Professional Liability Matters

LATEST INSIGHTS

May 14, 2013 • Accountants, Professional Liability Matters

Golfer Tees-Up Professional Malpractice Lawsuit

A professional golfer – with a famous ex-fiance – recently filed a professional malpractice claim against his former accountant for allegedly concealing unpaid taxes in excess of $500,000. Hank Kuehne is an amateur champion who last played in a major tournament at the 2012 Honda Classic, but is perhaps best known for his prior engagement to tennis great Venus Williams. Reportedly, Kuehne had no idea of his mounting tax liability until he fired his advisor and retained a new accountant to manage his portfolio. A classic example of poor communication leading to malpractice.

May 9, 2013 • Professional Liability Matters, Risk Management

Insurance Implications in the West, Texas Explosion

One million dollars of coverage for $100 million in losses? Unfortunately, that appears to be the case for the West, Texas fertilizer plant that recently exploded. Reportedly the owners of West Fertilizer Co. hold a negligible amount of insurance compared to the estimated cost of the damage caused by the blast. The plant did not hold excess or umbrella insurance policies. The fact that the company’s owner has not breached any applicable regulation has been the subject of heated debate on the national level regarding regulating mandatory insurance coverage for companies that handle hazardous materials.

May 8, 2013 • Legal Malpractice, Professional Liability Matters

Ignoring Prejudgment Interest = A Costly Mistake

Prejudgment interest awards are often overlooked in evaluating a claim, especially legal malpractice matters. Typically, when valuing exposure, the focus centers upon the underlying action had the attorney avoided alleged negligence. But overlooking the impact of prejudgment interest can prove to be a costly mistake. Depending upon the statutory interest rate in your jurisdiction and the potential amount of the award, prejudgment interest can transform a nuisance value malpractice case into a hefty judgment.

May 7, 2013 • Legal Malpractice, Professional Liability Matters, Real Estate Professionals

Real Estate Transactions Pose the Greatest Risk of Attorney Malpractice

According to a recent study, real estate transactions pose the most risk to attorneys of a malpractice claim. In its annual survey, the American Bar Association reported a higher percentage of professional liability claims stemming from real estate dealings than any other area. Over the past several years, plaintiff personal injury claims topped the list, but to the joy of the plaintiff’s bar and the chagrin of real estate professionals, that trend is apparently changing.

May 6, 2013 • Insurance Products, Professional Liability Matters

Insurance Blunder Costs Newest Philadelphia Eagles’ QB $11.5 Million

Quarterback Matt Barkley was selected by the Philadelphia Eagles with the 98th pick in the 2013 NFL draft. He was the fourth quarterback selected and was the first selection in the fourth round. History suggests that he will sign a four-year contract worth about $2.5 million. Sure, that’s a lot of dough, but not nearly what Barkley would have earned had he foregone his senior season at USC and entered the NFL draft in 2012. As a projected top-10 pick last year, Barkley would have made a minimum of $12 million guaranteed. His only guaranteed pay this year could be a signing bonus in the $500,000 range. Interesting reading, for some, but why does Professional Liability Matters care? Because Barkley could have purchased “draft insurance” last year which could have saved him millions.

May 2, 2013 • Risk Management

Former New Jersey Governor Sued for “Grossly Negligent” Conduct

Former New Jersey Governor Jon Corzine and other executives from MF Global were recently sued over the 2011 collapse of the commodity trading firm. In the suit, the bankruptcy trustee claims Corzine and others caused the firm to fail through a risky trading strategy and “grossly negligent” oversight. Corzine allegedly was aware that the trades were high risk, but failed to implement proper policies to protect the firm. In particular, the lawsuit contends Corzine breached his duties to the shareholders of MF Global and failed to act in good faith, allegedly causing the firm losses in excess of $1 billion. Corzine has vehemently denied the allegations and characterized the lawsuit as “a clear case of Monday Morning quarterbacking.”

May 1, 2013 • Insurance Products, Professional Liability Matters, Risk Management

Lawsuits Targeting America’s Wealthiest

A high percentage of the wealthiest Americans believe that they are more likely to be the subject of a lawsuit today than they were before the financial crisis. The issue of disparity of wealth, income and taxation has intensified these fears that their wealth can attract lawsuits. These concerns are reportedly legitimate, because under the widely accepted doctrine of joint and several liability, if more than one defendant is responsible for a plaintiff’s injury, any of the defendants may be held responsible for the entire damage award. The result is that the plaintiff may focus the attack on the deepest pocket. Much of this analysis may not come as a surprise but people of means frequently underestimate the potential cost of a lawsuit and misunderstand the affordability of effective protection.

April 30, 2013 • Ethics, Professional Liability Matters

Recent Decision: It’s Okay to Reach Your Next Client Via Text?

Marketing is a must for all professionals. The quality of a professional’s skills may be wasted unless marketed to, and utilized by, would-be clients. Thus, professionals strive for efficiency in targeting an audience but those efforts are tempered by ethical considerations in advertising. However, solicitation just got considerably easier for attorneys in Ohio who may now reach potential clients via text.

April 29, 2013 • Cyber-Liability, Professional Liability Matters

You’ve Just Been Hacked, Now What?

All professionals utilize computers in the workplace. These devices are a must for providing professional services, meeting customer needs, marketing, billing functions and countless other tools available to professionals through the use of computer equipment. Make no mistake, however, the very equipment that is so crucial to your business is under cyber-attack and is constantly at risk of a virus or hack. Yet, inexplicably, 25% of all computers worldwide are not adequately protected. Professionals cannot afford to be a victim of cyber-liability.

April 25, 2013 • Professional Liability Matters, Risk Management

When in Doubt Report, Report, Report…

It’s bound to happen…professionals make mistakes. Some of those mistakes may lead to a professional malpractice claim while others may go unnoticed, never to be heard of again. Given that most professionals cannot predict the future nor speak for their clients, professionals must timely report each mistake to her malpractice carrier pursuant to the applicable reporting deadlines because the policy may require it. Even those mistakes that seem inconsequential must be reported. The risks of failing to do so can prove to be costly.