“Tell me more about liability insurance” might seem to be an unutterable phrase for many people. But according to Rick Swedloff, associate professor at Rutgers Law–Camden, insurance is an omnipresent force in everyday life, especially legal life. As such, it’s a subject worthy of academic research and a subject that law students should study.
“Insurance isn’t a sexy topic, but most people don’t consider how it impacts their lives. They can’t drive a car, own a home, or in many cases, can’t bring tort or property claims, without insurance,” says Swedloff. “Insurance regulates our lives in ways we don’t even recognize.”
Just how legal malpractice insurers might be regulating aspects of the legal profession is an academic pursuit of Swedloff’s. He is trying to get a clearer picture of what’s happening in the realm of insurance and a changing legal landscape by interviewing dozens of brokers and underwriters and lawyers from top 100 law firms. Swedloff likens insurers’ potential influence on the legal industry to how homeowners insurance offers incentives to policy holders to lower premiums, like adding smoke detectors or security systems to their properties. Just how might legal malpractice insurers be incentivizing their clients?
“The practice of law is at an inflection point. Law firms are growing and changing quickly. The marketplace looks different today than it did 20 or even 10 years ago. Legal malpractice insurance offers one window into law firm life ,” notes Swedloff, who practiced as a litigation associate with Dechert LLP in Philadelphia, where he specialized in complex commercial, tort, and insurance cases before joining Rutgers. “Law firms today are undergoing major transformations and functioning more like corporations. Lawyers at large firms increasingly work in specialized practices with little opportunity to interact with each other.” One question Swedloff is researching is “whether insurers are helping to unify an increasingly fractured bar by becoming norm disseminators.”
Swedloff, who teaches Civil Procedure, Remedies, and Law and Economics at Rutgers Law–Camden, is also researching “big data’s” potential impact on insurer behavior. As insurers begin to use algorithms to sort through reams of unstructured data, there may be ethical implications and new mandates for regulation of the insurance industry.
“Certain groups always pay more for insurance than others,” Swedloff says. “Will insurers pricing insurance with big data burden some groups in ways we don’t think is correct? The analytics driving big data may not make it apparent who is being charged more or why. As a result, regulators cannot simply prohibit insurers from intentionally discriminating. They’ll have to determine first whether some groups feel a disparate impact, and then decide if that additional burden matters for a particular line of insurance.”
One particular community that is focused on the role of insurance and the law is the Rutgers Center for Risk and Responsibility, which hails from Rutgers Law–Camden, with Swedloff, Jay Feinman, distinguished professor of law, and Adam Scales, vice dean and professor of law, serving as core faculty. This year the center will host its third annual Insurance Scholars workshop on Sept. 12, and a conference on Feb. 27, that addresses the American Law Institute’s “The Principles of the Law of Liability Insurance.” The center is also looking to extend insurance course offerings to law students.
For Swedloff though, studying insurance is a satisfying entry point into understanding the law. He says it’s how people get what they want out of the system. “I’m less interested in how the world might work and more interested in how the world does work. Understanding insurance is often a key to understanding that distinction.”