Lawcovernotes December 2020

Hands In The Till A practice has employed a new office manager. Over time, he creates fraudulent, third-party disbursement invoices addressed to the law practice for work supposedly done on its instructions. The officer manager transfers funds from the law practice account to a third party bank account as “payment” of the fraudulent invoices. The fraud is discovered during a general audit. For law practices with employees, LML insurance provides cover for direct financial loss sustained by the practice caused by an employee acting fraudulently or dishonestly. Crime investigation costs are covered up to $25,000.* Taxman A law practice receives a formal audit notice relating to a tax return lodged by the insured. LML insurance provides cover for costs of a tax agent or accountant in responding to a tax audit notice from the ATO.* The risks associated with managing a business are extensive, even in the most sophisticated of operations. This is no less true of running a legal practice. Management Liability insurance can assist in protecting against some of the key exposures that come with managing a business. Lawcover’s optional Lawyers Management Liability (LML) insurance offers cover designed specifically for law practices. How might your law practice benefit from cover under LML insurance? Consider the following scenarios. 6. Hard Day’s Night A law practice is investigated by the Fair Work Commissioner in relation to allegations made by various of its former employed solicitors that they were required to work extremely long hours without breaks and, consistently, without weekends or other days off. While any ensuing penalties and damages will not be covered in this case, defence costs may be considerable. LML insurance provides cover for defence costs as well as insurable civil fines and penalties.* Careless Whisper A law practice jointly occupies a building with a catering business, with which it has a longstanding, good relationship. The insured agreed to advertise the catering business via emails to current, former and prospective clients whose details are held on its database. An email recipient complained to ACMA about the “spam”. The law practice was investigated under the Spam Act for unsolicited commercial electronic messaging. LML insurance provides cover for statutory liability, include costs of defending regulatory investigations.* A Little Help From My Friends An employed solicitor complains repeatedly of his excessive workload and having to compensate for an underperforming colleague. Despite best intentions, the complaint is not addressed as the managers are too busy. The solicitor resigns and lodges an unfair dismissal claim contending he was constructively dismissed. For firms with employees, LML insurance provides cover for employment practice breaches such as unlawful termination, demotion, failure to promote or refusal to employ, as well as unlawful discrimination and breach of employment contracts. Cover is available for defence costs.* Lawyers Management Liability Insurance Have you considered Lawyers Management Liability Insurance cover for your law practice?