• Liability Insurance (18)

Our Engagement Letter Review

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Published on: February 20, 2014


Well, we are wrapping up our first month of engagement letter reviews and I’m very happy to say our CNA Lawyer’s Professional Liability insureds are coming through with flying colors!
By CNA’s definition, an engagement agreement is a written agreement between attorney and client in which key terms of the legal representation are defined, including the identity of the client, the scope of the representation, legal fees and expenses, responsibilities of the law firm and client, termination of the representation, and file retention and destruction.
Does anyone have anything else they recommend adding?
Thanks to our CNA Professional Liability insureds!

By Dan McKenna, JD, RPLU

For more information regarding engagement letters for lawyers, please see theLawyer’s Toolkit.

The Hammer Clause and How It Affects Your Right to Settle

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Published on: February 13, 2014

If you have a professional liability policy, you should be aware of your rights to settle in the event that a claim occurs. Many policies include what’s called a “hammer clause”. This allows the insurance company to cap its liability to the amount for which the claim could have been settled plus any claims expenses incurred. If the insured chooses to continue to fight the matter, he or she will be responsible for any additional settlement and fees incurred.

A sample “hammer clause” may read:

“Insurer will not settle or compromise any claim without the consent of the insured. If, however, the insured refuses to consent to a settlement or compromise recommended by insurer and elects to contest such claim or continue legal proceedings in connection with such claim, then insurer’s liability for the claim shall not exceed the amount for which the claim could have been so settled, plus claims expenses incurred up to the date of such refusal.”

A policy that does not have a hammer clause allows the insured to have more control in a claim and the insurance company must respect the insured’s “final say”. In our Lawyer’s Professional Liability program through CNA, the policy form has recently been revised to remove the hammer clause. According to CNA, “the prior language gave the Company the option to walk from a claim at the amount that the claim could have been settled, thereby limiting its exposure to an acceptable settlement regardless of the consent of the insured. [...] Having it [the hammer clause] in the policy was a Company advantage. Having it removed is an insured’s advantage.” Make sure you read your professional liability policy’s insuring agreement so that you know what your rights are around settling a claim.

2014 California Lawyer’s Professional Liability Insurance Report

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Published on: February 10, 2014
When it comes to the relationship between lawyers’ liability claims and the economy, the trend is fairly predictable. A rough financial period usually breeds a multiyear spike in professional liability claims, and the 2008 financial crisis and resulting dismal economy are no exception. In 2011 the number of claims increased 6 to 10 percent from the previous year, and in 2012 they jumped another 10 to 20 percent, according to a survey by risk management consulting firm Ames & Gough. But as the economy slowly stabilizes, 2013 seemed to be the first year indicative of a true leveling off.One obvious reason for more claims during an economic dip is that when things go wrong financially, people look to find fault. For example, real estate malpractice claims have been off the charts in California (and nationwide) which is easily traceable to the collapse of the market over the past five or six years, according to Randall A. Miller, a legal malpractice attorney and founding partner of Miller LLP in Los Angeles. “Obviously, the housing market generated a lot of claims against lawyers for errors committed during the course of those ill-fated transactions,” he says. “In fact, I’m impressed by the resiliency of this trend. Most of the legal work that resulted in malpractice claims would have been undertaken by 2007 or 2008. And yet, this work is continuing to generate lawsuits, which is emblematic of the depth of the real estate market fallout in California.”

Another unusual trend Miller has noticed of late is the emergence of very-high-dollar claims – some estimated at more than $50 million. Although he thinks this may be an aberration in the long term, it also highlights how intricate and high-stakes today’s transactions are, even compared to just ten years ago. “IP protection, for example, can be very expensive,” says Miller. “If a lawyer commits an error in an IP deal, he or she incurs a high amount of risk. It can be devastating for an insurance company.”

More generally, though, Miller expects that as the economy gets back on track, the number of claims will return to prerecession levels. One of the reasons for this evening out is a noticeable return to normalcy for many attorneys regarding their practice areas. Recession-time claims are often the result of what Mitchell & Mitchell professional liability program manager Dan McKenna calls “dabbling” – lawyers venturing outside of their usual practices.

“Now that the economy is more stable, my staff and I have seen less ‘dabbling’ ” says McKenna. “During the recession years, a lot of attorneys were forced to start taking any work that would walk in the door. For example, an attorney who does estate planning but whose work is slow would take on a personal injury case, which he might not know much about. Now we’re back to people showing more focus in their specialized practice areas, which is a really good thing for the legal profession.”


California Liability Insurance for Lawyers

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Published on: January 21, 2014

Professionals MeetingLawyers work closely with their clients, gathering very personal details with which they build cases upon in preparation for trials. This puts lawyers and law firms at a unique risk for loss or corruption of sensitive information and legal records. Errors and omissions insurance (E&O), also known as legal liability insurance, is designed to protect legal professionals from this risk and from litigation associated with data loss, negligence or failure to produce results due to negligence.

Some risks that lawyers may be liable for include:

  • Identity theft of clients
  • Misplaced legal documents
  • Loss or corruption of files due to hacking
  • Forensic and crisis management expenses after a loss
  • Failure to perform a job properly

Though these instances do not frequently occur, they do happen and they can add up to be extremely costly. E&O insurance is not required by law (though lawyers must inform clients if they carry this type of policy or not), but law firms would be wise to consider this specialized coverage for the specialized risks they face. Lawyers can best serve the public when they themselves are protected from charges of negligence or some other form of error that affected a client.

Without E&O insurance, a law firm may face financial ruin and a tarnished reputation in the event of an unfavorable legal malpractice judgment. The expenses incurred after just one incident could skyrocket well into the hundreds of thousands of dollar, possibly closing the doors of a law firm for good.

Lawyers are all too familiar with liability situations and should take steps to protect themselves from such cases as well. Policies range in price and coverage, and are offered to both law firms and individual lawyers. Contact your independent agent to learn more about E&O options to protect your livelihood and reputation from your unique workplace risks.

Do you want to learn more about protecting your law firm? Call us at 888-512-8878 for a quote on California liability insurance for lawyers.

Liability Insurance for California Professionals

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Published on: December 17, 2013

For cost effective professional liability insurance, California businesses and professionals can depend on Mitchell & Mitchell Insurance of Novato.

At Mitchell & Mitchell Insurance we strive to guarantee that our clients have the highest quality coverage strategies that they both need and deserve. We work hard to recognize extreme risk exposures that could put a strain on your business venture—one source of risk that requires specialized attention is Professional Liability.

As a professional, you know that liability is serious—it’s a crucial component to maintaining your business, your finances and your overall reputation within the community. For professionals in the specialized medical field, such as doctors, surgeons, dentists and chiropractors, this form of coverage is best known as malpractice insurance; while lawyers, accountants, architects and engineers have come to know this additional protection as professional liability insurance.

California professionals, like professionals across the globe, make mistakes. Even professionals who are equipped with the best employees, the best management team and have the best risk management practices in place have been known to make an error. No matter what type of business you are involved in or how specialized your services are, your coverage needs come down to one thing—if you are in the business of providing a service to your client for a fee, you are vulnerable to professional liability risks.

Having customized professional liability insurance in California will provide you with the protection needed in the event that your service resulted in physical, mental or financial loss for your client. Typically, professional liability will cover court fees and defense costs, even if the lawsuit you are battling is unwarranted.

Each business and every professional is different, which is exactly why your professional liability coverage should be unique. You’ve worked so hard to build a positive, credible reputation for yourself—why let it be exposed to liability risk?

Contact Mitchell & Mitchell Insurance today to learn more about your options for professional liability insurance in California.

The Risks and Rewards of Social Network Use as a Lawyer

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Published on: February 4, 2013

It is no secret that there is talk of social media everywhere you turn. Facebook, Twitter and LinkedIn are becoming increasingly popular, especially among businesses. As a lawyer, it is in your best interest to learn more about these outlets, too! Having a social media presence can be great for your reputation, if it is being used correctly.

The downside? Those who are not careful with social media outlets may end up facing liability issues and other risks. These risks may include:

  • Decreased productivity in the workplace;
  • Employment related claims and issues;
  • Harm to your reputation;
  • Professional liability exposures;
  • And more…

The last thing any lawyer or firm needs is a lawsuit or issue due to poor social media usage. Fortunately, there are always ways to “play it safe.” How? Allow us to give you a few pointers…

  • Implement an effective social media policy in the office;
  • Make it a point to not “friend” coworkers and subordinates;
  • Be careful when posting about touchy subjects and/or inappropriate content;
  • Avoid posting inappropriate pictures, memes, e-cards, etc. Something you may find funny may not be funny at all to your fans or followers.
  • Monitor the use of social media in the office.

The bottom line: Social media is here to stay! It is important that you embrace it, but do so with caution. If you are careful and follow the above guidelines, you are sure to make the most of this outlet and keep lawsuits and liability disasters far away.


Employee Privacy in an Electronic Work Environment

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Published on: January 14, 2013

As a lawyer, it is important to be aware of employee privacy laws and liability. While it may seem like a good idea to monitor what is going on within your firm, you must be careful to not overstep boundaries. By monitoring company computers, e-mails, voice-mails and internet history, you may be doing a great job to keep all on task and focused. However, taking advantage of this may end up leading to the following:

  • Reduced productivity
  • Increased discrimination and harassment
  • Lawsuits by employees due to a “hostile work environment”

Every firm needs a good balance in order to remain safe from liability issues and suits. This means having a clear and concise monitoring policy in place. It should be in writing and the employees MUST be given notice of the employer’s intent to monitor. A policy should address the following areas:

  • Computer use
  • Telephone calls
  • E-mail tracking
  • Access to voice-mail
  • Internet monitoring
  • And any other form of monitoring that your firm may be engaging in…

Employees should also know that such things will be monitored ONLY for legitimate, business-related reasons. If you overstep this line, you may be facing a lawsuit much sooner than later.

If you are having trouble putting together your monitoring policy, you should reach out to a professional for help. Depending on state laws and regulations, you may need to adjust.

As long as employees are aware that monitoring is only done for professional and business reasons, there should be no problem. For more information, please contact our agents at Mitchell and Mitchell Insurance Agency. We would be happy to answer any questions you may have in regards to this matter!


The Perks of the Lawyers Professional Liability Program

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Published on: November 19, 2012

All of the best lawyers understand that liability insurance is a critical piece of coverage to carry. Without it, lawyers may end up facing their own legal issues sooner than later. Luckily, our agency is able to offer a comprehensive lawyers professional liability program.

There are plenty of perks to a lawyers’ professional liability program. Allow us to share a few of them with you right now.

  • Largest writer of the Lawyers Professional Liability in the United States.
  • There are more than 150,000 attorneys insured with the Program.
  • We have more than 45 years of experience insuring lawyers and attorneys in the private practice of law.
  • Rated “A” by A.M. Best.
  • There is a Risk Management Hotline available to those insured at no additional cost.
  • Largest writer of both federal and state judges professional liability in the United States as well as the largest writer of legal aid and public defender attorneys, too.
  • And much more. Check out the full list of policy highlights, here!

Are you interested in hearing more about this? Do not hesitate to reach out to our agents at Mitchell and Mitchell Insurance Agency. We would be more than happy to answer your burning questions and concerns.


The Secrets to Avoiding a Malpractice Claim

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Published on: October 30, 2012

As a professional in the field of law, you understand how important it is to cover your bases and protect yourself from lawsuits. However, just because you are usually defending individuals in court does not mean you should neglect your own actions. If you do not do your job properly, you may find yourself in the hot seat with your own malpractice suit.

To ensure that this does not happen to you, our agency has put together a quick list of tips. Here are just a few techniques you should take into consideration to avoid a malpractice claim:

  • Document EVERYTHING. No matter what the client says or does, it is a good idea to have it documented or recorded somewhere.
  • Never take initiative without getting a clients approval.
  • Pay close attention to your client, call him or her back when they leave a message, return e-mails… if you do not put your client first, he or she may become annoyed.
  • Always ask for client feedback to enhance your own skills.
  • Get everything confirmed in writing.
  • Be honest and upfront with clients.
  • Remain covered with the proper liability and malpractice insurance for the worst case scenario.

At Mitchell and Mitchell Insurance Agency, we are committed to making sure you do not face a malpractice claim in the near future. If so, we will be here with the proper coverage to protect you from the worst case financial scenario. The last thing you need is a malpractice claim to tarnish your reputation and damage your income.


What Attorney Offices Should Know About Negligence

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Published on: October 12, 2012

As one of the operators of a law firm you probably know everything in the book, but what about the other attorneys operating below you? Since each attorney must represent the firm to the highest degree, it’s important that everyone is on the same page when it comes to legal liability. Unfortunately, lawyers can sometimes be accused of negligence, but what exactly constitutes as negligence?

•    Breach of duty: Any time one of your attorneys or your firm as a whole fails to meet any contractual obligations or simply does not perform an adequate enough job.
•    Proximate cause: If an attorney is accused of negligence, the client or plaintiff must have probable cause that shows the attorney’s negligence actually contributed to the client’s damages.
•    Ethics: Any time an attorney violates any ethical standards which a client thinks leads to damages that attorney will be subject to a negligence claim.

As one of the operators of a law firm it’s important your attorneys know about negligence or else you may risk having to file a claim on your attorney professional liability insurance. If you have any more questions feel free to contact Mitchell & Mitchell Insurance today!

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