Lawyers Professional Liability Insurance and Risk Management Services

Lawyers Professional Liability Insurance and Risk Management Services

International Insurance Brokers Ltd Established in London in 1996, are international insurance brokers specializing in Lawyers Professional Liability Insurance. We have particular expertise and experience in the US legal market and, in partnership with leading specialist US brokers, work with hundreds of law firms ranging from boutique practices to national and international AM Law firms. With offices in London and Bermuda, remains management owned, with its founders continuing to play leading roles in its strategic direction and client relationships. International Insurance Brokers Ltd is authorised and regulated by the Financial Services Authority. Accredited Lloyd s Broker

A better way to insure Expertly formulated and placed Professional Liability Insurance plays a vital role in the ability of any law firm to conduct its business from day to day. are international insurance brokers, with proven expertise and experience in partnering with specialist US brokers and their US law firm clients to arrange insurance customized precisely and specifically to the firm s unique profiles and needs. In particular, as part of the global team, specializes in helping migrate firms from the familiar environment of mutual cover to the competition-driven, and in our view more appropriate, commercial market. s success over the last 15 years has been built on a three-pillar model uniting excellence in broking, high-level technical skill and effectiveness and efficiency in the management of claims. In addition, through our subsidiary Risk Management Services, provides risk management resources of a quality consistent with the expectations of the most risk-conscious of law firms. With longstanding broking relationships with key insurers in the London, European and Bermudian markets, s clients benefit from our practice of negotiating directly with senior underwriters at all times. As a part of the global broking team, we have assisted many substantial US firms in moving their Professional Liability Insurance to the commercial market. offers any firm considering this transition a unique mix of experience, entrepreneurial approach, client service and capacity in the global insurance market. For the long term, is a partner that can help you protect your interests, reduce your risk, assist in handling your claims and, most importantly, enable you to practice law in complete confidence.

Helping law firms get the most from the commercial insurance market possesses a high level of technical expertise in US Lawyers Professional Liability Insurance. We currently represent many top AM Law firms, including 8 of the top 50, and we are proud to claim a retention of business in excess of 95%, in many cases working together in partnership for over 15 years. Our role in your insurance By partnering with your US broking team, we provide highly specialized expertise in insuring Professional Liability, along with access to the highly important Lloyd s of London, Swiss and Bermudian markets. Our objective is to put in place for you the broadest and most cost effective insurance program possible, capable of standing the test of time and of performing strongly if called upon. We work in partnership with your US broker with the shared aim of conducting a long term relationship in which we: use our expert knowledge of the global commercial underwriting market to place your business with quality insurers committed to Professional Liability as an insurance class. ensure that the markets see your firm in the best possible light and that it is underwritten entirely on its own merits. We create alternatives and provide you with options, and can structure a balanced, stable program, using specialist markets to offer you the ability to purchase competitively priced excess layers. use our technical expertise to ensure structuring of cover and wording of policies that provide the highest level of precision (and so coverage) for your specific needs. apply our extensive experience and strong relationships with insurers to act as your advocate in the management and expedition of claims. We encourage direct interfacing between you and each underwriter with whom we place your business, in order to build long term relationships which are sustainable through hard and soft market cycles. 2

We maintain the highest service levels at all times, ensuring you are able to contact our Service team for assistance 24/7. Whatever kind of firm you are, we can help We specialize in defining and securing competitive insurance for firms of all types, sizes and disciplines. Our clients include: large firms, requiring complex global programs with high excess limits which we arrange to be underwritten by insurers all over the world. firms with specialist practice areas, such as Intellectual Property, Entertainment, Securities and Class Action Plaintiff, which demand specialist cover. firms looking for alternatives to their existing program, or wishing to purchase additional limits in excess of their existing program, which may be in the commercial market, with a mutual or as a domestic primary placement. Arrangement of other insurance lines In addition to Professional Liability, together with our US broker partner, we can arrange for the placement of other lines of insurance forming a part of your firm s needs. This includes Management Liability, Employment Practices Liability and Cyber/Privacy coverage. Complementing insurance with Risk Management Risk Management Services is our dedicated Risk Management and Loss Prevention resource, which provides a variety of consulting and training services to our clients. This offering, the quality of which is recognized across the sector, is especially valued by firms migrating from mutuals where similar services have been provided. 3

The advantages of commercial insurance The commercial insurance market is a global market, spread across London, the US, Europe and Bermuda. As such, it forces providers to maintain keen, value-based competitiveness in all areas influencing placement. The US broker and take your firm s insurance into this marketplace, using our experience and expertise to match your requirements with a solution providing optimum coverage, quality of claims handling, service provision and pricing. With over 60 years experience of insuring law firms, and with many of the largest firms having been insured for substantial limits continuously throughout this period, the commercial market has long since proved its ability to compete on both price and service delivery to the profession s satisfaction, providing stability over the longer term. Competition and choice Global capacity available in the commercial market for the largest law firms currently exceeds $500m. As only a handful of firms purchase this level of insurance, supply exceeds demand, ensuring firms of any size of a competitive choice as to whom to insure with. Around 70% of all US firms with more than 35 attorneys already insure in the commercial market, and in addition to underwriting some of the largest firms in the world, the sector insures a broad market cross section in terms of size, geographies and practice areas. How the commercial market operates The market provides unrivalled flexibility in terms of coverage, recognizing that the needs of each firm are unique and differ greatly. An 800 attorney firm with offices in the US only, for example, is likely to have very different coverage needs to a US firm of similar size whose attorneys are spread across offices in overseas jurisdictions. The commercial market offers the reach and flexibility to treat each jurisdiction independently to achieve insurance whose coverage and pricing accurately reflect risk. The commercial market underwrites each law firm on its own merits, with differentiation 4

The commercial market underwrites each law firm on its own merits, with differentiation being made on the quality of firms claims records and their commitment to strong risk management. Recognition is also given for effective efforts to mitigate exposures. It is also usual for placements to be shared between several participants, spreading risk and preventing any single insurer from exerting excessive control. Three way partnering While law firms frequently possess extensive knowledge with regard to insurance, they do not trade in the market on a daily basis nor maintain the relationships with global insurers necessary to extract the greatest benefit from the market or to facilitate settlement of claims. For this reason, placement and claims handling in the commercial market takes place through brokers such as. The result is a powerful three-way partnering, with the brokers acting on behalf of the law firm, but as liaison and facilitator between it and its insurers. Firms are encouraged to build their own strong, long term relationships with their insurers, however. By doing this the firm enhances its position for resolving claims and navigating difficult conditions in the market, and also gains valuable understanding of its options for obtaining the best possible terms. With effective brokers, and carefully selected insurers, the commercial market offers law firms an insurance solution whose flexibility and competitiveness cannot be surpassed. 5

How your specialist broker team helps you insure in the commercial market As brokers, the and US broker team works for you, acting on your behalf and in your interest at all times. We have expertise in selecting the best markets for your needs, negotiating the terms of your insurance, drafting your policy wording and handling claims with diplomacy and negotiating expertise so as to achieve the best outcome for you. Arranging your insurance As professional liability insurance specialists we possess a high level of market and technical expertise. This enables us to deliver outstanding performance in pricing, arrangement of capacity and securing of coverage on your behalf. We make an informed assessment of what should be the competitive sustainable price for the best coverage for your firm s specific need. We then pinpoint which insurers will be likely to prove most competitive in particular geographic areas, as well as which practice areas specific insurers favor, and so perform on most competitively. Armed with this knowledge, we then drive the price on your behalf, leveraging the global market to obtain the best terms for you. With access to all insurers, whether in London, the US, Europe or Bermuda, the global team are able to judge to which part of your program any particular insurer will be best suited. This enables us to corral market capacity to your advantage. The commercial market offers the broadest coverage available for any law firm, and the coverage we have negotiated for firms leaving mutual insurance schemes is as broad, and in many cases broader, than their previous coverage. Our expertise ensures we are able to secure the maximum possible breadth for you. In particular, we are meticulous in tailoring industry standard wordings to address your firm s specific coverage issues. 6

For more than a decade, s command of the complexities of the London and European markets has been peerless, giving our firm a tremendous edge in building a comprehensive and innovative enterprise risk management program. Martin S. Checov, Partner and General Counsel, O Melveny & Myers LLP

Our commitment to each of our clients is to use our experience and resources to consistently deliver the highest level of broker service and performance. Tara Falk and James Kalbassi, Co-Founders and Joint CEOs,

Managing claims We place great emphasis on the claims service we provide. We recognize that the approach we take to managing claims is of paramount importance to you, and act as your advocates throughout the process of a claim. Our Claims department forms part of the overall service team in London and are proven specialists in their field. We encourage you to meet with the Claims team directly, and to maintain regular communication with them during the conduct of any claim. We understand that Professional Liability claims are highly personal to the individuals involved, that they can be complex in nature and that they may often be commercially sensitive. While every claim is different, each requires bespoke work from dedicated and experienced specialists. Our experience working with our clients to negotiate and conclude settlements of large and complex claims, together with our philosophy of fostering a joint approach to problem solving in partnership with the insurer, ensures that your position is fully protected throughout the process of any claim. We are committed to open communication between underwriters, their representatives and ourselves so that all parties work together to minimize the impact of a claim on your on-going business, while at the same time focusing the collective expertise on bringing the claim to the best possible conclusion. 9

Advising and assisting with Risk Management Risk Management has a vital role to play in a law firm s strategy for protecting its professional and commercial interests, as well as in strengthening its negotiating position when arranging Professional Liability Insurance. treats the provision of Risk Management consultancy and training with sufficient gravity to have set up a dedicated and specialist company, Risk Management Services, to offer this assistance to our clients. Through this company, we work with you to create a tailored risk management program for your firm that integrates support from the underwriters with whom your business is placed. We maintain partnering agreements with specialist outside providers with extensive expertise in Professional Responsibility, Risk Management and Loss Prevention. These providers work with us to customize and implement a valuable and relevant program designed specifically for your firm. The breadth of their offers ensures we are able to provide you with the most comprehensive Risk Management support services obtainable anywhere in the sector. The services are financed, in part, by a dedicated Risk Management budget pre-agreed by your underwriters. Our goal is to ensure that the services we provide not only contribute to a more competitive insurance program for your firm, but also play a proactive role in helping you adopt procedures which will enable you to devote more of your time to your clients and the practice of law, and less time and expense to the management of internal issues of risk. 10

In assisting firms in integrating Risk Management into their culture, helps them raise professional standards as well as control insurance costs. Robert R Feagin III, Special Counsel to Risk Management Services, Senior Partner, Holland & Knight LLP

Why many law firms are now switching their insurance to the commercial market US law firms which have insured through mutuals for decades are now thinking hard about switching their Professional Liability Insurance to the commercial market. We are respectful of the historic role played by many reputable firms in establishing and supporting insurance mutuals. Our advice to all firms however is that the commercial market nutures long term relationships and provides flexibility, competitiveness and stability. The decline of mutual insurance associations Insurance mutuals were created to offer lower cost, greater capacity and broader coverage than were at the time available to law firms in a hard commercial insurance market. For many years, only law firms representing a preferred risk were invited to join. Over time, however, energetic expansion by mutuals such as ALAS has led to less judicious filtering of members. With the unitary rating employed by mutuals, this has brought about a significant diminishing of the objective advantages. The ALAS underwriting loss ratio in 2012 exceeded 150%. It could be argued that without significant increase in premium rates this cannot be regarded as a sustainable business model, particularly with the current obtainable levels of investment income. The result has been an increasing trend amongst law firms towards leaving mutual membership to insure in the commercial market. ALAS, which once boasted more than 370 members, has seen its membership reduced to 230 firms; a fall of 38%. is a key partner of the global team for many firms which have elected to switch. Of these, some switched to achieve lower pricing for their insurance, some wished to utilise their capital for other purposes within the firm s business plan, while others wished simply to gain a more flexible approach to wording, retention and claims handling. 12

Better... in so many ways Notwithstanding historical commitment to the principle of mutual insurance, firms switching to insure commercially through a team of and their US broker have found many advantages: Every firm is assessed on its own loss experience and risk profile, gaining advantage through sound management of these. At all times and especially during a softening market, most firms can make significant savings on the cost of their insurance, with a specialist broking team negotiating on their individual behalf. A firm no longer has to subscribe capital or face premium calls in the event of a shortfall in surplus. The Risk Management services we are able to offer are more closely tailored and diverse than those offered by any mutual. There is no longer any need to provide members of the firm to serve as Directors of a mutual, nor any concern over key insurance decisions being made by lawyer- Directors who are not insurance professionals. Tailored commercial policy wordings are generally broader than the standard wordings adopted by mutuals. There are no running costs to inflate premiums. In the event of a claim, the commercial market provides independent broker advocacy support, something not available when insuring with a mutual. The commercial market offers unaggregated Each Claim limits for firms with international offices, in line with local requirements.

Monitoring Counsel: an important facet of commercial market insurance It is usual when placing a law firm s Professional Liability Insurance in the commercial market for risk to be spread across multiple insurers. This has the advantage of preventing any single insurer from asserting excessive influence and of enabling the services of specialist insurers to be included where necessary. It assists the market by allowing spread of risk. To ensure that your claims may be dealt with and negotiated efficiently, we typically arrange for the various insurers underwriting your risk to collectively appoint a law firm as Monitoring Counsel. The Counsel acts as a liaison and collator of information on the insurers behalf. Monitoring Counsel have a wealth of experience in handling lawyer malpractice claims and, while retained and paid for by the insurers, we view them as a valuable and collaborative partner in assisting you with managing your claims and arranging settlement. To this end, we build a strong relationship with the Monitoring Counsel retained by your insurers, enabling us to assist you in conducting and negotiating claims efficiently. 14

A sound decision While mutual Professional Liability Insurance has in its time had much to commend it, the softening of the market has combined with the dilution in quality of mutual memberships to make this a now costly and inflexible option for many firms. Against this, the ample capacity and competitive environment of the global commercial insurance market offers: substantial cost savings based solely on the profile of the firm seeking to insure precise, custom tailoring of cover to meet a firm s needs representational assistance in negotiating and settling claims multi-insurer placement enabling specific geographies and specialisms to be covered accurately direct relationship building with insurers access to a comprehensive array of risk management services When insuring in the commercial market, specialised brokers provide law firms with expert and dedicated representation and management of their insurance need. is a Lawyers Professional Liability specialist, with strong relationships and expert knowledge of the insurers active in the global markets of London, Europe and Bermuda. 15

The cycle for renewal of Professional Liability Insurance makes it important to act swiftly if you are considering a switch to the commercial market for January 1, 2013. For assistance with Professional, Management Liability and Employment Practices Liability, please contact your local specialist broker. The team Professional, Management Liability and Employment Practices Liability: Tara Falk, Chief Executive Officer tfalk@paragonbrokers.com +44 20 7280 8201 James Kalbassi, Chief Executive Officer jkalbassi@paragonbrokers.com +44 20 7280 8202 Nick Lewin, Partner & Director nlewin@paragonbrokers.com +44 20 7280 8231 Richard Peters, Senior Vice President & Broker rpeters@paragonbrokers.com +44 20 7280 8210 Neil Moore, Senior Vice President & Broker nmoore@paragonbrokers.com +44 20 7280 8218 Alex Goward, Vice President & Broker agoward@paragonbrokers.com +44 20 7280 8219 Cyber Liability & Crisis Management: Lyndsey Bauer, Senior Vice President & Broker lbauer@paragonbrokers.com +44 20 7280 8228 16

Effective and fairly priced Professional Liability Insurance is an important acquisition for any law firm. Market conditions and the evolving professional landscape are causing many firms to question whether the mutual associations with which they have insured for decades still represent their best option in terms of cost and offering. is a registered Lloyds Broker, with offices in London and Bermuda, working closely with specialist US broker partners and their US law firm clients to arrange carefully customized Professional Liability Insurance in the commercial market. works with its clients over the long term, acting as their dedicated representative in managing their placement, handling claims and consulting on Risk Management. International Insurance Brokers Ltd 140 Leadenhall Street, London EC3V 4QT, England T +44 20 7280 8200 F +44 20 7280 8270 www.paragonbrokers.com Brokers (Bermuda) Ltd LOM Building, 27 Reid Street, Hamilton HM11, Bermuda