As a lawyer or attorney, you know better than anyone what could be at stake if you or your employees make a mistake. No matter what area of law you practice in, you could be at risk to pay out thousands or even millions of dollars in legal fees that AREN’T going to you. Read our guide on legal malpractice insurance to learn how to keep your firm protected agains the unexpected.
What is legal malpractice insurance?
Legal malpractice insurance is a form of errors and omissions coverage specially tailored to the needs of law firms. This insurance protects your practice from dissatisfied clients or mistakes made by your employees. It is arguably one of the most important policies your firm can have in their risk management portfolio.
What does lawyers professional liability insurance cover?
What your policy covers will be specific to your carrier, but most legal malpractice policies cover:
- Errors and omissions made by your firm and employees
- Professional liability, including when attorneys act as public notaries, executors, trustees, title agents, and directors or officers
- Class action lawsuits
- Intellectual property including trademarks and patents
- Securities law
- Entertainment law
Do I need malpractice coverage for my legal practice?
While there is no federal regulation requiring law firms have malpractice coverage, requirements come from the state you practice in. Your state may have no requirement to carry insurance but will require you to disclose that you have no insurance. The bigger question is: are you willing to face the legal and financial consequences if your firm makes a mistake without coverage?
How much does attorney professional liability coverage cost?
The cost of your malpractice insurance depends on many different variables, but on average most attorneys can expect to pay as low as $300 or as high as $10,000 in premiums.
Your premium costs will be affected by:
- The size of your firm
- What area of law you practice in (securities law tends to be more expensive while criminal law is less expensive)
- Your firm’s practicing state
- Previous claims history
How much coverage do I need for my legal practice?
How much coverage you need depends on what area of the law you are practicing. For example, if you are in securities, real estate, or corporate law with the potential for substantial losses, you will need more coverage. These higher risk legal areas may need as much as $50 million in coverage to protect their firm.
I am an in-house counsel for a corporation. Do I need to have malpractice coverage?
In-house counsel can get a special type of coverage called “Employed Lawyers Coverage”. This coverage is meant for the legal staff employed by a company or corporation, including their paralegals and assistants. Depending on the policy, it may also cover pro bono and moonlighting work.
Your law firm prides itself on high quality work for every single one of your clients. So why wouldn’t you apply that same attention to detail to protecting yourself, your business, and your employees?
Don’t drop the ball before the goal; be sure you have the right coverage and enough of it to shield your practice from whatever comes your way.
The legal malpractice insurance advisors at JAISIN can review your current coverage and point out any potential weaknesses that could lead to disaster down the road. They will help you navigate the insurance market for optimal coverage without paying too much.