| 1. |
Can gaps in coverage be created when switching
carriers? |
| |
|
| |
Yes. When switching to a new insurance
carrier, under a claims made policy, you need to be
aware of potential gaps in coverage. If you report a
claim to your new carrier, they will be concerned about
your “prior knowledge” of the circumstances
surrounding the claim. There is a potential that your
claim may be denied because it should have been reported
to your prior carrier. However, because you switched
your coverage, you no longer have a contract with the
prior carrier, creating a gap. |
| |
|
| 2. |
How can you avoid creating a gap in coverage? |
| |
|
| |
There are three ways to avoid a coverage
gap in a claims-made policy.
a. Purchase an extended reporting period from your existing
carrier before switching coverage. This is typically an
expense option because the extended reporting period (tail
coverage) can cost 225% of the expiring premium. When
added to the first year policy with the new carrier, this
approach is cost prohibitive.
b. Obtain a waiver of the prior knowledge exclusion from
the new carrier. This is the language in the contract
that allows the carrier to deny a claim, based on circumstances
you knew or should have known. This waiver is rarely provided
by the carrier because they may be picking up claims they
did not intend to cover.
c. Maintain continuous coverage with your existing carrier.
Unless the carrier has solvency issues (rated lower than
B+ by AM Best) or is withdrawing from the market, the
safest way to avoid a gap is to maintain continuity of
coverage. The longer you have been with one carrier the
less likely they can deny coverage because of circumstance
you knew or should have known resulting in a claim. |
| |
Top |
| |
| 1. |
Is this a new program for Chicago
Insurance Company? |
| |
|
| |
No. Fireman’s Fund Interstate
has been writing lawyer’s liability since 1995,
using its Chicago Insurance Company (CIC). They have
demonstrated a dedication to the lawyer’s of the
Northeast – and have achieved an enviable reputation
for broad coverage. CIC has also earned well deserved
praise for the claim services which is located in New
York State to ensure the highest degree of efficient
and expert claim response should the need arise. CIC
continues its commitment to the legal malpractice market
and is available through ProAccess, LLC, as their General Agent in the Northeast. |
| |
|
| 2. |
Why has Chicago Insurance Company non-renewed
my law firm? |
| |
|
| |
Chicago Insurance Company severed its agency
relationship with Bertholon-Rowland and as a result of
a contractual relationship needed to non-renew existing
insureds. However, Chicago Insurance Company will continue
coverage and renew firms, subject to an application review. |
| |
|
| 3. |
In which States is the ProAccess/CIC policy
available for lawyers malpractice? |
| |
|
| |
ProAccess has binding authority on behalf
of CIC in the following states – New York, New
Jersey, Massachusetts, Vermont, New Hampshire, Maine,
Rhode Island, Maryland, Virginia and the District of
Columbia |
| |
|
| 4. |
Is there any size of firm restrictions? |
| |
|
| |
NONE – CIC has the ability to write
any size firm, which falls within its underwriting parameters. |
| |
|
| 5. |
What limits are available? |
| |
|
| |
Up to $20M. |
| |
|
| |
|
|
|
Top |
| |
|
|
| 1. |
Why have carriers reduced the limits of
liability they had been offering? |
| |
|
| |
The insurance marketplace is experiencing
a “capacity” shortage. There is less insurance
capital, or dollars available to write risks. As a result
many carriers have reduced the limits of liability they
are willing to offer. |
| |
|
| 2. |
Why must I find another carrier to purchase
higher limits? |
| |
|
| |
As the insurance capacity has shrunk it
is necessary to spread your coverage among several carriers.
Some carriers will only write excess coverage. The prefer
to be further removed from the frequent losses, but will
pay severe losses if they happen. |
| |
|
| 3. |
How is an excess premium calculated since
I do not need to complete an application? |
| |
|
| |
The excess underwriter is evaluating the
primary carrier. They are concerned with the financial
strength of the primary carrier, as well as, the premium
and coverage offered by the primary carrier. The excess
premium is a percentage of the primary or underlying policy. |
| |
|
| 4. |
What limits are available? |
| |
|
| |
Most carriers will only offer matching limits
of liability. Meaning they will not offer a greater limit
then the underlying carrier. So if the underlying is $1m
the excess carrier will only offer $1m excess of the $1m.
Most carriers are only putting out $10m of limits as a
maximum. |
| |
|
|
|
Top |
| |
|
| 1. |
Are there many carriers available to write
lawyers? |
| |
|
| |
Typically it is the smaller firm, under
6 attorneys, that has the most difficulty. The larger
firms can get terms, the firm may not like the price for
coverage offered. |
| |
|
| 2. |
What limits are available? |
| |
|
| |
For firms that have a hazardous Area of
Practice or claims history $1m is the maximum carriers
are offering? |
| |
|
| 3. |
Will they cover prior acts? |
| |
|
| |
In some cases we can get prior acts coverage.
However, if the firm has a claims history coverage will
be offered with the retroactive date at inception. |
