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Professional Liability Insurance—
A Package Deal for Solicitors
No matter how diligent he may be, no Solicitor can
be certain of avoiding errors or ommissions. Moreover,
the more numerous his staff, the more scope there is for
such lapses. In fact, claims do arise in every size and
kind of practice and while supervision will minimise the
risk it will not eliminate it. Both prinicipals and staff,
being human, can and do make mistakes. Small firms
have as great a proportion of risks as large ones, but
they are less able to bear the costs should a claim arise.
Bearing in mind all the factors involved, it is quite
obvious that every Solicitor in Practice should effect
insurance cover against claims which might arise out
of his professional work.
A Frequent Cause of Claims
Although a solicitor is not expected to know all the
law he is bound to know the Statutes of Limitation and
he must ensure that any right his client may have does
not become statute barred. Recent research clearly in-
dicates that it is in this area that almost half of all claims
against solicitors in practice in the Republic arise.
Combined Liabilities
A Combined Liabilities Policy designed especially
for members of the Incorporated Law Society of Ire-
land has been available since April 1970. Representing,
as it does, an entirely new concept in insurance coverage
for Solicitors, it is not surprising that already about half
of all member firms in the country have taken it up
and every week sees new members coming in. Although
it includes many novel features, the aim has been to
provide maximum cost with the emphasis on security
and stability. In fact, the ideas incorporated in the
scheme derive from research carried out in recent years
in compliance with the wishes of the Council of the
Incorporated Law Society of Ireland.
A Package Deal
Due to the current market practice of charging a
minimum premium per Policy it can be unnecessarily
expensive for a Solicitor if he arranges separate covers
for Employers' Liability, Public Liability, Personal Lia-
bility and Professional Liability, apart from the extra
trouble ind anconvenience of having to deal with separ-
ate renewals. The whole principle of the package deal is
that one does not bother to insure special needs on
different Policies but chooses the collection that most
nearly covers one's needs at a lower overall cost and
much less trouble. Therefore, the problem of finding a
suitable package has now been solved for the Society's
members.
Stability and Continuity
Special safeguards have been built into this new Policy
to
protect those who support the Scheme. For instance,
there is no condition which allows the Insurers to can-
cel the Policy during its currency and in the event of
their wishing to do so at renewal, or to amend their
terms of conditions at that time, they are bound by a
Policy Condition to give the Insured three months
notice. Furthermore, in the event of non-renewal by
Insurers a Discovery Period of from three to twelve
months following expiry is allowed. During this Dis-
covery Period any professional liability claims made by
Third Parties against the Insured in respect of any
occurrence or omission which took place or was alleged
to have taken place during the currency of the Policy
or before, shall, for the purpose of the insurance, be
deemed to have been made during the currency thereof.
Again, the Policy provides that the Insured shall give
immediate written notice of any circumstances of which
they shall become aware during the currency of the
Policy (or during the Discovery Period if applicable)
which is likely to give rise to a claim against them;
such notice having been given, any resultant claim which
may be made after the expiration of the Period of In-
surance shall, for the purpose of the Policy, be treated
as a claim made during the currency thereof.
Amount of Indemnity
Under the Employers' Liability Section of the Policy
the indemnity is unlimited in amount as is customary.
Under the Public and Personal Liability Sections the
limit is £100,000 in respect of any one occurrence there
being no limit in any one period of insurance. Although
not always appreciated or adverted to, the practice under
Professional Indemnity Policies is to have the limit of
the amount of indemnity applicable not merely to any
one claim but to all claims, in the aggregate, in any
one period of insurance — normally twelve months.
Therefore, unlike many forms of legal liability cover,
the sum insured, in respect of any one claim, must also
be sufficient to meet the total of all claims in any one
period of insurance. Accordingly, a limit of indemnity
of £100,000 is suggested as a minimum but alternative
limits of £50,000, £25,000 and £10,000 may be availed
of if it is considered prudent to do so.
Inclusive Premium
A quotation is subject to completed Proposal Form
and the inclusive premium charged is normally de-
pendent on two factors only—the amount of the indem-
nity under the Professional Indemnity Section of the
Policy, and the number of personnel (principals and
staff) engaged in the Practice. The premium based on
these two factors represents the total premium cost of
all Sections of the Policy. Furthermore, the customary
additional premiums required to include liability in
respect of Libel/Slander, Dishonesty of Employees and
Loss of Documents have been waived and these risks
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