Posted in Law Firms

Minimum requirements approved for professional indemnity insurance for lawyers

From 11/10/2017, the mandatory PI requirements for lawyers cover:

  • Every damages (pecuniary and non-pecuniary, indirect, permanent, temporary and future);
  • Gross negligence of the insured + negligence, gross negligence and wilful misconduct of collaborators of the insured;
  • Claims from clients and third parties in general;
  • Claims arising from loss of documents/money/securities; and
  • Joint/several liability of the insured with others, without prejudice to the insurer’s recourse action.

In addition, the policy will:

  • be unlimitedly retroactive;
  • provide for a discovery period of no less than 10 years in case of cessation of the insured’s activity during the policy period; and
  • not provide for termination clauses in case of notification of claims or payment of an indemnity.

The minimum limits vary according to the firm’s turnover and number of professionals:

  • Single practitioners -turnover below €30 – policy for at least €350,000 per claim, per year;
  • Single practitioners – turnover between €30,000 and €70,000 – policy for at least €500,000 per claim, per year;
  • Single practitioners – turnover higher than €70,000 – policy for at least €1 million per claim, per year;
  • Law firms with max 10 professionals and a turnover lower than €500,000 – policy for at least €1 million per claim and €2 million per year;
  • Law firms with max 10 professionals and a turnover higher than €500,000 – policy for at least €2 million per claim and €4 million per year; and
  • Law firms with more than 10 professionals – policy for at least €5 million per claim and €10 million per year.

These figures will increase by 25% according to Article 1917 to cover the defence costs of the insured.

Source

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Author:

Paralegal with a remarkable lust for legal and business knowledge

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