Lawyers fight tooth and nail for their clients in the courtroom, but sometimes things don’t go how they are supposed to be. It can make the client upset. Now imagine if in this situation the client lashes out and threatens you with a malpractice lawsuit. In this situation, your legal reputation, law career and finances hang in the balance.
This scenario can be stressful for any lawyer, and this is not uncommon in the legal industry. Lawsuits regarding legal malpractice are real and can cause havoc in lawyers’ lives. This is why it is important to have legal malpractice insurance. It is necessary and can be helpful during challenging days. This blog is your guide to legal malpractice insurance, so stick till the end to learn all the important factors about legal malpractice insurance requirements.
6 Factors to Consider While Buying Legal Malpractice Insurance
If you are planning to get legal malpractice insurance for your firm, it is important to consider a few factors that we have mentioned below:
1. Find the right insurance provider
It is important to find the right legal insurance provider. You can’t just go with the first name that pops up in your mind. Most of the attorney malpractice insurance providers are jurisdiction-specific. Find the legal malpractice insurer authorized to provide coverage against claims in your state or province.
You are practicing in the US. Finding the right insurer for professional liability is an easy task, as The American Bar Association provides an updated directory of professional liability insurance providers. Not just that, you can also refer to the local, state and practice area bar association for law malpractice insurance providers. In this way, you won’t get stuck with the wrong provider and get insurance for the trusted source only.
2. Know what your legal malpractice insurance policy will cover
Not all insurance providers are the same, every policy can be different. So it is important to understand the specific needs of your legal practice. Every coverage is different, but some of the common claims from which your insurance should be protecting is:
- Negligence in legal advice
- Failing to communicate
- Missed legal deadlines
- Breach of duty
- Conflicts of interest
You need to ask a few questions that will help you understand your policy coverage, such as:
- Is your policy covering claims from professional activities undertaken before purchasing your current policy?
- Can your policy protect you against cybersecurity provisions and data breach?
- Will your policy cover claims relating to pro bono services or solo volunteer legal work?
- What about coverage for claims reported after the policy has expired?
3. Ensure that you are choosing your legal malpractice insurance carefully
While applying for the insurance, most of the insurers ask for a detailed application, so make sure that you carefully submit that. Don’t fill your application indiscriminately. Because your application can work as a warranty or representation of an insurance contract, it is important to mention all the necessary details.
Don’t just hastily submit anything, recheck your details and know what you will be getting. Else you will end up with a higher rate of insurance. Additionally, you might also end up missing out on future coverage.
Here are a few questions that can be the part of your insurance application:
- What is your legal practice area?
- Since when have you been practicing law?
- Do you have any law malpractice insurance already?
- Have you had client disputes or malpractice claims in the past?
- Does another insurer cover your current cases?
4. Be informed about your coverage starting date
Be careful or else your start date won’t align with when you need protection. Don’t rush to take a case first to get your legal professional liability in place. Be clear with the start date of your insurance. You don’t want to be stuck in a claim that your policy doesn’t cover.
The most common mistake that many attorneys end up doing is taking a case before their insurance policy start date. This opens the risk of legal malpractice claims and if a claim pops up, your insurer will point out that it falls outside the coverage period for your policy.
5. The cost of legal malpractice insurance
Cost is an important factor to consider while choosing a legal malpractice insurance. The cost of legal professional liability insurance can vary greatly from provider to provider. Every law firm has a different requirement for lawyer malpractice insurance. No two firms will pay the same amount for malpractice insurance.
Make sure you educate yourself about the cost of insurance and additional charges (if any) that are included in your policy. While calculating your law firm insurance amount, you will need to consider different factors, such as the law practice area, number of attorneys in the firm, location of firm, claim history, total working hours of the firm, and more.
6. Be ready to handle malpractice claims the firm
If any situation arises where a client files a complaint for malpractice, the first thing that you should do is notify your malpractice insurance provider. Once you notify your insurer for the claim, they will guide you on how to proceed with the same. You should be ready to handle all kinds of claims. If possible, you can also coordinate with the client and see how you can avoid claims, but in any case, you should be prepared.
Where to Buy Legal Malpractice Insurance?
If you are wondering from where you can get legal malpractice insurance for your law firm. Here is the list of some of the most trusted sources for the same:
Embroker: Embroker provider legal professional liability insurance to lawyers and firms. The application process is simple and smooth. You can simply apply for it online. They offer insurance in various different states.
LAWPRO: LAWPRO is a popular provider of legal malpractice insurance. They have authorization for providing the legal coverage against claims. You can simply go to their website and check what they cover and how to apply.
AXA: AXA is a popular name among Virginia’s firms. They are on the list of best providers and compete fiercely for good risk covers. If you are practicing in Virginia, you can consider them.
CPH Insurance: CPH is another trustable provider of attorney malpractice insurance. Their application process is simple; you can directly apply online for the insurance. The best part about CPH insurance is that they put their clients first.
Lawyers Insurance Group: The Lawyers insurance group is also a reliable source to get your firm’s law malpractice insurance. They cover a wide variety of claims that you can check on the website. Currently, they are representing more than a dozen major insurers that cover Virginia firms.
Questions to Ask While Getting a Legal Malpractice Insurance
What legal services are covered in the policy?
Before buying the lawyer malpractice insurance, confirm that all the services that are provided by your firm are covered by the insurance provider. This can include a wide variety of services, such as a notary public, arbitrator, mediator, title insurance agent, etc.
What is the financial rating of the insurance carrier?
Always consider the ratings of your insurance carrier; don’t just go with their website. rating consider looking into independent rating companies such as A.M. Best and Standard & Poor’s. This will give you a clear picture about the provider’s services and customer experience.
Are there any provisions that will reduce the deductible amount owed?
There are various providers who offer you different ways of reducing deductibles. These ways can include a provision that cuts the deductible in half. This means your law firm can have some real savings in the event of a claim.
Does the carrier offer risk management services and tools that add value to their product?
Training staff and educating everyone in the firm can be costly and time consuming. So ask your provider if they offer these services without any additional charges and that can equate to substantial savings both now and in the future.
Remember that four out of five lawyers get sued for a malpractice case in their legal career. According to ABA stats, 70% of the claims are against the firms that have one to 5 lawyers only. The number is huge, which is why you should consider having legal malpractice insurance. In this guide, we have covered everything that you need to know about lawyer malpractice insurance and how you can purchase it. Make sure to do your research and check the available insurance provider in your state.
State-by-State Legal Malpractice Insurance Requirements
Every state has different requirements when it comes to lawyer malpractice insurance. Some states may not require lawyers to have malpractice insurance, while others necessitate it. Let’s explore the legal malpractice liability insurance requirements of different states.
Legal Malpractice Insurance Requirements in Alabama
In Alabama, professional liability insurance for lawyers is not required. For lawyers practicing in Alabama, having a license and adhering to state legal professional requirements is more important. Practicing lawyers should follow the legal responsibilities code. Additionally, lawyers and firms are required to have status on file with the Bar Association.
Legal Malpractice Insurance Requirements in Alaska
Legal professional liability insurance is not required in Alaska, just like Alabama. But still, attorneys are bound to inform their clients about attorney malpractice insurance in writing. Other than this lawyers and firms are also required to be part of the Alaska Bar Association. They are supposed to demonstrate good ethics, moral values, and obey all rules stated by the bar.
Legal Malpractice Insurance Requirements in Arizona
Arizona has no requirements regarding attorney professional liability insurance. Just the basic requirement that lawyers and firms need to fulfill is becoming a member of the state bar of association. Legal malpractice attorney Arizona needs to maintain good standing status with the state bar of association. Additionally, they also need to follow ethical, legal practice methods, rules and regulations stated by the bar association.
For more details on Legal Malpractice Insurance Requirements in other states such as California, Florida, New York, Texas, Georgia, Illinois, New Jersey (NJ), Michigan, Ohio, and more, please email us at: marketing@casefox.com