Click here to complete our contact form, or call 866-759-0102. If I cannot take your call, you can leave a private voicemail, and I will get back to you as soon as possible. I look forward to speaking with you soon.

Bruce R. Swicker

The Downsize Dynamic

By Bruce R. Swicker

The "downsize dynamic" occurs when a firm is established by attorneys who come from a much larger firm. The members of the new firm are not used to dealing with administrative issues, since large firms maintain support staffs devoted to these duties. It may be the seeming mundane nature of these tasks that cause attorneys to overlook their importance.

Attorneys sometimes avoid anything that gets in the way of practicing law, including bothersome issues like insurance. We've seen many such situations, including highly skilled and respected attorneys practicing for months without any insurance in place, simply because no one takes the time to make these important decisions.

We had one firm for whom we provided a comprehensive proposal, including professional liability, an office policy, workers’ compensation, etc. Despite repeated follow-ups, we simply could not get any of the partners to say “Yes.” Six months later, the firm received a letter from the workers’ compensation board, fining them several hundred dollars because payroll was being reported, but no work comp coverage was in place. This fine was the final catalyst that forced the attorneys to take the issue seriously. They accepted our proposal the next day.
Don’t wait for a fine! Let ELA help you with your risk management planning.

Latest updates; random thoughts . . .

AUGUST, 2010

What’s up in New York State? Is there something in the water? Why are so many insurance companies so anxious to write New York lawyers professional liability (“LPL”) insurance? No kidding, just this year – so far – about a half dozen carriers have either entered the New York market, or have filings awaiting approval by the NYS Insurance Dept.

To my knowledge, only a single, small, non-admitted carrier has withdrawn a program from the state, though that same carrier is in the process of acquiring another, licensed and admitted carrier which have an active LPL program.

In fairness, I should also point out that a couple of major insurers have instituted significant rate increases, which can only indicate that they have not found New York to be terribly profitable. Of course, there is an old saying in the insurance industry, “There’s no such thing as a bad risk; only insufficient premium!” One of these national carriers has been underpriced for years, and while this makes it easy to grow top-line revenues, it inevitably leads to bottom-line losses.

So, back to my original question: What is it about New York State that makes it appear to be the Holy Grail for legal malpractice insurers? True, there are a lot of attorneys throughout the state, which means that there are plenty of opportunities to write business. However, I am not aware that the overall number of attorneys is growing, so each opportunity to write new business means that it is probably taking that business away from another insurer. Also, while New York’s litigation environment for legal malpractice defendants is far better than, say, New Jersey, it’s no cakewalk.

Of course, the law of supply-and-demand inevitably means that with all of the market capacity competing for business, obtaining adequate pricing becomes a key issue. Indeed, it is tempting for insureds to look only at pricing, but the reality for any knowledgeable insurance buyer is that market stability is important. It is not in anyone’s benefit over the long term to have carriers come into any market, underprice a risk that they may not entirely understand, and then run-for-the-doors when the losses roll in.

The key challenge for insurance brokers – particularly those who specialize in placing legal malpractice insurance, as we do at Earhart Leigh Associates – is to assist our clients in navigating the tricky waters of a crowded market. This means doubling our efforts to stay on top of market developments, monitoring rumors (some of which turn out to be true), evaluating policy forms, and maintaining on ongoing dialogue with underwriters. This is, after all, how we demonstrate to our clients the true, long-term value of working with a specialty insurance broker!

If you have thoughts or comments, please let me know, bswicker@earhartleigh.com.

Terms | Privacy | Web Site Design by Lookit™ Design