Do You Know Your Malpractice Insurer?

TEXAS LAWYERS' INSURANCE EXCHANGE

DO YOU KNOW YOUR MALPRACTICE INSURER?

Based on reports from applicants, it appears that a number of insurers have either left the lawyers' professional liability insurance market recently or have raised rates dramatically. In one well-publicized situation, a commercial provider that used to provide malpractice insurance in Texas has been put under supervision by Pennsylvania regulators. Two other carriers who had been active in Texas have been downgraded by Best recently.

TLIE has never chosen to follow the lead of the commercial carriers, and we will not follow their lead in shrinking the availability of insurance or charging too little. We intend to remain a reliable source of attorneys professional liability insurance with financially responsible rates. At times, our rates have been higher than some commercial carriers, but we charged what was fiscally sound and necessary based on claim experience. When conditions have warranted, we have returned premiums to our insureds -- $11 million in the past 4 years.

We think that charting our own course based on our actual experience is a better way to run an insurance company. Insureds who stay with one stable company such as TLIE do not have to worry about the potential headaches that can come from changing insurance carriers. Those headaches can include variations in the scope of coverage from policy to policy, lack of coverage for prior acts, and issues regarding what constitutes timely notice of claims. Insureds who have remained with TLIE have seen their loyalty rewarded via policyholder distributions.

You may well hear more about a "hard market" in lawyers' professional liability insurance in the months to come. Reinsurance costs are rising rapidly and may eventually force TLIE to raise rates to cover this additional expense. TLIE does not raise rates simply because market conditions might allow higher premiums nor do we artificially lower rates to buy market share. It is these types of actions that produce wild gyrations in premium levels. Rates should be raised when expenses (claims, reinsurance, etc.) increase and they should be reduced when costs decline. This has been our philosophy since TLIE began doing business in 1979.