Professionally Insured…To Be or Not to Be
by V. Lowry Snow
You will recall that the re-licensing process this year included questions regarding Bar member professional malpractice insurance coverage. We appreciate your participation. The purpose for gathering the information was to determine the extent to which professional malpractice coverage is being utilized by our members and to provide a basis for improving the Bar’s effort to facilitate the availability and promote the affordability of coverage. The survey information has been gathered, analyzed, and summarized. The results contain a mix of good news along with some news that could be better. On the positive side, we found that approximately 74% of active lawyers involved in representing private clients (i.e., not government or in-house counsel), carry malpractice coverage. I believe the overall percentage of coverage is better than many had predicted. Firms of 11 lawyers or more enjoy the highest percentage of coverage at nearly 99%. Conversely, the group comprising solo practitioners had the lowest percentage, with only 38% having coverage. Approximately 82% of firms with 2–10 lawyers reported being insured. It is interesting to note the regional differentiation across the State, with the highest percentages of coverage being in the Third Judicial District at almost 80% and the more rural Sixth and Eighth Districts at 38% and 43% respectively. The most widely reported reason for not having insurance coverage was that it was “too expensive,” at 51%. The full results of the survey are posted on the Bar’s web page at www.utahbar.org.
Notwithstanding the familiar quote attributed to Mark Twain regarding statistics and lies, I believe the data obtained through the survey provide some valuable information about where the Bar can focus assistance for lawyers on issues by providing better insurance information and support, particularly for those in solo practice or smaller firms. While I cannot make the following statement based on any hard data I’ve seen, it would seem to me that the group of lawyers most at risk for a claim are those who practice alone or without the support resources of a larger firm. I would hope that the providers of malpractice insurance doing business in the State will take note of these statistics and consider additional ways to disseminate information to our members, including the establishment of payment plans that would make premiums more attainable for solo lawyers and small firms. To the solo practitioners and the small firms, I would encourage them to actively pursue obtaining competitive premium quotes from several different companies offering coverage and make specific inquires about premium payment options. I think they may find that coverage is more affordable than previously believed. The Bar is in the process of reviewing other means for making information more accessible regarding coverage and carriers so that all lawyers are afforded at least the opportunity to obtain coverage at competitive rates.
The issue of whether or not to carry malpractice insurance is one that must be assessed and determined by each individual lawyer or firm. Many of us know that, in most cases, insurance represents an investment without a return – unless, of course, the event insured against comes to pass. We pay hundreds of dollars each year for insurance protection against catastrophic events that never occur – but we recognize the inherent value of insurance when we analyze how the actual occurrences of such an event could disrupt our personal lives as well as our businesses without the economic relief afforded by coverage. For lawyers with very busy practices, the time required to defend a malpractice claim can severely hamper their practice in ways not imagined, even when represented by very able counsel paid for by the insurance carrier. This is true even when the claims have no merit. Add to this the financial burden of paying your own way for legal defense costs and any ultimate settlement or award and the total experience could be financially devastating without coverage. To those currently uninsured and weighing the decision of whether or not to obtain coverage, consider this question: If you were the lawyer advising a client who intended to actively practice in a profession that is highly susceptible to negligence claims, what advice would you give them concerning the advisability of obtaining professional liability insurance? Perhaps it is a good time to evaluate your own situation and take some good advice from the same source from which you impart good counsel to others.