Professional Liability Insurance for Lawyers

Professional Liability Insurance for Lawyers

As a dedicated legal professional with superior attention to detail, the last thing on your mind when you open your private practice—is that you will find yourself in the role of the defendant. Currently 3 to 5 percent of all private practice attorneys are faced with a malpractice lawsuit each year. Attorneys working in large firms average 1 to 3 malpractice suits during their career. These numbers skyrocket for attorneys working in high-risk practices.

What Is Legal Malpractice?

Legal malpractice occurs when an attorney’s negligence causes a client legal or financial damages. There is no field of law exempt from malpractice, but a few where it is more common—such as personal injury or high stakes business and real estate. The negligence does not have to be blaring or intention to be damaging:

  • Missing a calendar deadline or statute of limitation.
  • Failure to secure adequate witnesses.
  • Failure to secure expert witnesses.
  • Being underprepared to present a client’s case.
  • A case was dismissed by attorney error.
  • You or your team making an honest mistake.
  • A mistake identified by your clients next attorney.

Malpractice Minimum Requirements

Most jurisdictions require attorneys to obtain professional liability insurance. However, just like car insurance, the minimum requirements are rarely enough. Use your legal prowess to read the coverage terms fine print, and ask pertinent questions. This includes annual cost, deductibles, and coverage terms per claim and aggregate. Take your time in selecting a provider, and look closely at no less than three. Feel free to ask other attorneys who their legal liability insurance is though—and pay close attention to feedback from lawyers who have had to file a claim. Even if you are just starting out, this is not an area of your business to attempt to minimize costs.

Understand How to File A Malpractice Claim

Your gut response may be to attempt to resolve the situation yourself; that is what you do for a living after all. However, it is essential that your malpractice claim is filed in a timely manner—ideally as soon as you are aware there is a problem. As the saying goes, “better safe than sorry,” as you want to provide your liability insurer with ample time to prepare.

Also keep in mind that in most cases, it costs more to attempt to litigate your claim than to allow your insurance provider to handle it. Even if your premiums rise a bit next year, you will save yourself valuable time and money by letting them do their job. Besides, that is what you are paying them for.

Finally, not every malpractice or legal liability suit is legitimate. As you also know, it won’t stop everyone from moving forward with a malpractice claim. Why? Because suing someone can sometimes provide a false sense of power. With that being said, if something does fall through the cracks, and you realize you are indeed liable, quality legal liability insurance is a must-have product.