By Gretchen Mote, Ohio Bar Liability Insurance Company
The short answer to this question is that it depends on what the insurance carrier offers. Insurance carriers may offer several options:
The full-time attorney policy covers claims made arising out of acts, errors or omissions of the insured lawyer in rendering or failing to render professional services in the lawyer’s capacity as a lawyer or notary public.
The part-time attorney policy covers claims made arising out of acts, errors or omissions of the insured lawyer in rendering or failing to render professional services in the lawyer’s capacity as a part-time lawyer or notary public. Part-time is defined by the insurance company.
The employed lawyer policy covers claims made arising out of acts, errors or omissions of the insured lawyer in rendering or failing to render professional services in the lawyer’s capacity as an employed lawyer for or on behalf of the employer (eg. in-house, corporate, or government positions, but not a law firm). Usually claims brought by the employer against the insured lawyer are not covered under this policy (due to moral hazard).
You may also want to consider whether coverage has a “burning limits,” that is, where the limits of coverage are reduced by defense costs incurred in defending the claim.
Outside limits: Your policy provides coverage for defense costs, whereby such costs do not reduce the available limits of liability to pay money damages.
Inside limits: Provides a less expensive premium but also reduces protection. This policy provides coverage where the limits of liability are available to satisfy both money damages and defense costs, inclusively. Any defense costs incurred reduce the limits available to pay money damages.
These options, as well as the limits, deductible and any applicable discounts, should be discussed with the underwriter for your policy.
Insurance coverage or disclosure of non-coverage is required by Rule 1.4 of the Ohio Rules of Professional Conduct and Rule III, Section 4 of the Rules for the Government of the Bar of Ohio. In addition to these requirements, when selecting your policy’s limits of liability, you should consider factors such as the dollar value of the client matters handled by each attorney to be covered, whether the sums paid for defense costs and fees will reduce the sums available for any indemnity payment, (ie., a “burning limits” policy. See inside limits, supra.), and the amount of business risk the firm and its attorneys wish to take (i.e. limits vs. assets vs. risk exposure).
Carefully consider not only the amount of the deductible, but whether it will apply per claim or per policy period. You should retain the amount of the deductible in an account (not your trust account!) or be able to obtain it from a credit card advance.
The services and discounts of each carrier should also be discussed. There may be discounts for “claims free” time periods, Bar College membership, additional CLE obtained or specialization. In short, you should be sure you are really comparing coverage “apples to apples” and not just purchasing the least expensive policy.
If you have any questions about this, please feel free to contact Gretchen Mote, OBLIC Director of Loss Prevention, at 614-572-0620 or firstname.lastname@example.org.