Beazley has launched “Beazley Practice Protect,” an enhanced management liability policy for law firms, designed to confront a rapidly evolving market for counsel and legal services.
Beazley Practice Protect covers both law firm partners and non-partner officers such as CEOs and COOs who are increasingly being recruited by law firms to manage growth, both organically and by acquisition. The policy is available for law firms globally, although Beazley is placing an initial focus on the U.S. marketplace.
A critical issue in the trial against the former management team of collapsed law firm Dewey & Leboeuf, for which the jury was selected last week, is the relative responsibilities and liabilities of the firm’s partners and non-partner executives. Under Beazley Practice Protect, an additional excess limit has been set aside exclusively for non-partner executives for non-indemnifiable management liability claims should an investigation or inquiry occur.
Beazley Practice Protect includes a number of other valuable coverage extensions, including sublimited wage and hour defense cost coverage as part of the employment practices liability protection provided, the Dublin-based insurer said in a statement.
Wage and hour insurance protects firms against charges of unfairness in the pay and benefits offered to employees: a particular challenge for law firms relates to the misclassification of exempt employees who are not entitled to overtime pay under the Fair Labor Standards Act (FLSA), Beazley said. The FLSA lays down most wage and hour law at the federal level, but a mass of state laws complicate the picture significantly for employers.
Under an additional coverage extension, Beazley Practice Protect includes cyber liability coverage. Liability for data breaches is a growing source of concern for law firms, which frequently hold highly sensitive information on behalf of their clients. Beazley is a leading insurer of third party liabilities for data breach exposures.
Wayne Imrie, management liability underwriter in the company’s London office, said: “The business of law is changing fast. As the professional liability insurer to more than a third of the AmLaw 200, we have seen a much more competitive market for legal services increase exposures in a number of ways. For example, claims of tortious interference – the risk that a firm taking on lawyers from another firm will be accused of having somehow contributed to or exacerbated its difficulties – are a source of increased concern in recruitment decisions.
“We have sought to design Beazley Practice Protect to provide the most responsive coverage possible for the widening range of management liability exposures that today’s law firms confront.”
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