Insurance

Insurance

Professional indemnity and commercial insurance

Claire Bowler is head of the insurance sector and Sarah McKay is an associate solicitor in the professional indemnity and commercial insurance practice group at DWF LLP in London

Insurance is risk management: protection against financial losses from risks we run every day in personal life and business. Insurers provide financial compensation for the effects of misfortune to their policyholders (known as ‘insureds’). Insurance allows businesses to thrive and economies to grow. Without the safety net of an insurance policy being in place against the risk of goods in transit being damaged, a cyber security breach or a negligence claim brought against them by a third party, businesses would not transact on the same scale and with the same spread of people. Indeed, insurance touches each of us in our daily lives, be it for our car, home, holiday or while at work. A modern society simply could not function without the benefits and the safety net that insurance cover brings.

The practice of an insurance lawyer is extremely diverse and will often encompass both contentious and non-contentious work. DWF has one of the largest specialist insurance teams in the UK and acts for many of the world's leading insurance companies, providing contentious and non-contentious advice in both the public and private sectors.

What is commercial insurance?

Put simply, commercial insurance is insurance which protects businesses against losses they may incur as a result of unforeseen events such as theft, property damage, employee or third party injury and legal action. There are many types of commercial insurance policy and those which a business has will depend on its needs. Some of the main types of commercial insurance policy are: public liability, employer's liability, and product liability insurance. Cyber liability insurance has become increasingly important to businesses in recent years, to protect them from losses caused by IT security breaches.

What is professional indemnity insurance?

Professional indemnity insurance is a type of policy required by anyone providing a professional service, be they lawyers, accountants, doctors, architects or surveyors. It is designed to cover claims of negligence when the advice or service provided by the professional fails to meet a client's or patient's expectations.

Day-to-day work

The role of any insurance lawyer is very varied, even within specialisms such as professional indemnity. On the non-contentious side they might be involved in advising an insurer on the drafting of a new policy or on a coverage issue. Coverage points can become contentious if there is a dispute between insurer and insured over the interpretation of the policy. Insurance disputes can often be complex and sometimes cross multiple jurisdictions. In such cases an insurance lawyer will likely be working as part of a team with other lawyers and possibly specialist counsel to resolve the dispute for the client.

Where the dispute is between the insured and a third party, the insurance lawyer's role is to defend the claim. In that sense, it is essentially the same role as any commercial litigator. Day-to-day tasks will include: collating, reviewing and analysing evidence; drafting key documents such as letters of response and witness statements; conducting negotiations; instructing counsel and experts; and attending court. However, the key difference, which is perhaps unique to the insurance lawyer, is that they are representing two clients – the insurer and the insured. This means they must often report to and take instructions from both clients and be adept at facilitating an agreed case strategy between the two.

Insurance lawyers are also responsible for business development, which includes maintaining relationships with existing clients and developing relationships with new clients. Business development may include writing articles and hosting client seminars on key developments in insurance law and practice. However, more importantly, business development also encompasses talking to clients about their business issues (which might not necessarily be case-related) and helping them navigate through these in a commercial way, so as to help cement an important relationship of trust between client and advisor.

Key skills

Commercial awareness is essential when acting for insurance clients. There are often opportunities for junior lawyers in private practice to be seconded to an insurance company, which provides them with an invaluable insight into the insurance market.

When representing an insured, for example in a professional negligence claim, the lawyer must also develop a thorough understanding of the insured's business and be sensitive to any reputational issues. They must be good communicators, able to pitch their advice at the right level, whether the client is a multinational organisation or a sole practitioner. Insurance lawyers also have to be fast learners, quickly getting to grips with the underlying subject matter of a claim.

Although the working hours of an insurance lawyer are not usually as demanding as those of a corporate lawyer, they must be able to work under pressure to tight deadlines, particularly where there is a court timetable.

What does the future hold for insurance law?

This is a challenging but exciting time for the insurance industry, with the development of new technologies (called 'insurtech') transforming the way insurers transact their business. Insurance lawyers must therefore adapt to meet their clients' developing business needs. DWF has created a unique offering for its clients called Connected Services. Connected Services is a division of DWF containing a range of independent businesses that work alongside, support and deliver products and services to our legal teams and clients. Each of the businesses offers a complete service designed to help clients better manage risk, reputation, cost, time and resources.

DWF LLP

We are a global legal business, transforming legal services through our people for our clients. Led by managing partner and CEO Andrew Leaitherland, we have offices in 27 key locations in four continents and over 2,800 people delivering services and solutions that go beyond expectations.

Named as one of Europe's Top 20 most innovative legal advisors, we achieve outstanding levels of innovation.

For further information about the firm, see www.dwf.law

We are a global legal business, transforming legal services through our people for our clients. Led by managing partner and CEO Andrew Leaitherland, we have offices in 27 key locations in four continents and over 2,800 people delivering services and solutions that go beyond expectations