Liability insurance broker shutters suddenly, leaving lawyers in lurch – Rhode Island Lawyers Weekly

The Rhode Island Department of Business Regulation is actively investigating a widespread liability insurance scam affecting attorneys throughout New England states, a spokesperson for the department confirmed, declining to comment further.

However, some intended lawyer-victims told Lawyer's Weekly that they are taking their issue in stride.

Not only did the alleged perpetrator choose his targets unwisely—lawyers are uniquely equipped to use the law to fight—but, at least in Massachusetts, state law provides some degree of protection, even if some insurers May have been slow to recognize it, say those who are affected.

Yet, a sudden, retroactive notification from Fairhaven-based BL Insurance Brokerage that it was “permanently closed” effective March 1 – and the subsequent realization that the lawyers’ premium payments might never have reached their insurers, led to Their policies came to the brink of being canceled – sending countless lawyers into conflict.

At least one complaint has been filed in New Bedford District Court in Massachusetts against BL and its principals, Brandon and Lisa Lawler of Fairhaven. The plaintiff is a Maynard law firm that paid BL $16,754 late last year, but discovered in March that the funds never reached the insurance company.

Any other lawsuits will join the lawsuit filed Jan. 3 in Allen County, Indiana, by Attorney Protective, or AtPro, a Fort Wayne company that underwrites, markets, services and administers professional liability insurance and related coverages. Does.

AtPro alleges that BL collected more than $155,000 in premiums from its insureds but failed to repay the payments. Given that policies for solo practitioners average around $2,000 annually, AtPro's claim suggests that several dozen of its clients alone have been affected.

In Massachusetts, the state public defender agency, the Committee on Public Counsel Services, was so concerned about the situation that it sent an advisory to its affiliated attorneys on March 7, urging them to start calling to make sure That their coverage remains effective. Report any problems to CPCS.

CPCS suggested that, if circumstances warrant, attorneys can file online complaints with the FBI's Internet Crime Complaint Center and state insurance fraud bureaus.

Given the number of complaints already made to local and federal authorities, many speculate that the Lawlers will also face criminal charges soon.

For some, a shocking twist

The complaint filed by Maynard's Hera Law Group in New Bedford District Court shows how alarmed some lawyers were over BL's sudden dissolution.

In her affidavit accompanying her firm's lawsuit, owner Melissa A. Levin-Piro noted that BL has been Hera Law Group's malpractice insurance broker for nearly 10 years.

In fact, Brendan Lawler personally had been a great source of support over the years, answering her questions when she was out on maternity leave as a self-employed lawyer, Levin-Piro said. .

Levin-Piro said that when she last spoke to Brandon, he reassured her that any rumors she was hearing or seeing in messages posted to listservs about her company being in an unstable state. Yes, they are not true.

Hera Law's malpractice policy is renewed each year on January 15, but Levin-Piro said she likes to include the expense on her firm's books before the end of the calendar year. As per their usual practice, they started the renewal process for 2024 in November.

Levin-Piro exchanged emails with Brendan Lawler on 27 and 28 November and by 30 November his firm had a quote for the cost of the 2024 policy and instructions on how to support the policy. Lawler cashed a check for $16,754 written to BL Insurance Brokerage on December 7.

When, in late January, Lawler sent Levine-Piro the third-party binders and her firm's fully endorsed policy for her firm's records, nothing seemed amiss, she said.

But then on March 7, someone posted an email they received from Lawler on the listserv, informing them that BL had closed forever just six days earlier. Levin-Piro said she did not receive the email, despite being a BL customer.

The email began, “I am emailing you to inform you that I have permanently closed BL Insurance Brokerage, LLC, effective 3/1/24.”

The email claimed that all BL customers' policies would be transferred to another agent or broker “by the insurance company that wrote your policy.”

Customers were instructed to contact the insurance company or the wholesale agent listed on their policies with any questions.

After thanking customers for their “years of patronage,” the email concluded, “Please be informed that any phone calls or emails to our office will not be returned, as I am no longer in business. Any I am sorry for the inconvenience.

I am emailing to inform you that I have permanently closed BL Insurance Brokerage, LLC effective 3/1/24,'' the email began.

Lawyers Weekly attempted to contact Lawler via his business email address and received an auto-response: “We are sorry but our office is permanently closed. This email has been closed and we will not be able to respond to any enquiries.

Lawler did not respond to a message sent to his personal email address, and no one answered calls to the business's phone number.

The shield of law is not a panacea

Still, Levin-Piro felt he was in the clear. After all, he appeared to have legitimate documents in his hands. Still, for peace of mind, he had his office call his malpractice insurance carrier to verify that the firm's policy was in good standing.

Only then did she learn that, as far as the carrier, Arch Insurance, was concerned, the premium payment was overdue, and if payment was not received by March 16 the policy would be canceled.

In addition to reaching out to New Bedford District Court with the claim against BL, Levine-Piro emailed her contact at Arch to remind the company that GLC 175, §169 reads: “An insurance agent or broker other than his Working for someone else.” In negotiating, continuing or renewing any policy of insurance or any annuity or net endowment contract, shall, for the purpose of receiving any premium, be deemed to be the agent of the company, notwithstanding anything contained in the policy or contract. Conditions or covenants may be included. ,

In other words, Massachusetts law treats payments made by Hera Law to BL as payments directly to Arch, meaning Hera's premiums must be considered paid in full as a matter of law, even if Arch has not received payment.

Levin-Piro said other affected attorneys she has spoken to have had their insurers acknowledge that their coverage would remain in effect even if they had not been paid by BL.

But for whatever reason, Arch has been slow to accept the legal reality, instead demanding that Hera Law pay a second time for essentially the same coverage, Levin-Piro said.

Levin-Piro said that if she had to, she would reluctantly sue Arc under the state's consumer protection law, GLC 93, and “at least break even” by recovering triple damages. But she said she would prefer to resolve the matter amicably, with the company accepting the implications of state law.

In addition to filing the lawsuit and reaching out to her insurer, Levin-Piro said her company filed a police report to cover all its bases.

Levin-Piro said she's trying to maintain a sense of humor about the whole mess, confident that her legal training will ensure that her firm somehow remains intact.

“This is a foolproof demographic to scam,” Levin-Piro said.

Andover, Massachusetts attorney Linda A. O'Connell is also trying to resolve issues related to a payment of more than $2,100 made to BL in February for a policy that was renewed on March 1. Like Levine-Piro, O'Connell said she had been working with Brendan Lawler for about 10 years before her most recent payment did not reach her insurer, Hanover.

O'Connell said Hanover insisted she pay a second time to avoid cancellation, so she continued paying the minimum — $430 — to make the company shine on the law.

“The ball is in their court now,” he said.

Didn't find out for some time?

Although not personally affected, Acton, Massachusetts attorney Lisa McKinney said she began looking into BL Insurance in January when she received a letter from her insurance carrier that “wasn't right” because it seemed like That it was motivating them to use it. Special broker in place of Lawler.

While she said she will leave it to investigators to definitively establish the facts, she believes she will be able to determine where at least some aspects of BL's apparent scam worked by December 2022. Were doing and can go back to the beginning of the COVID-19 pandemic.

In addition to allegedly maintaining the lawyers' premium payments, McKinney believes that Brendan Lawler may have been artificially inflating the rates on the quotation sheets when the lawyers' policies came up for renewal, so that This can always be presented to justify the transfer of lawyers from one insurer to another. This may not be the case when it is in the best interest of the customer, he said.

When the dust settles, McKinney said he suspects hundreds if not thousands of lawyers may be affected, although many may remain unaware of issues with their policies until they take proactive steps to discover them. Pick up. He said BL Insurance was active in nine other states beyond Massachusetts and Rhode Island, including Connecticut, New Hampshire and New York.

The CPCS advisory notes that some small, independent insurance agencies use wholesaler agents such as BL to obtain malpractice policies for their attorney clients in situations in which the independent agent does not have direct access to the malpractice insurance market. Doesn't happen.

The notice reads, “Since BL is an insurance wholesaler, it is possible that some policies obtained through other insurance agencies may have originated from BL Insurance, even if BL is not listed on your certificate of insurance.”

CPCS suggested that lawyers confirm with their agents that their policy was not obtained through BL Insurance or check their policy's “declarations page” to determine that BL was the wholesale agent for obtaining the policy. Or not.

McKinney said the state Insurance Department should have known about complaints about BL by last summer.

Like its counterpart in Rhode Island, a spokesperson for the Massachusetts Insurance Division acknowledged that the division had an open investigation into BL, but declined to comment further.

McKinney believes the Fairhaven Police Department also knew about the Lawlers' alleged misdeeds. But his efforts to learn more from police are being hampered because his public records requests have been denied by the department, citing investigative and CORI exemptions under the state public records law, he said.

One of McKinney's disappointments is that BL's operating license remained in good standing until the company's final days, when it seemed there was sufficient reason to suspend it pending the outcome of an investigation that could potentially have saved some victims. Was.

“I definitely feel like the warning signs were there,” he said.

McKinney said the question also needs to be asked of insurance companies: “What did they know, and when did they know it?”

McKinney said he sent a demand letter to BL in February as an initial step under GLC 93A and 176D.

In addition to taking on the role of counseling Lawler's apparent victims, McKinney said she is collecting information and data that she hopes will help those victims seek justice.

“The hard thing is that everyone has been harmed in different ways,” she said.