Looking for a Deal: When Comparing LPL Policies Consider More Than Cost THE BAR PLAN® Value Is The Sum Of Many Factors. The economic downturn has caused many law firms to look for ways to cut their budgets. But for certain expenditures, firms need to look beyond the initial outlay. Choosing a malpractice carrier to protect your professional reputation is one such expense that should not be based on price alone. The policy that seems like a deal today may end up costing lawyers much more in the long-term. Rather than asking, “How much does it cost?” the more telling question is, “What do I get for my money?” Value is the sum of many factors. Some questions law fi rms should ask are: • Does the policy provide the broadest possible coverage? • Has the company ever pulled out of your market? • Is the carrier fi nancially stable? • Is the claims staff made up of lawyers with experience in malpractice claims? • Will the carrier provide local counsel to defend my claim? • Is the company a mutual company owned by its policyholders, or a stock company owned by shareholders? • Does the company give back to the legal community? • Has the carrier demonstrated a strong commitment to your market? Know Your Malpractice Carrier. There is real value in knowing your malpractice carrier, a vital partner in protecting your livelihood and professional reputation. When choosing a malpractice carrier, it’s important to consider whether the carrier you are considering is fi nancially stable. Moreover, does its perceived stability stem from its own operations, or the generosity of its parent company? Some insurance companies appear financially sound because of the financial strength of their parent companies. However, if the parent company decides it will no longer support a failing company or line of business, you could be left without coverage. A company’s size is not always indicative of its stability and quality. Look no further than the recent experience of some large banks and insurance companies to put that notion to rest. A true commitment is measured over the long-term. Many malpractice carriers move in and out of markets, sometimes by choice and sometimes because of financial or other issues. What would happen to your malpractice coverage should your carrier decide to pull out of your market? You could fi nd that the coverage you paid for is not there when you need it. When searching for the best rate, many firms overlook the type of coverage that a policy provides. Unfortunately, it’s not until a claim hits that the effects of inadequate coverage become apparent. When a claim does occur, who will handle that claim? Is your claims adjuster an attorney? Does the company provide experienced local counsel to defend you when a lawsuit is filed? Attorneys need to be protected by attorneys who understand their business, their legal rights and the seriousness of the effects of a claim on an attorney. The age-old adage of “you get what you pay for” holds true when considering malpractice insurance. In times when fi nances are tight, it is tempting to cut corners for short-term savings. But when it comes to protecting your livelihood and professional reputation, the best value is usually the proven company you know and trust.
Comments? Suggestions? Click here to contact us
Paid for by The Missouri Bar Sebrina Barrett, Executive Director PO Box 119 Jefferson City, MO 65102