Insurance FAQ

Coverage
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What is a “claims made” insurance policy?
Most lawyers’ professional liability insurance policies, including WILMIC’s, are claims made policies. With claims made policies, coverage is only provided for claims that are first made against the lawyer/law firm and reported in writing to the insurance carrier during the policy period. In order to trigger coverage, you must report a claim or claim incident to WILMIC during the policy period when you first become aware of it.

How can I get coverage for legal work I performed in the past?
Claims made policies can provide “prior acts” coverage. With prior acts coverage, you have coverage for a claim made and reported during the policy period, for professional services rendered years ago. At the same time, most claims made policies exclude coverage for an act, error or omission leading to a claim that was reasonably foreseeable prior to the effective date of the policy. Sometimes coverage is excluded for professional services rendered before a specified date, known as a retroactive date. Circumstances – such as practicing law without insurance or affiliations with certain law firms – may preclude coverage for professional services previously rendered.

How can I continue insurance coverage when I leave private practice or retire?  What is “tail” coverage?
Lawyers who retire or leave private practice often purchase a “tail” coverage endorsement to protect their financial well being. Tail coverage extends the claims reporting period of your policy and is provided through an endorsement to your current policy. The coverage terms, conditions and liability limits of the policy remain unchanged. You can extend the claims reporting time to one, two, three, six years or for an unlimited period.

What should my firm do when a lawyer joins my firm during the policy period?
You need to complete a Supplemental Application. The application requests basic information about the lawyer joining your firm – previous firm affiliations, claim history and so on. If you request prior acts coverage for the new lawyer, you will be charged an additional pro rata premium. Some lawyers may need prior acts coverage, while others may not. Also, some lawyers may not be eligible for prior acts coverage. When a lawyers joins you firm after leaving another firm, that lawyer may want prior acts coverage even if the lawyer is currently covered under the former firm’s policy. For example, the lawyer may be apprehensive about the continuation of coverage under the former firm’s policy or may have questions about the adequacy of the former firm’s limits. Questions often arise about the size of the former firm’s deductible and who is responsible for paying the deductible.

Does my WILMIC policy cover me for work I do for clients located in other states?
Your WILMIC policy protects you for professional services you render in other states, as long as your Wisconsin office is your base of operations. The underwriting process includes a close examination of the type of work your firm renders outside Wisconsin.

Does my lawyers malpractice policy cover my activities as a member of a board of directors?
No. Virtually all lawyers’ professional liability policies exclude any claim arising out of your performance as an officer or director of a business enterprise or non-profit organization. WILMIC’s policy does cover services you provide as director or officer of a professional legal association.

Supplemental Coverage
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Abstracter and Title Insurance Agent
Lawyers who act as abstracters or title insurance agents in the course of providing legal services may wish to add this coverage by endorsement. The endorsement defines an abstracter as someone who prepares a summary of the recorded events that affect title to real property, including memoranda, certificates issued in lieu of abstracts, notes and references to chains of title, name searches, and tax and assessment searches.

A title insurance agent refers to a person who acts as an authorized agent for a title insurance company. The title insurance agent must be a licensed agent in good standing with the Office of the Commissioner of Insurance of Wisconsin. There is no additional premium for this supplemental coverage. Please download an application form for Abstracter and Title Insurance Coverage or contact WILMIC.

Securities
WILMIC’s policy excludes insurance coverage for securities work. This coverage can be added by removing the policy exclusions pertaining to securities work. An additional premium is due for securities coverage. Please download an application from for SEC Coverage or contact WILMIC.

Defendant’s Reimbursement Coverage
If a professional liability claim made against you develops into a lawsuit, you may be required to attend a trial or a mediation or arbitration hearing. Defendant’s Reimbursement Coverage repays your necessary expenses and loss of time up to $250 per day. This coverage includes a maximum of up to $5,000 per lawsuit for each lawyer whose attendance is required. The annual premium for this additional coverage is $30 per lawyer.

Grievance Counsel Coverage
For no additional premium, your policy includes a limited coverage benefit for legal representation in grievance proceedings. The policy reimburses the firm up to $5,000 per policy period for reasonable fees for legal services charged by a lawyer (other than any lawyer insured under your policy) to defend you regarding a grievance. The grievance must allege professional misconduct in performing professional services for others. This benefit does not extend to legal fees or expenses that involve client fee disputes or grievances resulting from a lawyer’s intentional, dishonest, fraudulent, criminal or malicious acts. Payments made do not reduce the policy limit of liability. No deductible applies to this coverage.
See also: Supplemental Reporting Form – Grievance, Claim or Potential Claim

Limits of Liability
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How can I determine if the liability limits I’ve chosen are adequate?
There are a number of factors to consider when selecting liability limits for your policy:

  • The value of the work you perform for your clients.
  • If something went wrong, for how much could you be held liable?
  • The net worth you and your firm need to protect

Are the costs of defending a claim included within my limits of liability?
Yes. This is a standard provision in professional liability insurance policies. When a covered claim is filed – regardless of whether it has merit or not – WILMIC will pay legal fees, investigation costs and, when appropriate, adjustment expenses necessary to resolve the claim. These claim expenses are subtracted from your per claim limit of liability. Consequently, this reduces the amount of money available to pay damages for that claim and decreases the aggregate limit on your policy.

What’s the difference between a combined, single limit of liability and split limits?
Combined, single limit (for example, $250,000/$250,000) policies provide one single limit of coverage for one claim – or several claims – in a policy year. Thus, if one lawyer in a firm of two or more lawyers had a claim that depleted the single limit, there would be no coverage available to the other lawyers if other claims were made during that policy period.
With a split liability limit (for example, $250,000/$750,000), there is a coverage limit of $250,000 available for one claim and an additional $500,000 available for other claims that occur during that policy period.

Premium
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How is premium for my firm calculated?
When your firm’s premium is calculated, a number of factors are examined. Premium rates are determined by WILMIC’s management, with advice from a consulting actuary, and approved by WILMIC’s Board of Directors. Adjustments are base on:

  • Liability limits
  • Deductible
  • Firm size
  • Areas of practice
  • Claims history
  • Years in practice
  • Full or part-time
  • Years insured with WILMIC
  • WILMIC CLE credits

How does a firm’s areas of practice affect premium?
The claims incurred by lawyers, both in terms of frequency and severity, suggest that certain areas of practice are susceptible to claims. For example, bodily injury/personal injury plaintiff work, real estate, and corporate/business work are three areas with significant claims activity. As a result, higher premiums can be anticipated for firms with extensive work in these areas. This may be the case, even if a firm has no claims.

How does my firm’s claims history affect premium?
At WILMIC, there is close coordination and communication between claims and underwriting personnel. If you have a claim, a number of factors are considered, including the circumstances leading to the claim, merits of the claim, damages reserved/paid, and cooperation. Also, does the claim have merit or is it frivolous? In addition, the amount of defense and/or indemnity costs are weighed. The firm’s cooperation in resolving the claim is also considered.

Does WILMIC offer premium credit for CLE?
Yes. By attending WILMIC sponsored continuing legal education seminars, you can receive credit on your next premium quotation – our way of recognizing your participation in loss prevention. Your premium credit is based on ranges of CLE credits earned by each individual lawyer in your firm. For example, each lawyer who attends one of our 3.0 credit CLE seminars will receive a 2 percent credit on that lawyer’s premium.

The more WILMIC CLE credits the lawyers in your firm earn, the more premium credits your firm will receive – up to 10 percent of each lawyer’s premium.

The premium credits accumulate on a rolling three-year basis. Lawyers who are not insured by WILMIC at the time of the seminar will qualify for the premium credit if they obtain WILMIC insurance with an inception date within 12 months from the date of the seminar. If a lawyer moves to a different firm during the three years following the seminar, the credits that lawyer earned will be applied to the new firm’s premium.

How else can my firm earn premium credit?
By choosing WILMIC as your professional liability insurer! Wisconsin Lawyers Mutual Insurance Company offers a continuity credit to policyholders who remain insured with the company. The more years your firm is insured, the greater the credit.