For over 45 years, TLI has been protecting Texas lawyers and supporting them in their practices. Initially, TLI filled a large hole in the legal malpractice insurance landscape when other carriers left the state and Texas lawyers were having difficulty finding insurance at reasonable rates. Since then, TLI has been a consistent and stable source of high-quality legal malpractice liability coverage at financially responsible rates for Texas lawyers and judges. Although lawyers’ professional liability insurance is our mainstay, it is not all we offer. As part of our unwavering commitment to support the lawyers of Texas, TLI offers a suite of insurance products. Below we provide an overview of the products we offer and why these coverages are important to have in place.
Lawyers’ Professional Liability Insurance
For Lawyers
TLI offers two types of policies for lawyers and law firms – a Premier Policy and an Essential Policy. In general, the Premier Policy provides more comprehensive legal malpractice insurance coverage than the Essential Policy. The Premier Policy has coverage for securities work, DTPA damages, punitive damages, limited third-party cyber, limited D&O coverage, limited crisis event coverage, and other benefits not available with the Essential Policy. As a lower cost alternative to the Premier Policy, the Essential Policy has lower limits, lower deductibles and less comprehensive coverage than the Premier Policy. Additional details regarding the two different policies can be found here.
All practicing attorneys need malpractice insurance, and it is critically important to have it from your first day of practice until retirement, with no period of time when there is not a policy in force (otherwise known as a “gap in coverage”). No attorney is immune from claims. Some clients may assert a claim, file suit or lodge a grievance even though it may lack merit, as the legal system can be difficult to understand and does not always produce a desired result. Further, mistakes do happen – even to the best and most diligent attorney. And when they do, it is not only the responsible and ethical choice to maintain insurance coverage to remedy those mistakes for your clients, but also a wise decision to protect your personal and firm assets. Having insurance does not make you a target for claims, but the lack of it certainly exposes your personal assets.
Going bare will not save you money, increase your bottom line, or save you time. The universal truth is that the cost of defending a claim – even if frivolous or without merit – will likely exceed the cost of your annual premium. Few if any attorneys can self-insure against the expense of a claim, which typically costs $25,000 (if disposed of very early) upwards to $150,000 or more (if litigated for 12-18 months) just for defense costs and before any indemnity payment. A more thorough explanation of why all attorneys should carry malpractice insurance and the provisions unique to lawyers’ professional liability insurance can be found in our article, the ABCs of Buying Legal Malpractice Insurance.
For Judges
TLI has been offering professional liability insurance to Texas judges since 1983. All TLI Judges’ policies provide coverage of $1,000,000 per claim and $1,000,000 aggregate, with a $1,000 deductible, for a reasonable flat rate. Additionally, our Judges’ policy also provides an allowance of up to $25,000 for defense of disciplinary actions, up to $50,000 per policy period.
Of course, judges generally have immunity for judicial actions performed on the bench in their judicial capacity. However, many judges have additional administrative duties, including court administration and overseeing probation programs, for which judicial immunity may not be available.
While some judges may have the option of being defended by the Texas Attorney General’s Office, not all judges have that option. In the event they are sued, TLI’s insured judges have the option of having TLI hire private defense counsel to represent them.
Cyber
Companies of all sizes are facing increasingly sophisticated social engineering attacks, which can lead to data breaches, debilitating ransomware events, and even reputational harm. Cybersecurity attacks, along with system failures and outages, can lead to significant out-of-pocket costs that severely impact an organization’s bottom line. Traditional insurance policies are typically not designed to cover or respond to cyber exposures. A cyber policy is specifically designed to address these gaps.
A cyber event can be defined as an actual or reasonably suspected network security failure, interruption in service, or network extortion threat. Other types of cyber related exposures include unintentional violations of privacy or cyber law, including the unintentional collection of protected information.
When reviewing Cyber risk, one must consider both first- and third-party exposures.
First Party Coverage
First party coverages protect an organization from internal risks, covering costs incurred as a direct result of a covered cyber event. These can include:
- Business Interruption – This provides coverage for financial losses when the covered business’ operations are suspended or interrupted due to a covered event.
- Contingent Business Interruption (CBI)- Cyber-attacks can spread through your suppliers or your outsourced technology providers, leading to significant impact even when your clients aren’t the target. CBI covers financial losses when a third-party service provider experiences a disruption due to a covered cyber event. This typically includes continuing normal operating & payroll expenses, and the difference between net profit earned and net profit that would have been earned if not for the covered event.
- Data and system restoration/recovery- This provides coverage for restoration of affected systems and data. This could include the cost to remove malware and other malicious software from devices. A data restoration professional may be required to come onsite to restore and rebuild IT infrastructure.
- Digital forensic investigation, data and system restoration– This provides coverage for retention of a DFIR professional to investigate and remediate an event or breach. The DFIR will also contain the attack and monitor the network for additional threats.
- Replacing bricked devices (devices rendered inoperable by a cyber-attack)
- Legal Expenses- This provides coverage for consultative and pre-litigation legal services.
- Breach notification- This provides coverage for the cost to notify individuals affected by the breach where there is a legal obligation to do so. This can require the insurer’s prior consent.
- Crisis management (PR)- This provides coverage for a crisis management professional to mitigate negative coverage and protect the reputation of the business.
- Cyber Extortion- This provides coverage for the cost to retain a professional negotiator to respond to cyber extortion. This coverage could also reimburse a firm for ransom payments made, or payments to eliminate the threat of extortion.
- Social Engineering & Cyber Crime- This provides coverage for the situation whereemployees are tricked into divulging sensitive information or transferring funds via phishing emails, or other forms of social engineering.
TLI has partnered with Tokio Marine HCC (formerly NAS Insurance) to offer a comprehensive cyber risk solution specifically designed for law firms. All TLI policies include $50,000 in first-party cyber security protection per claim, at no extra charge. This coverage is provided under a master policy with Tokio Marine HCC. This coverage includes: Security Breach, Cyber Ransom, Cyber Extortion, Costs of Notification & Remediation, Network Asset Protection, Online Prevention Training, and access to a Cyber Emergency Help Line.
Third Party Coverage
Third party coverage protects a firm from claims made by outside third parties affected by a cyber event or data breach. Coverages typically included are:
- Cyber, Privacy, and Network Security Liability- This provides coverage for failure to protect private or confidential information of others, and failure to prevent a cyber incident from impacting others’ systems.
- Electronic, Social, and Printed Media Liability- This provides coverage for any error, misstatement, misleading statement, act, omission, neglect, or breach of duty actually or allegedly committed or attempted by any Insured that results in a covered Cyber event.
- Data Breach Liability– This coverage provides protection to the business from liability arising from a covered event or data privacy breach.
- Non-Breach Privacy Liability– New privacy regulations have increasingly higher standards and penalties – and cyber insurance can help you through these changes.
- Regulatory Liability- This provides coverage for legal expenses, fines, and penalties incurred from an investigation by state, federal, or foreign officials due to a violation of a privacy law.
- PCI DDS (Payment Card Industry Data Security Standard) Liability- This provides coverage for contractual liabilities owed to payment card industry firms as a result of a cyber incident.
- Technology Errors & Omissions – This provides coverage for claims of negligence or breach of contract.
TLI’s Premier Policy provides limited third-party coverage for cyber related claims at sub limits in excess of the policy deductible of the lesser of 10% of policy limit or $100,000.
Business Owners’ Policy
A BOP (Business owners policy)is a package product ideal for businesses with less than $5M in annual revenue. A standard policy can include coverage for owned and/or rented property or buildings (fire, theft, wind/hail) as well as bodily injury liability, property damage liability, libel, and slander.
Texas Lawyers Professional Insurance Agency (TLPIA) (a subsidiary of Texas Lawyers’ Insurance Exchange) has partnered with The Hanover to offer a BOP designed specifically to protect your law firm. The BOP features: building and personal property coverage for your law firm, enhanced computer equipment coverage, valuable papers and records coverage on and off premises up to $25,000, business income loss and extra expense incurred during property repair or replacement, as well as liability coverage for bodily injury, advertising injury, and property damage occurring on your premises or as a result of your law firm practices.
Court Bonds
Fiduciary and Probate Bonds
Fiduciary and probate bondsare types of surety bonds that provide financial protection to beneficiaries of an estate or trust when a fiduciary, such as an executor or trustee, is appointed to manage assets. These bonds ensure the fiduciary fulfills their responsibilities according to legal and ethical standards, and they protect beneficiaries from potential financial losses due to misconduct or negligence.
Appellate Bonds
An appellate bond acts as a guarantee that the party appealing a lower court’s decision will pay the judgment amount to the winning party if the appeal is unsuccessful. This bond prevents the winning party from immediately collecting the judgment while the appeal is pending, and ensuring they are protected in case the appeal is denied.
Texas Lawyers Professional Insurance Agency (TLPIA) offers fiduciary, probate, appellate and other civil court bonds from The Bar Plan Court Bond Program. Underwritten by experienced professionals and managed by lawyers, The Bar Plan provides: fast turnaround times (typically 24-48 hours), competitive rates, and bonds backed by The Bar Plan Mutual Insurance Company or its subsidiary, The Bar Plan Surety and Fidelity Company.
You can find more information about any of TLI’s offerings, including how to apply for coverage, on our website. Additionally, you can also reach out to TLI Member Services at info@tlie.org or 800-252-9332.
*Please note that this article is meant to be an overview of common coverages for educational purposes. Nothing herein is a guarantee or promise of coverage presently or in the future. All insurance coverage is subject to underwriting and approval. Additionally, nothing in this article is meant to be a substitute for the contract of insurance that you have with TLI or any other carrier. Insurance policies contain specific terms and exclusions and we advise you to read those carefully. Your current policy controls the coverage you have.