Excess coverage: Do or did I handle matters which potentially exposed me to a claim
The following are some of the questions you may want to ask yourself to help assess whether or not you should secure additional insurance coverage limits.
When reviewing these questions and assessing your exposure, remember to factor in both potential defence costs and interest payments, as well as actual damages. Depending on how long it takes to discover an error and resolve the claim, and the impact of costs, the value of the claim could be inflated by 50 to 100 per cent, or more.
Consider the law practices of others, including those of your associates, co-tenants, and others with whom you may share space or resources. Also consider subcontracted or supervisory counsel, any previous or co-counsel on files, ‘of counsel’ and backup counsel for your practice, as well as those who are or have been otherwise affiliated with your practice or services.
- Did I or those in my present or former firms handle major financial transactions? Will I be involved in these types of transactions in the future? Consider for example, securities dealings, commercial business, international transactions, pension dealings, corporate litigation, tax advice, intellectual property services, and class action suits.
- Did I or those in my present or former firms represent clients where the stakes were significant? Consider for example, pension work, patents and trademarks, environmental-related services, or class action suits.
- Have I or those in my firm or former firms represented clients who are more apt to bring claims? Consider changes in client ownership or management, as well as the jurisdiction in which the client or its parent is likely to bring a claim.
- Have my individual and corporate clients grown in wealth? Do I know the extent of my clients’ reliance on my past advice? Have the stakes continued to grow? Consider the drafting of prenuptial agreements and wills, as well as advice and services for start-up companies, ‘dot-com’ clients, and growing businesses.
- What limitation periods are likely to apply to such claims? How long will I continue to be exposed?