How to Make the Right Impression When Applying for Malpractice Insurance

Learn the basics of Lawyers' Professional Liability Insurance, understand when to purchase, know what your dollars will buy and a few tips when applying for coverage! Check out the ALPS Guide to Purchasing.

Try to submit your application well in advance of any deadline. Consider adding a cover letter to your application in order to provide details about the image, reputation, and operation of your firm. In short, explain why an underwriter should feel comfortable insuring the risk your firm represents. With some carriers, this kind of information can positively impact the premium number that will be quoted.

If any claims are being reported on the application, detail the steps your firm has taken to prevent the reoccurrence of a claim similar to the one(s) you are reporting. Be straightforward and share what was learned as a result of the claim as well as why something similar shouldn’t ever happen again. To state it another way, explain why your firm is now a better risk in light of the learning that occurred as a result of the claim(s). Note, however, that a glib response such as “the problem attorney was fired post haste” or a response that indicates the firm has not accepted any responsibility for the claim are not going to be well received.

Finally, most attorneys are well aware that malpractice insurance companies respond negatively to firms that routinely sue for fees because fee suits invite malpractice counterclaims. If your firm routinely files fee suits several times a year or more, consider redesigning your billing and collection practices and explain how these new procedures will minimize the need to sue for fees going forward. If you rarely sue for fees, detail the decision-making process so that the underwriter will know how such decisions are made. This is important because there is a huge difference in risk between a firm that will sue a client every time a significant delinquency develops regardless of the reason why and one that has a process in place where the quality of work can be reviewed in files once a fee has become past due coupled with a determination of the client’s ability to pay what is owed. Suing for fees when the client has no ability to pay only invites trouble and underwriters know that.

Late, sloppy, and/or incomplete applications are all examples of situations where relevant information has been provided, albeit unintentionally, to a malpractice insurance company. This information can’t help but color an underwriter’s perceptions during the decision-making process of whether to provide a quote or impact the amount of the quoted premium. When it comes to insuring a risk, the more information an underwriter has the better the underwriter is going to be able to understand and accurately evaluate the risk. Thus, the time it takes to complete a malpractice insurance application thoroughly and diligently is going to be time well spent.