Suppose a client threatens to sue you.
Suppose you feel you did nothing wrong.
The client asks you to pay them $100,000.
Your insurance company takes over the negotiation.
They agree to settle for a $40,000 payment.
Why do they settle?
Because your insurance company doesn’t want to pay months of lawyer fees. Also, they don’t want to force you to go through months of hearings, discovery, and court appearances – and possibly to go through a humiliating public judgement against you. If any of that happened, you might get upset and find another insurance company.
So they settle.
Then, next year, because of that expensive settlement, your insurance premium rises from $8,000 to $10,000, and it will never go back down.
What if that could be prevented?
Suppose expert determination were required in your client agreement. Then there would be no lawyer fees. Instead, an expert would be paid a small amount to determine the facts. And the losing party would pay their cost.
Suppose then the client asked you to pay them $100,000 in damages.
Your insurance company would say, “No, let’s go through the expert determination process.”
The expert would agree with you — because you did nothing wrong. The client would be required to pay for the expert. And you would be completely off the hook.
If this is new to you, expert determination is based on state-level statutes, which you can Google.
But your insurance premium would not go up because you didn’t pay a settlement.
Book a time with me. Talk to you soon.