A Guide to Legal Malpractice Insurance Cost & Coverage by Daigle & Travers, Darien, Connecticut (203) 655-6974
Lawyers are subject to malpractice, liability and property lawsuits much as medical professionals and businesses are. It would be an understatement to say that the U.S. is in a frenzied climate of litigation; attorneys and law firms are not precluded from the propensity to end up on the defense side of a lawsuit. Depending on the area of law that you work in, you or your firm may find yourself more open to exposure inclined towards claims. Being prepared with proper coverage can protect your assets from being drained if you or your firm get tangled in a lengthy court proceeding.
Every law office should have a business owners’ policy (BOP) which includes the basic coverage that all companies need – commercial property, business income and general liability. BOP covers things like: damage to property, furniture, equipment, if someone gets hurt on premises, lost wages if property damage is preventing business for operating. What’s not covered (among other things) is protection from claims against the professional services you provide. For this, you will want to have legal malpractice insurance.
What does attorney malpractice insurance do?
Legal malpractice insurance is a form of professional liability also known as errors and omissions (E&O) insurance. This type of insurance is specifically designed to cover lawyers and law firms from claims of inadequate or negligent work or when a client claims that the services rendered (or failed to render) did not have the expected results. Legal malpractice insurance may also cover the supplementary services that are provided such as a hired title agent or notary public.
Do lawyers have to have legal malpractice insurance?
Most states do not require attorneys and legal professionals to have legal malpractice insurance coverage, but in many of those states this lack of coverage has to be disclosed to the client. An attorney as well as other legal professionals (paralegals, legal assistants, arbitrators, mediators, expert witnesses, clerical staff, independent contractors) should inquire with their employing firm if they should purchase coverage for malpractice or if they are covered under a company policy. Without professional liability coverage, an attorney or firm could be bankrupted by the expenses accumulated during drawn out class-action suits, lawsuits filed by regulation agencies or other attorneys.
How much does lawyers professional liability insurance cost?
The scale and needs of any legal practice is going to vary, greatly affecting the eligibility and cost of insurance. The average cost is $5,000 – $10,000 but may be significantly more or less depending on the size of the practice, the litigation climate of where you practice, the disciplinary and malpractice history of a firm and its staff, the amount of coverage and size of deductible as well as which area of law is practiced. For instance, a medical malpractice attorney is more likely to get sued than an estate attorney.
What is a claims-made policy of insurance?
Claims-made coverage is a policy that covers any claims made during the period that the policy is in effect regardless if the event occurred before or during the policy term. If there is a retroactive date noted, then only events that occur on or after that date will be covered. If the policy cancels and a claim is subsequently made, it will not be covered unless a tail policy is added.
What is occurrence coverage?
Occurrence coverage takes care of any claims for events that occur during the period of coverage even if the claim is made after the policy term ends.
What is tail insurance for legal malpractice?
A tail insurance policy is an add on to extend the time that a claim will be covered (up to the terms of the policy). This policy covers claims for events that happened while the policy was active but were not filed until the policy has terminated. A lawyer had claims-made coverage and is taking time off, changing companies or retiring may especially want a tail insurance policy to cover any future claims that arise.
Ask your agent if you need these additional coverages or if they are already included in a package you have:
- Business Interruption
- Commercial Auto
- Cyber Liability
- Data Breach
- Directors and Officers
- Employee Benefits Liability
- Employee Dishonesty Coverage
- Employee Practices Liability
- Utility Services Coverage
- Valuable Papers and Records
- Workers’ Compensation
What should ask your insurance agent about your lawyers professional liability insurance?
- Is my coverage limited by exclusions included in my policy?
- Does my firm’s insurance extend coverage to previous and future attorneys? Other staff?
- Does my policy have claims-made or occurrence coverage?
- What legal services are covered in my policy? And can I choose my own counsel?
- Will my policy cover my pro bono work?
Other Important Information
- If your policy states specific staff in your firm to be covered, notify your agent as changes are made.
- Legal profession insurance will not usually cover suits involving two clients of the same firm, criminal acts or services that were supplied by another business owned by the insured firm.
- In-house counsel may need employed-lawyers-coverage separate from the corporation or law firm they work with.
Why settle for less?
If you find your current insurance policy is unable to offer you the insurance you need for your law practice, it is time to find a new agent. Read over your policy carefully. Spend time comparing all the aspects, not just the price of an insurance policy, and make sure it will give you the coverage you need in the event that a lawsuit is brought against you.
Get the coverage you need.
Daigle and Travers is based in beautiful Darien, nestled between Stamford, Norwalk, and New Canaan. We also serve Fairfield County, Greenwich, Weston, Westport, Wilton, Ridgefield, Redding, Easton, Fairfield, Southport, Trumbull & parts of Westchester County and Long Island.
We offer insurance for a variety of legal professionals including lawyers, paralegals, legal assistants, arbitrators, mediators, expert witnesses, in-house counsel, law firms and attorneys with private law practices.
Daigle and Travers will provide you with the right coverage to make sure your investments are safe during a disaster. When partnering with us, we will give you all the necessary information and options you need to make the best choice of insurance company and policy. Give us a call today at (203)-655-6974.