Considerations in Choosing a Professional Liability Insurance Company
Professional liability insurance offers two benefits. First, a specific amount to pay a professional liability claim, and second, payment for legal representation.
These two benefits are universal in liability insurance, and too often are the only issues considered by practitioners in choosing an insurance company. There are several other aspects of insurance coverage which should be carefully considered before a final decision is made.
Coverage for representation before professional review boards. Some policies include payment for legal representation before professional review boards in conjunction with issues arising from a claim. These costs can be substantial and effective representation is vital.
Settlement provisions vary from policy to policy. Some policies require the insured to agree to a settlement while others allow settlement even when the policy holder does not consent. There are a variety of considerations of this provision. The interests of the insurance company may deviate from the interests of the insured, and settlement that minimizes the financial exposure of the insurance company may leave the practitioner adversely impacted in reputation and advancement.
The support of the practitioner’s interest when a claim is filed is a vital concern. There is a difference among companies in their recognition of the practitioner’s interests in responding to a claim. Discussion with colleagues will often reveal which companies have good or bad reputations for integrity in this area.
Policies vary in the degree to which the insured may have choice of counsel and expert witnesses. Determine whether a proposed policy limit choice or cost of counsel or expert witnesses.
The health and history of the insurance company matters. Due diligence of the financial strength of the insurance company is warranted. A review of rate increases and an examination of the ability of the company to levy other fees should be undertaken.
This is a business area for a practitioner where the investment of time and attention will reap great benefit should a claim ever be filed.