Law firms, like many commercial and professional enterprises, look to develop business relationships in other countries. Along with that expansion, firms must confront an ever-evolving variety of practical and professional responsibility challenges; they must also be mindful of changing regulatory priorities within each country and/or province. Regulatory changes impact a host of operational issues and a firm’s professional liability insurance program is one important component in this evolution.

In particular, many non-U.S. jurisdictions impose requirements that have specific impact on firms practicing outside the United States. Historically, regulators have been largely ambivalent about the structure of insurance programs as respects professional liability responsibility, instead espousing the importance of having solvent funds or insurers to backstop any liquidity risks from law firms. However, regulators around the world continue to require firms to ensure that their liability insurance is compliant with local regulatory expectations.

Regulations addressing local insurance requirements differ from place to place (and can frequently change). As a result, firms operating across jurisdictional boundaries must be cognizant of local requirements.

With this as the backdrop, the following illustrates a
few issues in two jurisdictions to highlight the importance of adhering to local requirements and ensuring that local coverage is properly coordinated with the global master program.