Attorney Malpractice Insurance
Although the job of an attorney is to facilitate the process of carrying out lawsuits and helping clients receive compensation for damages such as bodily injury or property damage, there are some cases in which lawyers are actually sued by their own clients. As an attorney it is your obligation to ensure that you are protected from frivolous lawsuits brought up by your clients by purchasing a comprehensive attorney malpractice insurance policy, which provides coverage in the event of unjust or unwarranted lawsuits against your law firm. Attorney malpractice, also known as legal malpractice, is an accusation made when a client feels that their attorney has not lived up to the promises and/or terms of a specific agreement or contract. For example, if an attorney fails to perform a designated task such as creating a proposal, then they could be sued for malpractice because of their negligence on the case. However, some clients have exceedingly high expectations for their attorneys, and when these expectations are not met they may attempt to reduce their lawyer expenses by suing their attorney for malpractice.
What to Look for in an Attorney Malpractice Insurance Plan
When comparing attorney malpractice insurance policies it is important to consider a diverse pool of grade A insurance companies that provide professional liability policies. As a solo practitioner, premiums for attorney malpractice insurance policies typically range from $1200 - $1500 per year, depending on the annual gross of each lawyer. On the other hand, a law firm that has 2 to 3 attorneys usually have premiums that start at about $3000 per year. Ideally, you'll want to deal with a company that has policies which provide coverage for part-time attorneys, and which offer coverage for legal defense costs and other extracurricular expenses associated with defending your firm from false allegations. In addition, you'll want to use an insurance company that provides professional advice from experienced specialists that will help you choose the most suitable coverage plan for your practice.
How Much Does Attorney Malpractice Insurance Cost?
The cost of attorney malpractice insurance policies will vary depending on a variety of factors, including but not limited to the type of policy selected, your area of legal practice and specialty, and even personal insurance claim history (which includes all of the attorneys within the firm). The premium of an insurance policy will also depending on the amount of the deductible that you are willing to pay. In addition, attorney malpractice insurance policy rates differ depending on litigation within your jurisdiction and the specific laws of your state. Although larger law firms have to pay for insurance for more attorneys, insurance providers usually offer premium discounts for larger companies. It is also possible to receive reduced premiums if your firm utilizes a data control system that proactively prevents malpractice.
How to Prevent Gaps in Coverage
Any client can decide to sue their lawyer for malpractice at any time for a plethora of reasons, so preventing gaps in coverage is crucial for keeping your firm financially safe. One of the best ways to prevent gaps in coverage is to utilize 'prior acts' coverage and 'tail' coverage, which are clauses that provide coverage for incidences reported after the policy expiration date, or for damages that occurred before the effective date of the insurance policy. Attorneys are given 30 days to purchase tail coverage for their policy after it expires (tail coverage is also commonly referred to as the extended reporting period or ERP). It is also extremely important to ensure that all new attorneys hired by your firm have their own policy, and to inquire whether or not your policy will assume the liability of the acts of any new employees.