LPL
Missed Statute of Limitations
The claimant retained the insured to pursue a personal injury action following a motor vehicle accident. The claimant was rear ended by another vehicle and sustained neck and back injuries. The accident occurred in New Jersey, but the insured erroneously docketed the statute of limitations for a New York action, which has a longer statute of limitations. Thus the claimant was barred from bringing a personal injury action against the other driver. Following the accident, the claimant was diagnosed with a lumbar region tear and herniation at L5-S1 level in his lumbar spine, and underwent a decompression and fusion surgery. Given the lack of liability defenses, unpaid medical bills in the amount of $79,000, pain and suffering prior to the surgery for nearly a year, an invasive back surgery and a recovery period, and potential for hardware replacement and revision back surgery. Total expense and indemnity was approximately $285,000.
- Cost to Firm: $285,000
- Cost of LPL Policy that would have covered these losses: $7,800
Contract Error
The insured represented the claimants in connection with a commercial loan. The intent of the parties was for the loan to be a non-recourse loan so as to not hold the claimants personally liable in the event of a default. Several years later the loan went into default and the note was sold to another lender. The new lender filed suit against the claimants and it sought to hold them personally liable based on their interpretation of the loan documents. The interpretation of the loan contract, which was drafted by the Insured, became at issue and the court determined that the contract was unambiguous in the lender’s favor. This decision based on the Insureds scriveners error, which was essentially the omission of one parenthetical. This decision was also in spite of affidavits from all of the original parties to the loan contract, stating the intent of the loan was not full recourse. The claimants settled the underlying dispute for $1.6M and then pursued a claim against the insured for the amount of the settlement and $465K in related attorneys fees. This matter ultimately resolved at mediation. The total expense and indemnity for this case was approximately $800,000.
- Cost to Firm: $800,000.
- Cost of LPL Policy that would have covered these losses: $17,800
Failure to Properly Advise Client
In a Workers Compensation case, the attorney is claimed to have failed to advise her client that he had the option of pursuing a tort claim against his employer as opposed to filing a petition under the Workers Compensation Act. That option existed because the employer was uninsured at the time of the accident. While the attorney’s file contains numerous notes that indicated she advised the client on several occasions that he could sue the employer for personal injuries, there was nothing in writing to the client that confirms these conversations took place. The difference in recovery between a workers compensation and personal injury lawsuit is significant, so the client could have successfully argued that even if his attorney orally advised the client, she had a duty to put this advice in writing so that the client could make an informed decision. The attorney did not present well during her deposition and there were e-mails where she refers to the client as an idiot and that he should see a psychologist. Based on the above, it was determined it was more likely than not that a jury would find liability against the attorney. Due to the unfavorable liability position, poor venue, and sympathetic plaintiff, the matter was resolved for a reasonable amount at mediation. The total expense and indemnity was approximately $500,000.
- Cost to Firm: $500,000
- Cost of EPLI Policy that would have covered these losses $2,800
Cyber
Cloud Hack
Company Profile: Large Law Firm with offices nationwide
A national Law Firm used a third-party cloud service provider to store their customers’ personal information. The cloud provider suffered a major data breach, compromising the Personally Identifiable Information belonging to thousands of the Firm’s clients in several states. As the owner of the data, the construction company had a legal obligation to provide an adequate and timely notice. The Attorneys General in several states instigated a regulatory investigation against the Firm to determine whether they responded appropriately to the breach in accordance with various state laws. the Firm was obligated to notify over 10,000 past and present Clients that their Firm’s data had been compromised.
- Cost to Firm: $223,671 for Incident Investigation, Client Notification, Compliance and Crisis Management/Public Relations.
- Cost of Cyber Policy that would have covered these losses: $8,750
Phishing Email
Company Profile: Small Personal Injury law Firm
An employee of a small Personal Injury Law Firm opened a phishing e-mail that infiltrated their centralized network. Anti-virus software failed to keep out the malicious code, exposing names, addresses, dates-of-birth, medical record numbers, medication, dates of service and diagnoses of 1200 clients. A computer forensics investigator was hired, who determined that PHI (protected health information) had been compromised. The Firm notified the affected individuals and hired a public relations firm in anticipation of bad publicity. Thereafter, The Office for Civil Rights launched an investigation and the Firm was fined as a result of a HIPAA violation for having unsecured access to the network.
- Cost to Firm: $590,000 for Incident Investigation, Client Notification, Compliance, Crisis Management/Public Relations,
Fines and Penalties - Cost of Cyber Policy that would have covered these losses: $3,200
EPLI
Harassment & Emotional Distress
An invited guest of a summer associate to a picnic was subjected to derogatory remarks by an alcohol fueled partner while other partners stood by idle. The harassment and emotional distress claim resulted in a $250,000 award.
- Cost to Firm: $250,000
- Cost of EPLI Policy that would have covered these losses: $2,900
Age Discrimination
A 62 year old Lawyer successfully sued his employer for age discrimination because the firm failed to document the Lawyer’s poor performance. The Lawyer won over $1,000,000 in the suit.
- Cost to Firm: $1,000,000
- Cost of EPLI Policy that would have covered these losses $4,700
Sexual Harrassment
A female employee working for a medium sized Law Firm alleged that several co-workers made inappropriate sexual comments towards her, including suggestions that she was having a sexual relationship with another co-worker. In addition, she also alleged that her boss and co-workers asked her inappropriate questions concerning her personal life. The plaintiff alleged that after she complained, her manager engaged in a practice of retaliation. She contended that she was excluded from certain meetings, taken off certain projects and assignments, treated rudely and received a negative evaluation. Total defense costs and settlement exceeded $550,000.
- Cost to Firm: $550,000
- Cost of EPLI Policy that would have covered these losses $3,500
Disability Discrimination
An employee filed a lawsuit against his employer alleging that his employment was wrongfully terminated based on disability discrimination. The evidence indicated that the Law Firm did not appropriately engage in the interactive process to reasonably accommodate the plaintiff, but instead fired him while he was out on medical leave. In addition, while the plaintiff was still an employee on medical leave, the Firm failed to mention him in the application process for a new health care plan which required the disclosure of any employee currently out on disability. Total settlement and defense exceeded $600k.
- Cost to Firm: $600,000
- Cost of EPLI Policy that would have covered these losses $5,600
Crime & Crisis
Disappearance
The father of the Marketing director of a San Francisco based real estate company was vacationing in Tennessee. His family was growing concerned after he had failed to contact them. The Marketing Director’s business had purchased a Crime & Crisis Event Policy, which also covers the owners’ spouse and family members. The client called the 24/7 response number and explained the situation. The response consultant made local inquiries in areas the traveler was believed to have been to successfully locate the client’s father. The response consultants time was covered up to $1M.
- Crime and Crisis Policy Cost: $1,000 + State Tax
Terrorism
On a business trip to Southern California a Director of a Chicago-based pharmaceutical company was caught in a terrorist attack. She was unharmed but trapped in her vehicle for several hours. Response consultants, available through the Crime and Crisis Policy provided real time security advice, along with updates on the current situation. Damage to her car was covered as was car rental expense while repairs were made. Trauma counseling after the attack was also covered.
- Crime and Crisis Policy Cost: $1,000 + State Tax
Kidnap
While exploring investment opportunities in Honduras, the President of a large New York retail group was kidnapped by an organized gang. A significant ransom was soon demanded. Response consultants were deployed to Honduras. They worked with local authorities and were a liaison with the family. All the consultants time and ransom paid were covered up to $1M and the rest and rehabilitation costs of the victim were covered up to $10,000.
- Crime and Crisis Policy Cost: $1,000 + State Tax
Emergency Repatriation
Volunteers from a non-governmental organization based in Washington, D.D. were working in South Sudan promoting clean water initiatives when hostilities between government and rebel forces flared in Juba. The team was stranded and unable to get any commercial flights back to the US. The resp0onse consultants provided 24/7 remote monitoring of the security situation in Juba, provided personal security advice for the employees during this time and provided transport to safely evacuate the personnel.
- Crime and Crisis Policy Cost: $1,000 + State Tax