusLaw Legal Research Database on Internet, both at no charge to policyholders
      Years covering California lawyers: 12
      Admitted in California? Yes
     
      Best's Rating = A.M. Best's Financial Strength Rating is an independent opinion, based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance, and business profile. The grades measure Best's opinion of the insurer's ability to meet its obligations to policyholders. See Best's website (www.ambest.com) for more information, such as financial size of the companies.
     
#256825

Megan Kinneyn

Daily Journal Staff Writer

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