Professional malpractice insurance for attorneys reduces occupational risks and stresses caused by the ever-present shadow of malpractice suits to an extent. This ‘extent' is defined by the insurer's policy. This is the reason why attorneys need to focus on the small print and different policies regarding professional malpractice insurance, and attorneys need to understand all potential implications of each policy guaranteeing coverage.
The common components of a professional malpractice insurance contract
Though there are many different insurers providing malpractice insurance coverage and each insurer has a number of different policies. Further, most professional malpractice insurance contracts have a number of common components. These include: the application, the declaration sheet, the insurance policy, and the endorsements. Again the main insurance policy itself can be broken down into the following common components: Definitions, Coverage Agreements, Exclusions, Defense and Settlement Provisions, Limits of Liability, and Conditions. To properly understand the implications, advantages and disadvantages of professional malpractice insurance policies, an attorney needs to understand each of these components thoroughly in any given policy, before committing to one policy.
Some tips to follow regarding a professional malpractice insurance contract
- Be truthful: do not withhold any relevant information in the “application” part of the contract and do not leave any fields blank.
- In trying to be truthful, do not articulate responses in a manner that urge the underwriter to decline the contract. If there are high-risk activities in your line of practice focus on the commonality of these risks, so that the underwriter can reasonably grant coverage.
- Disclose all past claims, circumstances, mitigating factors, and remedies obtained. Clearly show your awareness of the existence of risks and the steps you normally take to reduce or eliminate these risks.
- Thoroughly comprehend the different parts of the insurance policy including definitions, coverage agreements, exclusions, defense and settlement provisions, limits of liability and other terms and conditions.
- Read and re-read the “exclusions” part to understand the full contractual implications.
- Also, thoroughly read the specific limits of liabilities spelt out in the insurance contract.
- Do not miss the “conditions” section because providers include activities that the insured party needs to undertake in order to claim insurance.
Be very sure of the clauses in the insurance contract
While an insurance company is proposing coverage, the insurer is actually making nothing more than “an offer” to cover you, and most of the clauses in an insurance contract are intended to advertise that offer to make the sale, and provide “actual coverage” for the insurer. Thus, those clauses are intended to protect the interests of the insurer more than the interests of the insured – which is natural, because professional malpractice is an attorney's occupational risk and insurers make a business out of that ever-present risk.
Your best insurance against a professional malpractice suit is to be careful and aware about rules of professional misconduct and not engage in any action that may put you at risk. However, insurance contracts are essentially contracts of adhesion, so in any dispute between an insurer and the insured, conventionally the insured receives the benefit of doubt.
