The Gazette 1971

Professional Liability Insurance— A Package Deal for Solicitors

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

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,

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