Professional Liability Blog

Many professionals know their liability insurance policies are written on a “claims-made” basis, meaning the policies provide coverage for claims made within the policy period and not when the event occurs. Due to the nature of these policies, those seeking coverage are required to report all known pending or potential claims when submitting applications for new policies or renewing existing ones. A recent ruling from the United States District Court for the Western District of Missouri highlights the importance of honest reporting of all pending and potential claims. See N. Am. Capacity Ins. Co. v. KM Teh Realty 5, LLC.

Insurance policies covering professional liability risks commonly afford coverage with eroding limits - such that the insurer’s payment of legal fees and expenses reduces the policy limits available to pay a settlement or judgment - and require an insured’s consent to settle.

Modern professionals today rely on a vast network of computers, servers, and/or cloud-based systems as the primary means of storing client information and conducting their businesses. While most are aware of cyber threats posing substantial risks to their businesses - and have even taken defensive measures - cyber insurance is often an afterthought.