Protecting Your Law Practice: Why Attorneys Need Professional Liability Insurance
What is Professional Liability Insurance for Attorneys?
Professional liability insurance for attorneys, also known as legal malpractice insurance or lawyers professional indemnity, provides protection for attorneys against claims that they failed to provide adequate legal services. This type of insurance, sometimes called attorneys errors and omissions (E&O) insurance or lawyers E&O coverage, covers defense costs and damages awarded in a legal malpractice lawsuit.
Why Do Attorneys Need Liability Insurance?
Like doctors and other professionals, attorneys may be sued by their clients for alleged mistakes or inadequate representation.
Even the most careful attorney can face accusations of malpractice.
A professional liability insurance policy provides lawyer liability protection by paying the often substantial legal fees and settlements or awards related to such claims. Every practicing attorney needs attorney professional liability coverage.
What Does the Policy Cover?
A standard lawyers PI insurance policy covers:
- Legal malpractice
- Breach of fiduciary duty
- Negligent advice
- Failure to adequately prepare a case
- Missed deadlines (statutes of limitations)
- Minor administrative errors
Policies can also cover related expenses like defending against state ethics violations.
What is Typically Excluded?
Attorney professional liability policies do not cover:
- Intentional illegal or unethical acts
- Dishonesty or fraud
- Refusal to pay taxes
- Punitive fines or penalties
Other Policy Features
Policies have liability limits, deductibles, and claims-made stipulations. Claims-made means the policy covers claims first filed while your policy is in effect, even for past services. Therefore, maintaining continuous coverage is essential. Most malpractice policies also pay defense costs related to a claim in addition to the liability limit. Defense expenses do not reduce what the insurer pays to resolve a claim.
What Affects Premiums?
As with other insurance, many factors determine lawyers professional indemnity premiums, including:
- Years in practice
- Firm size
- Practice areas
- Revenue
- State and location
- Claims history
- Desired coverage limit and features
Shopping around can help find the most suitable attorney malpractice insurance at the best rate. An independent broker has access to multiple markets.
Protect Your Livelihood
Accusations of mistakes and omissions could seriously impact your firm. Carrying the right professional liability insurance for attorneys policy helps safeguard your practice. Consult an attorney specializing in lawyers’ malpractice coverage to ensure your policy meets state requirements and suits your practice needs.