CHICAGO--(BUSINESS WIRE)--
The Risk Control unit of CNA insurance companies recently released a
study that takes a look at lawyers and the practice of business
transactions, a diverse area that often involves drafting and
negotiating agreements and contracts. Based on claims from CNA’s Lawyers
Professional Liability Program, “Investigating the Hidden Risks of
Business Transactions Practice,” reports that the business
transactions practice presents greater professional liability risk for
attorneys than many other areas of practice.
Many solo practitioners and small law firms perceive business
transactions as a “safe” area of practice. However, the study indicates
that lawyers who report that business transactions represent only five
percent or less of their annual revenues account for the majority of
claims in this area. The study also reveals a significant correlation
between an attorney’s level of experience in this practice area in
relation to the frequency and related severity of such claims.
Developed by CNA Risk Control professionals – Gawain Charlton-Perrin,
Theresa Garthwaite and Joe Wolfe – the study is based upon an analysis
of approximately 1,000 closed claims, originating from business
transactions from CNA’s Lawyers Professional Liability Program.
Additional findings include:
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The leading cause of business transactions claims – the improper
preparation, filing and/or transmittal of documents – accounts for
more than one-third of claim volume. Failure to provide appropriate
legal advice, the second leading cause, represents approximately
one-fourth of these claims.
-
The cost to defend a business transaction claim is more than twice the
cost of claims resulting from other areas of practice.
-
Attorneys who dedicate more than 25 percent of their practice to
business transactions are less likely to have a claim asserted against
them. However, those claim losses are on average significantly more
expensive than those brought against attorneys who only dedicate 5
percent or less of their practice to this area of law.
The study concludes by offering a number of risk control strategies –
such as representing only one party in a business transaction – for
managing risks related to business transactions. Visit www.cna.com
to read
the entire study. For more information about the study’s findings,
please email lawyersrisk@cna.com.
Serving businesses and professionals since 1897, CNA is the country’s
seventh largest commercial insurance writer and the 13th
largest property and casualty company. CNA’s insurance products include
standard commercial lines, specialty lines, surety, marine and other
property and casualty coverages. CNA's services include risk management,
information services, underwriting, risk control and claims
administration. For more information, please visit CNA at www.cna.com.
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CNA
Media Contact:
Katrina Parker, 312-822-5167
Source: CNA