Must Read Monday Are Your Policy Limits Enough?

Must Read Monday Are Your Policy Limits Enough?

Whether your firm is considering expanding or winding down, Lawyers’ Mutual’s limits of liability which range from $100,000 per claim/$300,000 annual aggregate to $5M/$7M annual aggregate have you covered.

Why it is important to review your LPL policy limits at your next renewal

As a Lawyers’ Mutual member you will know our policies carry a per claim limit and an aggregate limit for all claims that are paid out in a given policy year.

For example, for a solo practitioner or small firm that is considering purchasing a $100,000 per incident/$300,000 in the aggregate policy, the maximum we would pay for a single claim would $100,000.

The aggregate is the total available/maximum for all claims made in a policy year. For example, if 5 claims were made during a policy year, only $300,000 total would ever be paid out by the company. Remember: All Lawyers’ Mutual policies carry a $50,000 annual Claims Expense Allowance outside of any limits purchased.

Lawyers’ Mutual allows members to review and update their limits annually at time of renewal, subject to no active “open” claims.

When evaluating the amount of policy limits that will provide you adequate protection at renewal, we recommend reviewing the particular areas of law which you practice and consider if there has been any expansion or growth of such, the current values of your clients’ cases, and the current values of your personal assets.

For example, if your primary area of practice is wills, trusts and estate planning, securities or catastrophic personal injury law, $100,000 may not be sufficient coverage.

It is important to consider the monetary value of the matters that you handle for your clients and what would it cost to make the client whole in the situation an error occurs.

Since the Lawyers’ Mutual policy, like all LPL policies, diminishes after the $50,000 Claims Expense Allowance is exhausted, you also should factor in that an appropriate limit should be enough for defense and indemnity of any claim made. If you are interested in increasing your policy limits at your next renewal, please feel free to fill out an increased limit form online or contact our Underwriting Department at (818) 565-5512.