Every general liability policy includes a medical expenses section. What exactly does this section cover? As it has been established, general liability coverage is when a third-party claims you or your law firm was negligent for bodily injury or property damage and sues for those damages. General liability protects your law firm against incidents that may occur on your premises or at other covered locations where you normally conduct business. When you look at the declarations pages on your commercial general liability policy, it looks like this:
LIMITS OF INSURANCE
LIABILITY AND MEDICAL EXPENSES
MEDICAL EXPENSES – ANY ONE PERSON
PERSONAL AND ADVERTISING INJURY
DAMAGES TO PREMISES RENTED TO YOU
PRODUCTS-COMPLETED OPERATIONS AGGREGATE
Law firms often wonder what this coverage entails. Do they sometimes ask why this limit is so low in comparison to the other limits listed? “Medical expenses are costly; why only $10,000 limits here?” The answer to this question is, where liability coverage is for situations where a third-party claims your negligence for bodily injury or property damage, the medical payments coverage is an exception, as it pays medical expenses for bodily injury to third parties as a result of your operations regardless of fault.
People are less likely to sue you if they receive prompt medical payments to cover the costs of any injuries they have sustained, for which they could claim your law firm is liable. Medical Payments coverage gets them without filing a lawsuit or going to court and engaging in a lengthy claims process. This coverage also allows your insurer to pay small nuisance claims without the need for costly legal expenses.
If a liability claim and medical costs are paid, but a lawsuit still arises, general liability will still protect for a covered claim. The purpose of medical expense coverage, however, is to prevent this from happening.
Overuse injuries are one of the biggest risks law firms face in regards to workers’ compensation injuries. The following is a list of basic ergonomic tips to avoid overuse injuries:
Place the keyboard in a position that allows the forearms to be close to the horizontal and the wrists straight. That is, with the hand in line with the forearm. If this causes the elbows to be held far out from the side of the body, then re-check the work surface height.
Some people prefer to have their wrists supported on a wrist rest or the desk. Be careful not to have the wrist extended or bent in an up position.
Adjust the seat tilt so that you are comfortable when you are working on the keyboard. Usually, this will be close to horizontal, but some people prefer the seat tilted slightly forwards.
Your knees should be bent at a comfortable angle and greater than 90º flexion. If this places an uncomfortable strain on the leg muscles or the feet do not reach the floor, then a footrest should be used. The footrest height must allow your knees to be bent at 90º; the footrest height may need to be adjustable.
Adjust the backrest so that it supports the lower back when you are sitting upright. A range of chairs is available.
Avoid cradling the phone between your head and shoulder when answering calls. If you need to use your computer simultaneously, use a headset or the phone’s hands-free/speaker-phone capabilities if the environment is suitable.
Set the eye-to-screen distance at the distance that permits you to focus on the screen most easily. Usually, this will be within an arm’s length.
Set the monitor’s height so that the top of the screen is below eye level, and the bottom of the screen can be read without a marked inclination of the head. Usually, this means that the center of the screen will need to be near shoulder height. Your eyes should be level with the toolbar.
People who wear bifocal or multi-focal lenses will need to balance where they see out of their lenses and avoid too much neck flexing. The height of the monitor can be adjusted using a monitor riser.
Place the document holder close to the monitor screen in the position that causes the least twisting or inclination of the head.
Adjust the height of the work surface and/or the chair’s height so that the work surface allows your elbows to be bent at 90º, forearms parallel with the floor, wrist straight, shoulders relaxed.
Place all controls and task materials within a comfortable reach of both hands so that there is no unnecessary twisting of any part of the body. Most people prefer the document holder to be between the keyboard and the monitor. There are many different types of document holders available.
What does crime and fidelity insurance cover for law firms?
Crime and Fidelity Insurance protects law firms from loss of money, securities, or inventory resulting from the crime. Common insurance claims allege employee dishonesty, embezzlement, forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, and other criminal acts.
These schemes involve every possible angle, taking advantage of any potential weakness in your law firm’s financial controls. From fictitious employees, dummy accounts payable, non-existent suppliers to outright theft of money, securities, and property. Fraud and embezzlement in the workplace are on the rise, occurring in even the best work environments.
Any employer that needs to be concerned with Employee Dishonesty or any business handing cash or securities needs protection from robbery or theft will need Fidelity/Crime Insurance.
Because most property insurance policies do not typically cover crime-related losses, crime protection insurance is a necessary component for any business. Unfortunately, the majority of firms don’t purchase enough crime protection.
According to a recent study by the Association of Certified Fraud Examiners (ACFE). It estimates the average business is losing six percent of its total annual revenue from losses involving employees — on average more than $9 per day per employee.
To find out more about how crime insurance can protect your law firm, please contact our office.
What is employee benefits liability?
Employee benefits liability might be one of the most important coverages your law firm didn’t realize it needs to have. Like many employers, your firm may offer employee benefits like health insurance or vision care. Such benefits can help your company compete for qualified workers. Unfortunately, they can also lead to lawsuits against your firm or your benefits employees if they are not administered properly.
Not Covered by Standard Liability Policies
Small clerical errors can have major consequences. For example, suppose your company hires a new employee, and he completes the paperwork to enroll in the company-sponsored health plan. Due to a clerical error by a human resources employee, the employee is not enrolled. Several months later, this employee is hospitalized with a serious illness and discovers that he has no health insurance. When his medical bills begin to pile up, he seeks restitution by suing the HR worker and your firm.
Claims like this are not covered under commercial general liability policies because an administrative error is not an “occurrence” as that term is usually defined. Moreover, such errors typically result in financial losses rather than bodily injury or property damage.
To insure itself against claims resulting from administrative errors, your firm can purchase employee benefits liability (EBL) coverage. EBL coverage is often provided via an endorsement attached to a general liability policy.
Employee benefits liability endorsements typically cover damages the insured becomes legally obligated to pay because of an act, error, or omission committed to administering employee benefits. EBL coverage usually applies on a claims-made basis, but some insurers do offer occurrence coverage.
If you would like to find out more about obtaining this coverage, please contact our office. One of our team members will be more than happy to answer all of your questions.
Law Firm Claim Scenario: Disclosure of Private Information
Here’s an example of a law firm that accidentally had a disclosure of private information. We hope this claim example can help your practice avoid potential problems in the future by providing the details around the claim. The following claim is related to a cyber liability insurance policy.
A woman purchased a used computer from a law firm that was selling old equipment. The computer still contained the personal records, including names, addresses, and social security numbers of prior companies, their officers, and even employees.
Loss: The cost of notifying affected parties per state law totaled nearly $110,000. Two lawsuits have been filed: one alleges damages over $200,000 from a party who claims she lost her job due to the disclosure; the second alleges that the plaintiff’s identity was stolen and that costs of correction and emotional distress will exceed $100,000.
Thankfully, in this case, the law firm in question purchased a cyber liability policy, which means their insurance company is currently handling the claim’s defense and may ultimately have to pay for the claims.
If you would like to find out more about obtaining a cyber liability policy for your company, please feel free to contact us.
What is personal and advertising injury coverage?
Included on every general liability insurance policy for law firms is a coverage entitled “Personal and Advertising Injury.” The problem is that very few people understand what this coverage is and how it can protect your company.
Personal and Advertising Injury is Limited in Scope
First, Personal and Advertising Injury (Coverage B) is much narrower in scope than your Bodily Injury and Property Damage (coverage A) portion of your general liability insurance. The latter is quite broad. It covers virtually any claim or suit for bodily injury or property damage caused by an occurrence, as long as the claim is not subject to an exclusion. Personal and Advertising Injury applies only to claims that result from the specific offenses included in the definition of a claim.
Covers Intentional Acts, Not Intentional Injury
Another difference between Coverage B and Coverage A has to do with the types of covered acts. Coverage A applies to bodily injury or property damage caused by an occurrence that results from your negligence. Negligence is a type of tort (civil wrong) committed unintentionally, meaning the accident occurred because you failed to exercise reasonable care, not because of something you did intentionally.
Coverage B, on the other hand, covers intentional torts. Intentional torts include acts like libel, slander, and false arrest. They are called intentional torts because they arise out of intentional acts.
Suppose you own an apartment building. Tim, one of your tenants, has been acting suspiciously, and you fear he may be conducting a drug-making operation.
One day while Tim is out, you enter his apartment (an intentional act) to look for drugs. Tim learns that you were in his apartment without his permission and sues you for wrongful entry. Wrongful entry is an intentional tort that is covered under Coverage B.
Coverage B applies to intentional acts that result in unintentional injury. It does not cover injury that you inflict on someone deliberately.
Requirements for Coverage
To be covered under Coverage B, a claim must seek damages for personal and advertising injury caused by an offense that arises from your business. The offense must be committed in the coverage territory and during the policy period. Moreover, no coverage is afforded for an offense that arises from the material you published before the policy period.
Coverage B excludes claims arising from any of the following:
Knowing Violation of Rights Injury you inflict on someone intentionally. No coverage is provided for an offense if you knew, when you committed it, that it would violate someone’s rights and cause injury.
Publication With Knowledge of Falsity False statements you published verbally or in writing if you knew they were false when you published them.
Contractual Liability Liability for personal and advertising injury that you assume on behalf of someone else under a contract.
Breach of Contract Your failure to adhere to the terms of a contract. Coverage is afforded for breach of an implied contract to use someone else’s advertising idea in your advertisement.
Statements About Price or Quality False statements you make in an advertisement about your product or service’s price or quality. For instance, suppose you publish an ad stating that your business, Best Buns, uses 100% organic ingredients in all of its products. If a customer sues you because the muffin she bought from you contains no organic ingredients, the claim will not be covered.
Intellectual Property Your breach of someone else’s copyright, patent, trademark, or trade secret. An exception to this exclusion is an infringement (in your advertisement) of someone else’s copyright, trade dress, or slogan. Such infringement is included in the definition of personal and advertising injury.
Chatrooms, Bulletin Boards, Unauthorized Use Your Internet chatrooms or bulletin boards, or your unauthorized use of someone’s email address or domain name.
War, Pollution, Certain Laws War, pollution, and violations of the Telephone Consumer Protection Act and the CAN-SPAM Act. The TCPA prohibits certain marketing solicitations via telephone or fax. The CAN-SPAM Act applies to unsolicited emails.
Your policy may contain other exclusions besides the ones listed above.
Personal and advertising injury is subject to a limit that applies to “each person or organization.” This limit is the most the insurer will pay for all damages assessed against any one person or company. Damages or settlements paid under Coverage B are also subject to the General Aggregate limit in the policy.
If you are sued for an offense covered under personal and advertising injury liability, your insurer will defend you. The costs related to your defense will not reduce the limits cited above. In other words, your defense costs will be paid in addition to the limits.
Claim Scenario: Workers Comp. Benefits Awarded for Stress
In a recent ruling, an employee was awarded workers comp benefits for stress. We want to share claim scenario details and court rulings as it could affect your law firm’s insurance. The following is a recently issued ruling on work comp. A policy that awarded benefits to a paralegal for health problems related to stress:
A second-grade teacher should receive limited workers compensation benefits for health problems she says she suffered while working in a stressful classroom, a Pennsylvania court has ruled.
Shirley Hilton worked for the Philadelphia law firm from November 2018 to March 2019. On her last day at the firm, she suffered heart palpitations, headaches, dizziness, and nausea “as a result of a tough day with her challenging work environment,” according to the ruling.
Ms. Hilton went that afternoon to a regularly scheduled appointment with a doctor who had treated her for some time. The doctor’s office called Ms. Hilton’s firm that day and told the partners that she would not be returning to work because of the firm’s “overly stressful environment,” court records show.
A doctor appointed by the law firm treated Ms. Hilton and “made her return” to her regular job in May 2019. Still, she worked only four days upon her return and was not paid beyond the firm’s March date.
In June 2019, the law firm reassigned Ms. Hilton to another position, which she characterized as being quiet with “excellent work… going on,” records show. However, Ms. Hilton did not begin work that September because she said she was still undergoing treatment for the job-related stress she suffered at her previous position.
Ms. Hilton filed a workers comp claim for work injuries she suffered in March 2019, including vocal cord injury, aggravation of pre-existing lupus, heart murmur, and court records show.
A workers comp judge granted Ms. Hilton’s petition after finding her testimony was credible in describing “serious behavioral problems” at the law firm that caused her injuries, records show.
The Pennsylvania Workers’ Compensation Appeal Board affirmed the benefit award, and the Philadelphia law firm appealed.
A three-judge panel of the Pennsylvania Commonwealth Court affirmed Ms. Hilton’s benefit award on Tuesday. Still, it reversed a portion of the appeals board decision that would have allowed her to receive ongoing benefits.
The appellate court found that testimony from Ms. Hilton’s physician credibly established that she suffered injuries from working at a law firm, including exacerbating her pre-existing lupus in March 2019.
However, the doctor testified that Ms. Hilton was not disabled from working as a paralegal “as long as she did not work somewhere like her former frim,” records show. Therefore, the appellate court granted benefits to Ms. Hilton only from March 2019 to September 2019, when she could have begun working at the less stressful firm or position.
What is employee dishonesty insurance coverage?
Employee dishonesty insurance can be one of the most important coverages firms can purchase. Why? Fraud and embezzlement instigated by employees are on the rise in the small business workplace. According, Small businesses are especially vulnerable, especially those who cannot absorb large losses or cannot afford extensive precautions and safeguards.
Employee dishonesty insurance coverage sometimes referred to as fidelity bond, crime coverage, or crime fidelity insurance, is a type of business insurance that protects a small business employer from a financial loss due to fraudulent acts conducted by an employee group. The financial loss can be caused by an employee’s theft of property, money, or securities owned by a small business.
Stand-alone employee dishonesty coverage policies are designed to cover forgery, alteration, unauthorized electronic funds transfers, credit card fraud, computer fraud, money order fraud, and counterfeit fraud. These business insurance crime coverage policies not only protect the small business owner, but employees defined in the policy, such as current or former employees, trustees, members, partners, directors, temporary employees, and seasonal employees, may also be protected.
Endorsements can also be added to employee dishonesty insurance coverage policies. For example, a third-party endorsement can be added, extending coverage to a client that you’re performing services for under a written contract. Under this endorsement, the policy will compensate for damage or loss to the property, money, or securities leased or owned by a client due to theft by your employee. Basically, this third-party endorsement modifies the employee dishonesty policy to include client premises coverage. An endorsement can also be added to cover an Employee Retirement Income Security (ERISA) bond.
Some typical exclusions in an employee dishonesty insurance policy include math errors or omissions, accounting errors and omissions, vandalism, government seizure or destruction of business property, profit and loss restatement, theft by the policyholder, and loss of income that would have been realized without damage or loss to property, money, or security.
What is valuable papers and records coverage?
Many law firms don’t realize that valuable papers and records coverage may be vital to your firm’s business operations. You may be relying less and less on hard copies of your valuable papers and records and transitioning to electronic filing instead. Even so, your hard copies still need to be protected in case you experience a catastrophic loss, like a fire or a natural disaster.
Although you may have some existing coverage for valuable papers with a personal property form or standard business owners policy, this coverage is fairly limited and may not be adequate to meet your needs.
This is where valuable papers and records coverage can help you rebuild your business after a loss. To put it into perspective, analyze your business needs, and see what it would cost to replace your records:
Would you need to hire temporary employees to help replace the papers?
How many hours of work would it take to replace the papers?
Would you need to obtain original versions?
Would you need to recreate original work, like home inspections, surveys, or maps?
If you consider the actual costs, you may realize you need more coverage than you currently have.
What is Considered a Valuable Paper?
Valuable papers are documents that are critical to your business and do not have duplicates. A policy may say it covers “written or printed documents, manuscripts and records,” which could include invoices, client lists, contracts, loan documents, and medical or employee records.
Valuable papers generally do not include money, data records, securities, and records stored electronically, so ensure you have additional coverage for those things.
Valuable Papers Coverage
The preferred method to insure valuable papers is to purchase valuable papers coverage and, if the value of your accounts receivable justifies it, purchasing accounts receivable insurance. If your business handles most accounts receivable payments electronically, accounts receivable insurance would not be necessary for you to consider.
Valuable papers insurance offers two types of coverage:
A blanket limit of insurance is offered for valuable papers and records that can be replaced. The limit should be high enough to cover the research cost and replacement of the papers after sustaining the worst possible loss.
Individual amounts of insurance are provided for items that cannotbe replaced, like one-of-a-kind historical documents or first edition books. The amount of insurance provided reflects the appraised value of the item. Each item should be reappraised every two or three years to keep up with inflation and market conditions, and the insurance amounts should be adjusted accordingly.
Program of Records Protection
Establish a program of records protection at your business to ensure the safety of your valuable records. Analyze your exposure to potential losses like flood, fire, or theft, and protect your records accordingly.
This could mean storing all important records in fire- and theft-proof locked files when not in use or your business is closed. Return the records to storage promptly after you use them.
Give special protection to rare or irreplaceable books and documents. They may need protection from light, humidity, or insects.
You can also store copies of valuable papers in a second location and transfer them frequently. Be sure the second location is far enough away from your primary location to avoid the same loss or risk.
Umbrella Liability Insurance – 5 Things to Know
An umbrella liability policy provides an insured with an “umbrella” of liability protection over the primary liability insurance. Most umbrella insurers require you to purchase primary insurance coverage before selling you an umbrella policy, such as general liability insurance, auto liability insurance, workers compensation, or employer liability insurance.
Your umbrella policy can provide coverage:
over the primary liability insurance carried by the insured if the primary insurance is exhausted by a loss;
of liability exposures for which there is no primary insurance; or
when the primary policy contains an exclusion that is not similarly excluded under the umbrella policy.
1. Individual judgment and individual risk Umbrella liability insurance policies are largely a matter of the insurer’s judgment, and rating is almost entirely a matter of individual judgment, not only from insurer to insurer but also from individual risk. Many of the umbrella provisions are negotiable with most underwriters.
2. Underlying coverage A requirement for underlying liability limits of $1 million is common. For insureds with severe advertising or another personal injury, or other special liability exposures, underlying coverage with high limits in these areas may also be required if these exposures are included in the umbrella coverage. Umbrella policy conditions usually call for maintenance of the underlying coverage, with the umbrella insurer’s part in a loss being determined as if the underlying contract were in force, even if it’s not. The only exception is when an underlying policy is totally exhausted by payment of the loss, in which case, the umbrella policy “drops down” to replace the exhausted underlying protection. Drop-down coverage also may become effective when the primary insurer is insolvent.
3. Defense coverage A significant variation in policies has to do with defense coverage; almost all umbrella liability contracts have provisions that, in effect, protect the right of the umbrella insurer to take over or participate in defense of a claim that may involve it. These policies include defense coverage for uninsured exposures, the authors say, even when the loss doesn’t appear likely to involve the umbrella contract. Also, some contracts include defense coverage of losses when, because the underlying insurance is exhausted by the loss payment, the umbrella policy comes in as primary coverage. Some policies include defense and appeal costs within the coverage limits, while others provide them as supplementary payments outside the coverage limits.
4. Additional insured Any additional insured under any policy of underlying insurance is automatically an insured under the umbrella policy. But the coverage isn’t any broader than the coverage provided by the underlying insurance. If the underlying insurer or the insured elects not to appeal a judgment over the retained limit, the umbrella insurer reserves the right to do so at its own expense. The umbrella insurer also pays for taxable court costs, pre-and post-judgment interest, and disbursements associated with the appeal.
5. Indemnity policy or pay-on-behalf-of policy Indemnity policies don’t require the insurer to make payment to the insured until the insured has first made payment for covered damages or expenses. The language requires you to use your own money to pay for damages and defense and then seek reimbursement. With a pay-on-behalf-of policy, the insurer promises to pay damages on behalf of the insured. This means that the insured doesn’t have first to make payment and then seek reimbursement from the insurer. The insurer normally pays expenses for defense as they are incurred if the umbrella insurer has taken over the defense role, even with a pay-on-behalf-of policy.
6. Common exclusions The Commercial Liability Umbrella Form excludes certain coverages that apply to specific situations. The following are only a few of the exclusions provided in the form. For more information, refer to the form itself and the detailed analysis provided by the authors.
Workers compensation, employers liability, and employment-related practices