The cover provided under the LPIIF PI Master Policy may be insufficient for your practice’s needs. It is important that you do an assessment in respect of the amount of cover that would be prudent for you to have in place. Some organisations may insist that you have a certain level of professional indemnity cover (in excess of that afforded under the LPIIF policy) before they will give you instructions to act for them or include you in their respective panels of attorneys.
Some considerations to be taken into account in this regard:
- Should you wish to purchase a higher limit of indemnity, this can be done by purchasing additional cover in the commercial market. The LPIIF does not sell additional cover. You would need to contact a reputable broker to advise you on and arrange so-called “top-up” cover for your firm.
- Your broker should be able to guide you as to which other cover you might need to ensure that you are indemnified against circumstances which are not indemnified by the LPIIF policy. There are several different types of insurance cover available to practitioners.
- Your attention is specifically drawn to the provisions of the LPIIF Master Policy which exclude, amongst others, claims arising from or in connection with misappropriation of funds.
- One of the most common misconceptions held by practitioners, is that they themselves enjoy indemnity through the Legal Practitioners’ Fidelity Fund for their/their staff’s misappropriation of trust money. The Fidelity Fund is a fund of last resort, which means that a claimant first needs to exhaust all remedies against the partners/directors of the practice before the Fund comes to his/her assistance. The Fidelity Fund is a client protection fund and the claimant (not the practitioner and his/her staff) will be indemnified should they have a valid claim.
- It is therefore essential that all practitioners with trust accounts carefully consider the risks of failing to buy cover for misappropriation of trust money through a broker on the open market.
- You may also consider buying Fidelity Guarantee cover for the loss of money or property sustained by the business/practice as a direct result of fraud, dishonesty or theft by an employee in the course of employment.
- Your broker will also be in a position to guide you in respect of other insurance policies relevant for your particular circumstances-, including cybercrime policies and directors and officers liability (D&O) policies.