Premium Rates FAQs
In 1993 the Alabama Legislature enacted the Limited Liability Company Act which allows a member of a limited liability company to be liable for a "negligent or wrongful act or omission" in which he personally participates as though he were a sole practitioner (§ 10-12-45). If attorneys practice in an LLC, will that reduce their malpractice premium rate?
Probably not. LLC acts are still largely unconstrued by appellate courts due to their recent enactment in most states which have them. The practical effect of the protection purportedly afforded under an LLC statute is yet to be determined. In any event, it is clear that an individual attorney who is alleged to have committed malpractice under an LLC must still be defended and/or indemnified. Where more than one attorney in an LLC participates in a case or transaction, it is likely that all participants will be the object of suit. Whether, in theory, one attorney is the focus of a suit or whether all attorneys in a firm are, it is doubtful that the LLC act will decrease insurance exposure. AIM will, however, watch this matter carefully. As a mutual insurer, AIM is committed to fair and reasonable premium rates. If it becomes possible to reduce the cost of malpractice insurance for attorneys practicing in LLC's, AIM will do so.
Will my premium rates be stable?
Practicing attorneys want stability, and AIM provides that. Premium rates are based predominantly on AIM's usually favorable malpractice claims experience. With AIM you know that your mature premium rate will be stable. It even rewards insureds with an additional loyalty premium credit.
Will my premium go up if I report a claim?
Probably not. In most cases, the premium will not increase due to reporting a single claim. Underwriting will evaluate the frequency and severity of multiple claims reported to determine whether an increase in premium is warranted or whether insurance can still be offered.