Episode 5: What’s your speed? 3 new policies to fit your needs.

ALPS is rolling out three new policy forms this year, offering legal malpractice insurance coverage options to fit your firm's needs. No one is more excited it seems to talk policy features than our General Counsel, Brad Dantic. Listen as Brad and Mark Bassingthwaighte share a lively discussion about the ALPS Basic, Preferred and Premier policies and learn how these coverage options can benefit you.

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript:

MARK:

Welcome to another episode of ALPS In Brief. This is Mark [Bassingthwaighte 00:00:06] and I’m the Risk Manager with ALPS. We’re recording here in the historic Florence building in beautiful Missoula, Montana.

Today, I have the guest Brad [Dantic 00:00:14]. Brad is the Vice President and General Counsel of ALPS. Brad, I was thinking the purpose of getting together, is talking about some exciting changes here at ALPS. I admit, as insurance guys, not everybody would view this as the most exciting topic. But, there some really important, significant changes coming.

Over the years, ALPS has really had, in terms of the legal malpractice policies, we’ve had two policies. What we have referred to as our standard policy and our enhanced policy. This is changing now. Can you kind of just set out the basic groundwork of what has happened and where we’re going?

BRAD:

Sure, absolutely. Thanks for having me, Mark. ALPS, we’ve kind of been a niche specialists. Lawyers, professional liability for 30 years. We’re endorsed by more state bar associations than any carrier.

So we listen to the legal profession, we listen closely to lawyers, we listen to what they need and what they want. What we’ve realized is that our products could be better tailored to meet the varying needs of different types of law practices.

For example, Sole Practitioner might need a different type of insurance coverage than a law firm.

MARK:

Well of course. Yeah, right.

BRAD:

A 20 member law firm.

MARK:

Right, makes sense.

BRAD:

So what we’ve done, is we’ve created three policy forms rather than two.

MARK:

Okay.

BRAD:

We have the Premier product, our ALPS Premier product, which is the most expansive insurance coverage. It might be what I would characterize as industry leading edge. I don’t think anybody in the industry is offering a product as comprehensive and as solid as the ALPS Premier policy.

Our second policy, is the ALPS Preferred Policy is comparable to what our standard policy used to be like, but with some enhanced features. Finally, we also offer the ALPS Basic Policy. I would characterize the ALPS Basic Policy as a policy that provides the most essential level of coverage. If you needed insurance coverage, it is the beginning of insurance coverage for a lawyer.

MARK:

I can see if somebody … I think back in the day, when I hung up the shingle.

BRAD:

Shingle.

MARK:

Shingle right after law school … Money is tight. I can appreciate some coverage is better than no coverage. I think that’s really where this policy comes into play. It’s the starter policy, perhaps, might be the way to describe it.

BRAD:

Absolutely. What we’ve learned in working with State Bar Associations and the American Bar Association, we’ve learned that there are a significant percentage of lawyers that are practicing law without insurance.

MARK:

Good point. Yeah, absolutely.

BRAD:

As State Bars begin to look at uninsured lawyers, they’re coming to the realization that perhaps it’s important that lawyers maintain at least a basic level of insurance coverage.

For those lawyers that are practicing law uninsured, this might be their first and most affordable option for getting entry into the Lawyer Professional Liability Insurance.

MARK:

It certainly fits a very real, legitimate need. Can we talk a little bit about the Preferred Policy? Can you just fill me in, then, on what we’re doing with it?

You’ve compared it to our historical standard policy, but we’ve got some enhancements, these kind of things. What do I get with this policy? Where am I going with it, if I’m looking at this?

BRAD:

Sure, sure. Again, the ALPS Preferred Policy, it’s our middle of the road policy.

MARK:

Yes, right.

BRAD:

The Preferred Policy is like our Standard Policy, as you mentioned, and here’s what it provides. In any Lawyers Professional Liability Policy, and this has always been the case for ALPS in our 30 years of existence, it is important to look to determine whether or not a claim expense allowances are provided under the policy.

MARK:

Okay.

BRAD:

So when an insurance company undertakes to represent our insured and to defend a claim against our insured, it’s important for the insured to understand are those defense costs being incurred and eroding the limit of liability available to pay damages? Or are they being incurred outside the limit of liability?

ALPS has always provided claim expense allowance, which makes us unique in the industry and perhaps one of the reasons why we’re endorsed by more State Bar Associations. Under the Preferred Policy, we offer up to $500,000.00 in defense costs outside the limit of liability.

MARK:

Now that’s nothing to sneeze at. That’s a nice sum, yeah. Fantastic.

BRAD:

Yeah. In most instances, we can undertake, settle, resolve, defend a claim easily with the $500,000.00 in claim expenses, in most cases.

MARK:

Okay.

BRAD:

We also offer a disciplinary benefit, well I’ll call it a disciplinary benefit. If the lawyer becomes subject to a disciplinary proceeding, say before a State Bar Association, the preferred policy provides coverage of up to $25,000.00 per attorney.

MARK:

Wow.

BRAD:

If you’re in a law firm, multi-attorney law firm, we provide up to $75,000.00 for the entire policy period. Irrespective of the number of attorneys.

But perhaps the most significant change that I think ALPS may have made in the course of moving into these new policy forms, is we now have moved to a pure consent to settle clause.

Under the Preferred Policy and you’ll find it in the Premier Policy as well, ALPS will not settle a claim without the consent of our insured.

MARK:

Now that’s gotta be somewhat unique in the market.

BRAD:

It is unique in the market. We do see some carriers that provide it. ALPS decided we are going to continue to be industry leading, so we went to a pure consent to settle clause.

MARK:

Yeah, very good. Very good.

BRAD:

A couple other unique features that I really like about our Preferred Policy, is our extended reporting period options. So, if you’re somewhat familiar with what … The Lawyers Professional Liability Insurance industry generally operates on a claims made and reported basis.

So we provide coverage for claims that are first made and first reported to us during the policy period. Irrespective of when the act, error, or omission occurred in the professional services. But when your policy ends, you no longer … If the policy simply ended, you’d no longer have the ability to report claims.

MARK:

Claims don’t come up immediately in our line of work.

BRAD:

Exactly.

MARK:

It’s a [inaudible 00:06:56].

BRAD:

It’s important to be able to continue to be able to report claims once your policy has expired, so we refer to that as tail coverage. Or extended reporting period coverage.

Again, I think our ALPS Preferred Policy, offers some of the most expansive, extended reporting period options in the industry. If you have been insured with ALPS for at least five years as a Sole Practitioner, we provide a free ERP.

If you have been insured in a law firm, you’re not a Sole Practitioner but you’re in a law firm, and you are retiring from the practice of law, we call this feature … You get a free ERP if you’ve been with us for five years, we call it, piece of mind piece of paper.

MARK:

I love this one.

BRAD:

You want to know that irrespective of whether your old law firm, from where you’ve recently retired, you don’t have to worry about them continuing to buy insurance.

You can buy from ALPS at the time you retire. You’re entitled to a free ERP, if you’ve been with us at least five years. We also offer free ERPs upon death, upon disability, and I’m unaware of any carrier in the industry offering a free ERP if you’re called to active military service. We provide a free ERP in that instance as well.

MARK:

Now that one is awesome. I’m just … Wow. Wow. Okay. Great stuff.

BRAD:

That’s kind of a run through of the Preferred Policy.

MARK:

Right. So let’s take us in to the Premier, then. I guess I would describe this as the Cadillac Policy of our series here. What am I getting with the enhancements here? Where are we going with this one?

BRAD:

I don’t look at it as the Cadillac Policy, I look at it as the Lamborghini.

MARK:

Oh, okay. I’m loving it, I’m loving it.

BRAD:

The Premier Policy is really what it is. I don’t believe there is a policy out in the industry today that provides the protections and the benefits that’s available under the Premier Policy.

For example, under the Premier Policy, you can receive claims defenses. That claims expense allowance.

MARK:

Right, that we were talking about.

BRAD:

Up to one million dollars. So, we can actually undertake defense and occurred offense costs up to a million dollars.

MARK:

Now that’s some serious coin.

BRAD:

Before the limit of liability begins, the defense costs, begin to apply to the limit of liability. We also look to our insured firm. They have the opportunity to weigh in on the appointment of counsel.

MARK:

Oh, okay.

BRAD:

So they get to participate, we have panels of lawyers that defend claims around the country. But, under your Premier Policy, we’ll always consult you as to which firm you’d like.

MARK:

Yeah, so you have a little more control here, a little say.

BRAD:

Mm-hmm (affirmative).

MARK:

Yeah, okay.

BRAD:

The disciplinary proceeding benefit, under the Preferred it’s $25,000 per attorney, $75,000 aggregate. Under the disciplinary benefit on the Premier, it moves to $50,000 per attorney, $150,000.00 per firm.

Then, I think one of the most significant features of the Premier Policy. Any lawyer buying insurance in the marketplace today, needs to understand, what is the definition of Professional Services. What types of services or activities that you can engage in, what is covered under that policy.

The Premier Policy provides the most expansive description of Professional Services. We include within the definition of Professional Services, for example, if you’re serving as an expert witness.

MARK:

Yes, okay.

BRAD:

You’re covered. If you are serving as a speaker or an author of legal research, or a presenter at a seminar, there is coverage within the definition of Professional Services. We cover you if you’re a government lobbyist. If you’re lobbying on behalf of clients, say before State Legislatures, we include that within the definition of Professional Services.

Really, the Premier Policy provides the most expansive coverage for the types of Professional Services and activities that are covered.

MARK:

I’m getting the Lamborghini analogy here, now.

BRAD:

Then, it has the Pure Consent to Settle clause. It has the similar, the leading industry options on extended reporting periods or tail coverage. We provide a unique feature, I’ll call it, the Reduced Deductible Feature.

Under our Premier Policy, if you settle a claim at mediation.

MARK:

Yes, okay.

BRAD:

There’s a waiver of the deductible up to a particular amount. If you engage, if it’s your customary practice to use an engagement letter that’s signed by the client … It describes the scope of services you’re going to render, it describes the billing arrangements. If you have an engagement letter and a claim arises from that engagement, you are entitled to a reduced deductible, which reduces the amount of money you ultimately have to pay.

MARK:

So we’re incentivizing risk management here, which is awesome.

BRAD:

We are, absolutely.

MARK:

Yeah, yeah.

BRAD:

Then, we provide some supplementary benefits under the Premier Policy that you would not find in our other ones. We provide subpoena assistance, for example. We’ll pay up to $50,000.00 for subpoena assistance.

So if you or your law firm receive a subpoena for the production of records, we will appoint counsel and we will pay for that counsel, up to $50,000.00 to assist you in the responding to the subpoena.

Then, of course, we have the Public Relations Benefit. If your firm were to incur what we would call a public relations event, some disastrous moment in your firm history that causes you to have to engage a Public Relations Consulting Firm. We provide some benefits for that, under the Premier Policy, as well.

I’ve talked a lot about the benefits, now you understand why I call it the Lamborghini of Lawyers Professional Liability Insurance.

MARK:

Yeah. Like I said, I think that’s an apt description. I like that a lot. I like that a lot. Are there any sort of closing thoughts that you have about this?

BRAD:

We’re really excited. We’ve already received approval of these forms in many states. Our plan is to roll it out January 1, 2018. I know the Insurance Regulators, it’s been well received by the Insurance Regulators. So we’re looking forward to offering it in the marketplace and looking forward to insure lawyers and law firms around the country.

MARK:

Brad, it’s always a pleasure. Thank you for sharing the information. If any of you, in terms of listening to us, you have any ideas of topics or things that you’d like to hear in future, please don’t hesitate in letting us know. You can reach me at mbass@alpsnet.com. Thanks for listening, folks.