Bar News - August 15, 2003
Tips for Containing Insurance Costs
THE FOLLOWING IS an excerpt of tips from Partner's Report, a newsletter for law firm owners published by the Institute of Management & Administration:
- Start the renewal process early.
- Spend time on the application; be complete and honest about the claims filed against the firm (and what's been done to ensure these types of claims won't continue) and about the activities of the firm.
- Know the market so you aren't surprised by what the rate increases are;
- Work with an agent who knows the business and specializes in legal professional liability insurance.
- Look at the big picture - focus not just on price, but also on how the carrier handles claims. For example, does it allow input on defense counsel?
- Evaluate limits and deductibles. "A good rule of thumb for a deductible in a hard market is around $2,500 per lawyer," according to Brian Ahern, an insurance consultant.
- Educate yourself on risk management steps.
- Take precautions with mergers and hires. Review the claims history of anyone or any firm with which you are considering an affiliation. How will your carrier view new practice areas?
- Don't sue for fees.
- Be vigilant when screening clients.
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