The Law 2/2007 on professional societies governs this type of company, which regulates doctors, lawyers, architects. The eternal doubt, which clients always ask us, is whether they really need this policy, having already, as they are obliged to do, an insurance for lawyers individual. We will now look at what the law and the policy conditions state.
The regulations applicable to professional companies - Law 2/2007
When acting and invoicing through a company, we must be aware that we are talking about independent bodies (me, the lawyer, and my company). In this way, a client who considers that the work has not been carried out properly, I could claim both myself and my society. All the more so if I have employees and they are the ones who could be negligent.
The Article 11 of the aforementioned Law, states with regard to the debts that the company may incur:
Of the social debts arising out of the professional acts themselves the company and the professionals shall be jointly and severally liable, partners or not, who have acted.
In other words, the partners and professionals of the law firm are also personally liable for these obligations.
But, what is even more emphatic, in its 3rd paragraph it says:
Professional societies must provide for insurance covering the liability they may incur in the exercise of the activity or activities constituting the objects of the company.
Is it common for companies to be sued?
In recent years, the claims and claims ratio for professional indemnity insurance has risen sharply.
In this environment, there has also been an increase in complaints against companies for these reasons:
- In many cases several people are involved of a company, when carrying out a job.
- The perceived creditworthiness of a company, is higher than that of an individual person
At the same time, we have already spoken about the essential insurances for a company, and this liability insurance was one of them.
What happens if my company does not have insurance and I receive a claim?
There are two possible situations:
- There are occasions when the individual policy offers an extension of cover towards the company. In other words, certain events could be covered, although it will always be much better to have a separate policy for society, as there are gaps in coverage to that extent.
- Yes we do not meet the extension requirements, When the individual policy is claimed, the insurance company will tell us that the company is not insured under the insurance policy. In this case, it will not even cover the costs of legal defence in the proceedings.
Our advice as a brokerage firm specialising in lawyers
Faced with such a clear demand from the Law 2/2007 In view of the need to take out professional indemnity insurance, and the possible consequences of not having it and becoming personally liable for the debts incurred by the company, we strongly recommend that you take out insurance in the name of the company.
Currently, there are insurers that specialise in insurance for lawyers. Moreover, thanks to the competition in today's insurance market, rates are not what they used to be (from 200 euros you can find a complete insurance). Ask us and guarantee your peace of mind against possible claims. We will advise you on the sum insured and the cover you need.
