Legal malpractice insurance companies see a variety of "unfortunate" developments involving claims, which is a significant increase in claims, says a broker inquiry.
There were also increases in legal error assessment claiming defense costs, the report issued Thursday by McLean, Virginia-based Ames & Gough, which is based on a survey of 11 leading companies writing the business. The survey was conducted via e-mail during the second quarter.
"Although it is not easy to distinguish a single factor as the direct cause of this inflation, most insurers point to the increased complexity of business transactions and trials as a prelude to rising claims costs," said the Ninth Annual Survey Report LPLI 201
The study found that for the first time in a few years, the number of New Claims Against Law Firm appeared to increase slightly in a year over year, with nearly 73% of investigated insurers indicating the number of applications submitted in 2018 was either the same or higher than 2017 .
The investigation said legal malpractice claims difficulty persist, with most insurers seeing individual claims payments exceeding $ 150 million. The largest number of claims continues to emanate from four key practice areas: business transactions, trust and real estate, companies and securities and real estate, the report said.
Ten of the 11 insurers surveyed indicated that the defense cost increased in 2018 in 2017, and 63% also reported that defense consultants' hourly rates increased again in 2018.
The report said conflicts of interest continue as the most frequent alleged error fraud, with seven of the 11 insurers continuing investigated them quoted as either the first or second leading cause of damaging claims.
At the same time, cyber requirements submitted under the lawyer's professional lability policy remain flat because more companies buy independent internet liability insurance, according to the report. However, the investigation found more claims that include alleged violations of the rules on professional practice.
Last year's survey found that the frequency of liability stabilized in 2017, but claims that the severity rate continued to increase.