James Kerr, head of professional indemnity at Travelers, introduces the Avoiding claims. Insurance section. (Updated 12 January 2021)
Mistakes happen, in law firms like anywhere else. Work piles up. Deadlines arrive. Issues are complex. Key risks get overlooked. But in the legal sector, the cost of such mistakes can be enormous, so professional indemnity insurance is a major expense and avoiding claims is a key objective.
This section opens with a set of 98 FAQs, in two parts: Professional indemnity insurance for law firms FAQs: Part one and Professional indemnity insurance for law firms FAQs:Part two. These FAQs explain how much insurance you need, how to keep your costs down, how to avoid pitfalls when seeking cover, how to make a claim, plus closing down and other special situations.
Next is a helpful set of articles on how to avoid negligence claims, the team at Travelers reveal the most common areas of risk to watch out for. The advice is brought to life by all the real-life examples they have included. Most importantly, they suggest ways to organise your work to minimise the risk – and the stress – that is part and parcel of all legal work.
Residential conveyancing generates more negligence claims, at more cost, than any other work area.
Commercial conveyancing comes second, with leases and assignments being particular problem areas.
Company and commercial ranks third in terms of the value of the claims, although only sixth in the Travelers data showing volumes of claims. When contracts fail to protect a client the financial damage can be extensive.
Wills, trusts and probate work ranks fourth in terms of value and third in volume. Tax errors can be expensive.
Commercial litigation ranks fifth in value and fourth in volume. Errors and omissions occur during the day-to-day legal work.
A long item called 'Covid-19 and operational risk' is a useful holistic view of risk in a law firm.
Lastly, we are creating a set of ten-minute podcasts on our new YouTube channel. The first three are Risks for lawyers podcast introduction, Advice risk in legal service delivery and Dishonesty risk in legal service delivery.