The Missouri Department of Insurance, Financial Institutions & Professional Registration 2008 Legal Malpractice Insurance Report
The Missouri Department of Insurance, Financial Institutions & Professional Registration just released a terrific summary of legal malpractice insurance experience in their state from 1999 to 2008 (2008 Legal Malpractice Report - http://www.insurance.mo.gov/
Data Categories
This report contains illustrations of indemnity amounts categorized by claim characteristics, including:
1.Area of Law
2.Principal Activity that lead to alleged error or omission
3.Alleged Error or Omission that gave rise to the claim
4.Legal Disposition of the claim at closing date
5.Years In Practice of insured at the time of the alleged error or omission
6.Relationship of Insured to Claimant
Each of the report areas will have particular interest for practicing attorneys in their respective discipline, but the following general observations are particularly interesting:
1.Average annual premium has remained relatively constant for ten (10) years
2.Average loss ratio has been 34% over ten (10) years, including three years with losses in excess of 70%
3.Claim count has remained relatively stable over ten (10) years at roughly 25o per year
4.The largest proportion of all claims closed in 2008 and in the past ten (10) years involved the alleged errors or omissions that occurred during the commencement of legal action or proceeding.
5.Ninety-two percent of losses in 2008 occurred among attorneys with more than ten (10) years of practice.
6.Eighty-five percent of 2008 claims involved other than free legal service or member of pre-paid legal plan.
On the face of it, the report dispels some common assumptions about experience and client relationships being less risky than others. This deserves more attention. Unfortunately, the report does not show any maximum loss or adjustment information - with a data pool this small, a handful of claims could actually skew the information upwards - the mean data would be very interesting for many of the illustrations in lieu of the average.
Know Yourself and Know Your Peers
The Missouri Department of Insurance, Financial Institutions & Professional Registration should be applauded for this terrific report and each of us should encourage transparency like this from other state governments and insurers. Information such as this is helps us all. I encourage you to get a copy of the report and assess how it affects you and your firm.
For more information about legal malpractice insurance for attorneys and steps you can take to improve your coverage and minimize your cost, contact Bill Yates or Cary White at Presidio Point Insurance Services or look at our website at http://www.legalmalpracticeinsuranceservices.com. You may also contact us toll free at 1-800-355-1204.
