Protecting Law Firm Partners’ Assets
Professional indemnity insurance provides protection for law firms against claims arising from alleged negligence or breach of duty in the delivery of their professional legal and advisory services. The frequency and severity of these allegations continue to rise, as does the expense associated with defending the matters. These escalating costs lead us to ask the question: Do law firms have sufficient levels of Professional Indemnity Insurance in place?
In the event of a catastrophic loss, a law firm’s professional indemnity insurance policy could prove insufficient. Once the professional indemnity tower is exhausted by the loss, the law firm and its partners are responsible for the remaining balance which could cost millions and potentially lead to the firms’ insolvency. Many firms purchase additional layers of professional indemnity cover; however, if the claim payment exceeds total coverage limits, the firm and partners’ assets may be at risk.
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