All about Professional Liability Insurance – Radio Guesting Nov 17, 2021

All about Professional Liability Insurance – Radio Guesting Nov 17, 2021

| Insurance Recovery News & Updates Outside General Counsel

00:00

At FR Law Group, we approach the law from a business perspective, because we share your business mindset by representing hundreds of companies over decades. Our firm has the business acumen necessary to help your company create a sound budget, while avoiding the usual pitfalls. Get the benefit of our national-level experience without the national-level price tag. FR Law Group, the right team to have on your side, call 602-566-7425 or visit frlawgroup.com.

00:31

So, welcome back, everyone. We’re live on Facebook. So hi to everybody out there, like us and follow us. We’re going to share the show later on today. My next guest, we just heard their ad. I have Troy Froderman with me, and he is one of the principals of FR Law Group. Tell everybody a little bit about yourself what you do, and I know there’s some kudos about you. So I’m going to make sure that you tell him upfront today, so welcome back to the show.

00:58

Thank you, Carol, nice to see you. So FR Law Group, we are a business litigation law firm, meaning that most of what we do is in court representing clients when they get into business disputes. We tend to focus really in two general areas, Carol. One is in construction, and all forms of that. And also insurance recovery on behalf of businesses when they get sideways with their insurance companies, which happens more often than we’d like to thank.

01:30

All right. I want to also talk about you because, you know, I found out something that you said last time and I’m excited for you for this that you were named Top insurance lawyer in Arizona. Yes. That is so cool. Congratulations on that.

01:44

Thank you, It only took 33 years. Well, that’s okay. It doesn’t matter

01:47

as long as it happened, right. But I also want for you because we’ve talked before a little bit about you, what your experience and what you’ve had in your past. And what made you start FR Law Group and how you brought what you have from your past to the group.

02:03

Sure. So my law partner and I, we have actually now we have six lawyers in the firm and a couple paralegals. We have similar yet Divergent Paths. Upon graduating law school, I went right to a large law firm here in Phoenix, then I ended up migrating to an international law firm, and then to a national law firm. And my partner was on a parallel track. But he was actually working in the construction field before I went to law school. So about four years ago, actually four years ago, this month, both of us thought about, you know, what do we want to do in the next 20 years of our practice? Do we want to travel on a plane every day? Or would we prefer to be actually meeting with clients face to face not having to travel a lot, and also bring the wealth of experience that we have after being in large national and international practices to take that training in and make it available to clientele that would never be able to necessarily afford the rates and the structure and all the lawyers that come with a large law firm.

03:07

Now, you are right here in Phoenix, you’re located here in Phoenix, but you can help anybody nationwide. Yes, we work all over the place. You’re rated with the Better Business Bureau, and you do free consultations. And today, we are going to talk once again about business and having insurance, yes, and what can happen.

03:26

And so I thought what we might do today is talk about something other than general liability and property coverage policies because we’ve done that for the last year and a half. So another line of policies that businesses tend to purchase are what we refer to as errors and omissions, or what most people would just think of as professional liability insurance. And the easiest one to think about in that term would be medical insurance for a doctor. He has malpractice insurance. So this is essentially what a doctor has, but it’s for the general business field. Also, lawyers have professional liability policies. And so anytime you can think of a business, which should be pretty much every business that provides a service to somebody, they can also be subject to some sort of professional liability claim.

04:21

So I’m just going to use me as an example. Because, you know, I’m about the smallest business, right? I’m a small business owner. And I have to say, I never had it until I did what you would say something came up, right? It was something silly. It worked into my favorite no matter what and it was going to but it made me say, Oh, maybe I should have business insurance, just in case it doesn’t work in my favor again, or if this ever happens again. And certainly, it’s affordable, right? It’s so but people tend to not do it. Why?

04:56

Well, one is people don’t like to pay for the premiums of insurance if they don’t have to. Some businesses have insurance because there’s a regulatory scheme that requires that they have it. Like for a transportation company, obviously, they need some type of very large policy for their transportation business. But they don’t necessarily want to go out and buy pollution, legal liability policy, because it’s expensive. And ultimately, it’s not likely that they’re ever going to need it. But for a business, unless you’re not really dealing directly with the customer, you really do need to look at it and price out professional liability policy, because it’s an extremely important component of your risk management,

05:45

Right. And so now, the most the people that do have it, something happens, right. And now what,

05:52

Let me give you an example. So without using any names, I represented an employee benefits company. So what they did was they would go out to employers, and they would solicit their business, to provide them with rates from different carriers, for health insurance, for their 401k, and things of that sort of benefit to their employees. So this particular client also had been marketed by a third party to propose to their clients that there was an ability to take some of their payroll taxes and put it into some type of blind trust, that would not be taxed. And so it was a great benefit to the employer and to the employees, mostly management. Ultimately, what was discovered was that the IRS did not allow for such a policy. Whoops. So when there was an audit that the IRS performed on the client, and not my client but the other client, they discovered this issue, they required that the employer refund all of the money back and also had to pay fines, interest, and penalties. So you might imagine that that entity then went to my client, which had marketed the program and said, You told us that this was proper, we’d have no problem. Now we’re out $130,000, or whatever the number was, my client, fortunately, after meeting with me, we discovered that he had actually purchased Professional Liability coverage. And in that particular instance, it covered that particular claim, subject to the deductible. So rather than the client-facing significant exposure, the liability policy covered him in that particular instance.

07:45

Well, I think it really does come down to the policy, this is what we’ve talked about so much. And we’re going to talk about that in a minute, because I want people to hear what you have to say about that. But I also want them to also get your information, which is that you are rated with the Better Business Bureau, you do free consultations, here’s the number 602-566-7425. Now, this is the kind of thing where you know, it’s something where you need to write that number down and have it, it’s something that you might want to tell somebody about, because we never know, right? When something’s gonna come up like this, though, I do think and I’ve said this before, so I’m just gonna say to get people should talk to you also to understand their policy to know even if it’s, they’re properly covered,

08:30

right, if you’re in a particular industry, where you already know that you have substantial risk, you really should be speaking first with your broker. And then if you think you need legal advice, you really should do that, prior to purchasing the policy, that’s not true all the time, because you’re not going to want to pay a lawyer if you’re paying a $500 premium, that wouldn’t make any sense. But if you’re a small, medium-sized business, and the premium is more like $25,000 make certain that you’re purchasing the best value for that money.

09:04

Their phone number again, 602-566-7425 you could check them out on their website, it’s frlawgroup.com, before we go to a break, okay, I want to know what you want to talk about in terms of for anything else, like maybe a story or that you want to talk about for going forward? 

09:23

Yeah, so I think that the next subject, which will be interesting, is to talk about architect liability and the coverage that’s available.

09:31

Well, I’ll tell you what, we’re gonna go on a break. And when we come back, we’re gonna talk further. You know, I say this for every show, I love my shelf. And the reason why I love it is it’s this great information for people out there. You may be the person that needs it, somebody you know, may need it. That’s what networking is all about. And also, you know, it’s great information, you should write down everything that you hear for that really that you hear that might be applicable to you. So the number to call them again at 602-566-7425, it’s frlawgroup.com, we’re gonna go to break when we come back we’re going to talk further.

13:59

So welcome back everyone. If you want to watch us in here right now, you can go right on to networking, Arizona on Facebook, and watch us in here doing this show, live right now. I’m gonna go right now, talking with Troy Froderman. And he is one of the principals of FR Law Group. I, what I love about having you on too as well. I learned so much, you know about an area of our life, our businesses, especially business owners, and we have a ton of them that listen to this station. That you know certainly the information that you offer for people. You really need to make sure that not only should you be covered, but we talked about this to Facebook and that you want to make sure that you have a lawyer who specializes in that area.

14:51

Correct? We’re talking off air. I wouldn’t want somebody to come to me and ask me for tax advice on a legal issue, because I wouldn’t be qualified to do that. Likewise, most lawyers are not qualified to answer the legal insurance questions that we discuss on this program. There are a handful. Now everybody will say, well, it’s insurance. It’s, you know, how complicated it can be. Most policies are very complicated. Even the most simplest of policies have a lot of nuances and a lot of exclusions. And one of the things that we also were discussing off air is that, whether it’s the professional liability policy, whether it’s a cyber-related policy, a pollution policy, there are three things to bear in mind. One, not all policies are the same. Some policies are better than others, we have what’s called a manuscript policy, where the policy holder gets involved in drafting some of the policy language, because it’s unique to their specific industry, or space. And then others are just boilerplate policies. But even the boilerplate policies have different endorsements, different coverages. And so it’s very important to examine those policies to make sure that you’re getting the right one. Secondly, not all insurance brokers are the same, just like not all doctors are the same, not all dentists are the same, some are better than others. And it’s really important, not only that you have a good working relationship with the insurance broker, but that your broker knows your business, we’ve talked about that.

16:28

Right? That’s huge right there. Because there’s a lot of times they’re just in there, they will, they’re going to cover you here, this is what you need, they’ll send an email to you, boom, it’s done. No, you want to make sure they understand you.

16:39

Right. And, you know, I’ve seen some brokers who look like they just came from the fitness center, and which is fine, but they don’t really put the time and the energy that’s required to understand the business that you know, I might have, then the third thing to be aware of, and this is just as important as the first two is that not all insurance companies are the same. They’re all rated differently, you have a rated all the way down, but even some of the insurance companies that are universally known through commercials, and just because they’ve been around for a long time, they’re not all the same either, if you and I don’t want to go into denigrating any particular insurance company, but it’s very important to understand from your broker, the claims history with that particular unit of the insurance company, because you might be with a large loss unit. And that may not be that insurance company’s specialty, it may be something else.

17:40

Now, we talked a little bit to you about the different businesses that you work with and explained to them again, it’s a gamut.

17:48

It ranges, as we were saying, we have, I’ll just run real quickly through just as examples. Some of our clients on the insurance side include bakers, bankers, sports equipment, manufacturers, elevator companies, construction companies, and you know, we say construction, like that’s just one singular thing that runs the gamut as well. There’s really, I can’t sit here and say one particular industry that doesn’t need insurance, maybe the government but at times the government needs insurance. So it’s a universal need that everybody has, in this kind of sometimes, like talking about death and taxes. It can be kind of boring, but it’s not very boring when you need it.

18:34

No, not at all. As a matter of fact, the first thing you want to do is you’re going to say I’m going to call my lawyer. And well, Troy has been nominated as top insurance lawyer in Arizona, not just I mean, literally in Arizona. So that’s a lot of people that you came upon against.

18:51

Yes. And yeah, the nice thing about that is it comes from not just your peers, but people who you’ve serviced before and think highly of you, etc.

19:00

So the number to call them is 602-566-7425. They do free consultations, they’re rated with the Better Business Bureau. They’re located right here in Phoenix, but they can help anyone, anywhere. And you know, I say this sometimes for DUI attorneys, I put the phone number in your phone because you know, I’ve got to say this again for this because one of the things that we never know when something’s gonna happen, so we have the ability to put those numbers in, put it under attorney, insurance attorney, Troy, there you go. That’s a good one right there. You know for you to call them maybe it’s now maybe it’s sometimes at another time you never know when you’re going to need something like this. That number again, 602-566-7425 what else? 

19:51

I think the critical thing of this is if you walk away with nothing else, is that when you have a loss look at your insurance, see what’s available. Don’t just automatically think, which I’ve had recently with a new client. Oh, I can’t make a claim on that insurance policy, because then my rates are gonna go up. That’s one of the biggest fallacies. 

20:15

I’m so glad you said that. You know that because that is what people think is that oh, my gosh, I’m just gonna let it be. Because my insurance will go up.

20:23

And in the business arena, one reason why there’s that thought is on workers compensation policies, you get rated on what’s called an e-mod. And that really depends on the number of incidents and injuries that occur with your workforce over a period of time. But it doesn’t work that way, with a regular business claim. If that were the case, then there’d be no reason to issue and to read and to write a premium to an insurance carrier, you should just be self insured. At that point.

20:55

Does it matter what size of a case it is?

21:00

For FR Law Group? Well, it’s like everything else or risk benefits. For a client, if they have a relatively small loss, do they want to invest the time and energy because it’s not just paying the legal bills, but it’s a drag on your resources on your time. But you should still make the claim. The question is, if the insurance carrier denies the claim, then what’s your response?

21:29

We told a little story. The last time was about the brewery. Okay, so we did that. Why don’t you tell you another one for tape? Because it’s interesting. I like stories, you know, especially when it comes to this kind of stuff.

21:40

Yeah, so I had a client that was involved in making apparel down in Mexico. And the general manager for that particular plant in Mexico was embezzling funds, unbeknownst to the parent company here in Arizona. So eventually, it was discovered, and it was to the tune of several $100,000. The client initially was just going to write it off as a loss. They spoke with the broker, the brokers, when he came to me and said, Hey, you should talk to Troy, perhaps this is something that you have coverage for. And we looked at their program, and they had what’s called fidelity coverage. It’s basically a different type of business risk policy. And so we had the client tender the claim to a very large national insurance company, under the fidelity policy, it was initially denied. For a couple of reasons. We were able eventually after two letters, to get them to resend the denial, and then the client was compensated in full.

22:44

Their number again, 602-566-7425, it’s frlawgroup.com. They work nationwide, the radio with the Better Business Bureau. 

22:58

Vandalism is also another type of coverage that you can have under your property policy. And that tends to get very fact-intensive. Because the question is, is it vandalism? Or is it theft? And if it’s theft, then that’s a different coverage. If it’s vandalism, and it’s covered, generally, under your property, property policy.

23:21

But can it be both? I mean, somebody broke in it’s vandalism. And then they stole something, we had that happen, in fact, a client, why would they break in in the first place just for the fun of it? Sometimes. 

23:31

Well, so here’s one for you. It was an abandoned building that the client owned, it was unused. But he still was covering it with insurance because he wanted somebody to come in and rent the space. It was a fairly large space here in Phoenix. Somebody broke in and actually vandalized the inside of the building. But they also took some copper out of the building. Yeah, they want that. Yeah. So then the question became, what was the real damage? Was it the vandalism which was covered? Or was it just theft? Which was not?

24:05

Oh, wow. So it’s interesting that I love talking to you because it’s so interesting to me. You never know. That’s where this comes in. You write the number down. If something happens to you, call Troy his phone number is 602-566-7425. They do free consultations, they radio with the Better Business Bureau, they work nationwide. It’s frlawgroup.com. Real quickly, what’s your final words?

24:30

Happy Thanksgiving. Thank you.

24:32

Do me a favor, though. Put the number in your phone or if it’s not you, you want to tell somebody about it? Please do. That’s what this is all about. And I hope nothing happens to anybody that is for sure. But unfortunately, bad things happen to good people and it’s an accident. You never know when you’re going to need it. Again, that number is 602-566-7425.