Tuesday, October 17, 2017
Tuesday, October 10, 2017
What the legal malpractice rules require
What triggers a reporting requirement?
Effect of an attorney’s failure to report misconduct of another
Obligation of legal malpractice plaintiffs
Skills required of legal malpractice defense counsel
Wednesday, October 4, 2017
Sunday, August 13, 2017
New accounting standards proposed by the Financial Accounting Standards Board scheduled to go into effect for the 2019 fiscal could affect how commercial leases are structured. As an executive or house counsel, if you are not aware of the changes or thought there was plenty of time to make your company compliant, time is running out. The new FASB standards cause dramatic changesto generally accepted accounting principles(GAAP) applicable to leases.
Current GAAP for finance and operating leases
There are two types of leases: Finance leases and operating leases. Each of them is currently being treated differently under GAAP. An asset acquired under a finance lease is deemed owned by the lessee. The payments made under the lease are shown as liabilities in much the same way as payments on a loan for accounting purposes. Accounting principles treat finance leases as the financing vehicle by which your organization acquires assets.
In sharp contrast to finance leases, operating leases are the means by which a lessee acquires the ability to use an asset without claiming any ownership rights to it. Accountants applying current GAAP rules report operating lease payments on a company’s income statement, but they do not include the payments or the value of the asset on its balance sheet.
Identifying a lease as either a finance lease or operating lease is accomplished by looking for the following four characteristics of a finance lease:
- End of term transfer of ownership to lessee
- Purchase option
- Economic life and lease term are the same or close to being the same
- Lease payments and residual value of the asset as reflected in the lease equal or exceed the value of the leased asset
How FASB changes affect GAAP beginning in 2019
Known officially as “FASB Accounting Standards Update No. 2016-02, Leases (Topic 842),” the new rules require recognition of operating leases on balance sheets and income statements.
Both operating leases and finance leases must be reflected on a company’s balance sheet under the new FASB rules.
The value of the asset and the payments made under the lease must be reported on a company’s balance sheet under the new standards. This is an oversimplification because the new FASB rules require special treatment by accountants for common lease provisions, including:
- The additional payments generated by options to extend the lease must now be accounted for in advance by anticipating whether it is likely to be exercised
- Leases with cost of living or other adjustment clauses are subject to new accounting principles
- Leases with options to purchase granted to the lessee are subject to addition rules and accounting principles
The complexity of the process of gathering the information needed to comply with the new GAAP under the changes approved by FASB requires immediate action by companies and their accountants and legal counsel. Publicly traded corporations must meet the new standards for all filings made after December 15, 2018 and for other companies beginning a year later.
Role of outside counsel helping companies comply with FASB standards
Companies with leased assets will need guidance and legal advice from attorneys knowledgeable in commercial real estate law to review leases to determine how they are structured in order to assist in mining the data required to properly report the assets and liabilities associated with them. The business law and commercial real estate law attorneys at McKenna Storer provide superior advice and representation in lease negotiations and reviews. For additional information about this topic, please contact them to schedule an appointment.
Tuesday, July 11, 2017
Accountants, attorneys and doctors are the professions that usually come to mind when people talk about professional liability insurance. Other professions, such as real estate brokers and agents, insurance brokers, and consultants should also consider obtaining coverage to protect them in the event of negligence, good faith violations and other claims by the people to whom they provide services.
Coverage provided by professional liability insuranceBusinesses and professions holding themselves out to the public as experts in a particular field, such as law and medicine, are held to a standard for their particular profession. The standard could be set by law, by the industry or profession, or by the contracts under which a professional’s services are offered to a particular client. If the professional’s performance is below the standard, he or she could be sued for damages.
Professional liability insurance generally covers a business or professional for mistakes, omissions and negligence that result in financial harm to the client. For example, the failure of a professional to complete services for a client or completing them in a negligent manner could result in a claim for which an insurance policy would provide the following coverage:
- Costs associated with investigation of the claim
- Litigation defense costs, including attorney fees and court costs
- Payment of the claim through settlement or after verdict
Professions benefiting from liability coverageLiability insurance for professionals goes by several names including, malpractice insurance and errors and omissions insurance. Included among the professions for which coverage is recommended are the following:
- Financial advisors
- Graphic designers
- Software developers
- Real estate agents and brokers
- Insurance agents and brokers
Types of insurance liability policiesCoverage is offered as either a claims-made or occurrence policy. Claims-made policies are the most common, but coverage is limited to claims arising and filed during the period in which the policy is in effect. Occurrence policies cover events taking place during the effective dates of a policy even if the lawsuit or claim is not filed until after coverage lapsed.
Occurrence policies might benefit individuals leaving a particular profession through a career change or retirement because claimants might have time under a state’s statute of limitations laws to file a claim exceeding the effective dates of the policy. For instance, Illinois gives people at least two years to sue for malpractice, so a claim could be filed after a policy has lapsed. If the professional had a claims-made policy, he or she could be without coverage.
Our attorneys can helpThe attorneys at McKenna Storer provide professional liability defense and insurance law representation to for doctors, lawyers and other professionals. For additional information about this topic, please contact them to schedule an appointment.
Friday, June 2, 2017
1. Advise you about the types of medical malpractice policies and coverage parameters
A medical malpractice claim against any health care professional or healthcare facility for could require an interpretation and explanation of the policy coverages. It's not unusual for a health care provider lack complete understanding of the coverage types and limitations of their malpractice policy or professional liability policy, especially when that policy is purchased by their practice,
Claims-made and occurrence are the two types of policies offered by malpractice insurance carriers. A claims-made policy insures against claims made from incidents occurring while the policy was in effect. Both the reporting of the claim and the incident must occur while the policy is active. Once the policy lapses or is cancelled, the coverage ceases to exist.
Unlike a claims-made policy, occurrence policies insure against claims arising from incidents that occurring during the effective term of the policy. A claim filed after a policy lapses or is cancelled would still be covered provided the incident arose while the policy was in effect. The date a claim is actually reported is irrelevant because coverage is determined by the date of the incident.
2. Review insurance applications for malpractice coverage
The information you furnish on an application for insurance should be reviewed by insurance counsel to ensure it is accurate and complete. If you fail to include information on your insurance application about any known incident that could lead to a claim or regulatory action, such as enforcement actions by the Illinois Department of Financial and Professional Regulation, they could later become the basis for a denial of coverage by the insurance company. Application review by experienced insurance counsel and identify potential problem areas, including omissions, before submission to the carrier and prevent coverage issues from arising in the future.
3. Helping to identify medical malpractice risks
A law firm well-versed in the nuances of medical malpractice and insurance law can help you identify and control areas of potential liability through risk management reviews, including:
- Proper documentation of patient care
- Obtaining informed consent for all treatment and procedures
- IDFPR licensing and regulatory compliance
- Meeting the standard of care required of the specialty when rendering services
Our medical malpractice attorneys can help
The attorneys at McKenna Storer provide medical malpractice defense and insurance law representation to physicians, nurses, hospitals and other health care providers When you’re looking for attorneys with that understand the defense and prevention of medical malpractice and negligence claims, or would like additional information about this topic, please contact Mckenna Storer or check out Medical Malpractice services on our website.
Thursday, May 4, 2017
If you are a general contractor or the owner of a business associated with the construction industry, you might believe you only need to hire an attorney whose area of practice is construction law once a lawsuit is underway. In truth, litigation representation is only one of the many services a construction attorney provides. Knowledgeable and skilled legal representation can anticipate potential conflicts and help in avoiding construction litigation by offering practical strategies and solutions.
Construction projects require more than a handshake
The days when developers began projects based only on trusting in the reputation of the other parties are long gone. Public and private construction projects are complex undertakings requiring detailed contracts and other documents containing the terms and conditions under which the parties will operate, including the following:
- Detailed descriptions of the responsibilities and obligations of each party to the agreement
- Terms under which payments are to be made
- Completion schedule and provisions in the event of delays
- Insurance requirements
- Risk assumption and provisions for the shifting of risk between the parties
- Indemnity clauses
- Process and procedures for dispute resolution
- Penalty provisions for failure to meet completion deadlines and other contractual duties
An attorney knowledgeable about the construction industry understands that negotiations undertaken before the commencement of a project must take into account all aspects of the parties’ relationship. Incorporating the results of those negotiations into a written agreement gives the participants a clear set of guidelines under which to operate and, in the event disagreements arise, a method of resolving them without resorting to litigation.
Contracts are not the only documents attorneys draft and review for their construction industry clients. Documents related to transactions for the purchase, sale and financing of commercial and industrial real estate should be reviewed and, when necessary to protect the client, negotiated and redrafted.
Representation when avoiding construction litigation is impossible
Despite your best efforts, your company could find itself in court. The construction industry in Illinois must navigate through countless state, local and federal regulations, including OSHA, environmental restrictions and non-discrimination rules. Engaging the services of an attorney to interpret the regulations and to help develop a plan for compliance also ensures that you have legal representation ready in the event of accusations of a violation.
Other litigation that might arise for which legal counsel could benefit your construction company includes:
- Surety claims
- Mechanics liens
- Insurance claims and issues
- Warranty and damage claims
- Contract enforcement
- Construction defects
Engaging the services of a law firm capable of providing your company with a variety of construction law services ensures you of litigation counsel who is thoroughly familiar with your company.
Getting help when you need it
The construction lawyers at McKenna Storer offer all of the services general contractors, insurance carriers and others operating in the construction industry may need. Contact them today for more information and to find out what they can do for you.