Underwriting by untermenschen
Apr 1, 2007 Gelt, Lex scripta
Chubb recently refused to insure a New Jersey law firm because it has a blog.
This is not surprising. What’s largely going on, I can tell you from experience, is that small law firms are just plain finding it impossible to get malpractice coverage. It was the straw that broke the camel’s back for my old law firm. Despite being admitted since 1989 and never having a claim, plus, of course, all my marvelous professional qualities — a longstanding AV rating, top schools, a grip like a plumber — I could not get more than one quote for malpractice insurance for my five-lawyer shop, even though once a year half a dozen prospective insurers would bombard me with faxes and mailings seeking my business. To legal malpractice underwriters, intellectual property — and they stupidly see trademark, copyright and patents are all the same thing — is a dirty word. The one policy I could get was for an annual premium of $25,000. If you’re smaller than being able to afford that, and do anything remotely interesting, they don’t want your business.
In this case the blog was really just an excuse, but is certainly is a troubling precedent.
Chubb, of course, would not return calls to the reporter from the New Jersey Law Journal who was inquiring about its idiotic decision. All it would say to the law firm was, “this is not a risk [we] are interested in undertaking.”
This level of discourse typifies the arrogance of insurance companies who, I must admit, I spent a significant part of my career suing on behalf of insureds. Now, Chubb and other insurance companies don’t owe coverage to anyone. On the other hand, the market for professional malpractice insurance is not even remotely comparable to free enterprise. It is mandated for most firms, and, of course, being insurance carriers, basically the entire way they do business is regulated.
The result is the erection of barriers to entry, or to remaining in the field, for newcomers and small players. Blogs make an easy target, especially for people who don’t have them or don’t get them. Hat tip to Bizzy Blog.
