5 minute read
An update from Lawcover
from Balance 1-21
JEN McMILLAN
SOLICITOR – MANAGER, PRACTICE SUPPORT SERVICES LAWCOVER
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Since 1 July 2020, Northern Territory law practices have been covered by Lawcover Insurance Pty Ltd (Lawcover) PII policies. Those policies will be due for renewal shortly, and set out below are steps to help you navigate the renewal process.
● In April, your practice’s nominated contact person will receive an email when renewal is open.
● Complete the online application at Insurance
Login on the Lawcover website.
● Generate an instant renewal quote.
● Where an instant quote is not available,
Lawcover will contact you to help finalise your insurance arrangements.
● Once payment is received, Lawcover will email a tax invoice and your policy documents. >
If you wish to use a premium funder, premium funding is available either by arrangement with the funder of your choice, or via Lawcover’s online renewal platform.
● If you want to fund your PII premium only, you can access funding from IQumulate, Westpac or Hunter Premium Funding via the link from our online platform.
● If you want to bundle your funding for PII with your practising certificate(s), Top Up or other insurances, you will need to contact your preferred funder directly.
Do you need Top Up insurance?
The primary limit of indemnity under Lawcover’s PII policy is $2 million. If a claim is made which exceeds that amount, and the practice does not have an appropriate level of Top Up insurance (cover in excess of the primary $2 million limit), then the law practice or the partners personally face potential exposure against which they are not insured.
While most claims are able to be resolved for less than $2 million, there have been instances where much larger claims have been made against even quite small law practices.
One recent example involved a two partner law practice acting on the sale of a commercial property at a price of $28 million. The transaction proceeded uneventfully, but then the purchaser was not ready to settle on the settlement date. The vendor client gave instructions to issue a notice to complete, but the notice was defective and settlement was delayed. The vendor client was unable to rely on the defective notice to complete to terminate the contract and made a claim against the law practice, calculating the loss at more than $4 million. The law practice did not have Top Up insurance and the partners were in the unenviable position of facing a personal liability for the part of the claim that exceeded the $2 million limit.
Given the defect in the notice to complete, Lawcover recommended settling the claim and it was resolved just under the $2 million policy limit.
While that was obviously a good result, the partners of the law practice were very stressed throughout the settlement process as they stared down the possibility the claim might not settle within the insurance coverage. The solicitors did not want to go through a similar experience again and decided to buy Top Up insurance from then on.
In considering whether your law practice should take out Top Up insurance, you should consider whether the nature of the work you do carries a risk of claims exceeding $2 million. For example:
● Do you do transactional work where you are dealing in high value assets?
● Are you advising high net worth clients?
● Do you act for clients with potentially large value claims in, for example, building matters or personal injury or family provision?
Independent advice from an insurance broker or adviser may be helpful to assess your risk and the right level of cover for your law practice.
Top Up insurance provides protection for your law practice and your clients above the primary limit of $2 million—and often costs less than you might expect. If you would like a quote for cover above the $2 million limit (and up to $20 million in total) you can view the Top Up quote options provided online when renewing your PII policy, or contact the Insurance Services team on 1800 650 748 if you would like quotes for alternative limits.
Lawcover has a range of resources available to assist you in your practice. There are live online events, podcasts, and our Short Minutes video updates, as well as our eLearning resources.
A number of Northern Territory law practices have already taken up Lawcover’s invitation for principals to attend the five, live online Principals Risk Management Workshops free of charge (normally $325 per workshop, or $1,000 for all five workshops) until 30 September 2021. Workshop dates can be found here.
If all principals in your law practice complete all five workshops by 30 June 2021, you will be entitled to a discount on your premium
(click here for more details).
To register, please contact Practice Support Services on (02) 9286 8877 or via email: practicesupportservices@lawcover.com.au
Cyber cover at no cost
All law practices insured with Lawcover have the benefit of coverage under our group cyber risk insurance policy at no additional cost. You will receive up to $50,000 of emergency assistance cover in the event of a cyber incident affecting your law practice that does not fall under your professional indemnity insurance policy.
You can find out more about our cyber cover on our website here.
The demands of running a legal practice and its associated risks can sometimes seem endless, particularly for those who wish to maintain an active practice while shouldering leadership and management responsibilities.
For example, consider a scenario where an employed solicitor makes allegations against your legal practice alleging workplace discrimination regarding the allocation of work and opportunities for promotion. Or where your legal practice is investigated by the Fair Work Commission. Or where you discover that an employee has been embezzling funds. Or your practice is audited by the tax office.
Management liability insurance is an optional insurance available to assist you in responding to everyday risks associated with managing a law practice, including public liability, employment practices liability, internal crime, statutory liability, mitigation costs and tax audit costs.
To find out more click here.
practicesupportservices@lawcover.com.au www.lawcover.com.au 1800 650 748 Switch: (02) 9264 8855
