Legal & Justice Blog

Most people immediately think of doctors when they think of malpractice insurance. It is true that those in the medical profession must have insurance and that they pay dearly for it. Other professions also benefit from insurance, however, and some are required to carry it in many states. The legal field is one such profession. All attorneys should carry legal malpractice insurance.

Lawyers are a high-risk group for liability and malpractice claims. Any offended client might decide to sue for perceived bad advice. Attorneys who don’t have a legal liability insurance policy are risking their practice, their wealth and their family’s well-being. If a lawyer is sued for malpractice and doesn’t have insurance, he or she will have to bear the full cost of defending the suit and paying any damages that are awarded to the plaintiff. Many professionals have had their careers destroyed and been financially ruined, all for want of a simple insurance policy.

Lawyers professional liability insurance indemnifies the insured person against such claims. A good policy will pay for the cost of defending the lawsuit and will cover any damages that may be awarded if the suit is lost. No other form of insurance will cover these claims. General liability policies and homeowner’s insurance are limited to bodily injury and property damage. In fact, most of those policies specifically exclude claims arising from professional practice.

Malpractice insurance only covers claims of liability. It will not cover criminal prosecutions. In addition, most policies will not cover slander, libel, intellectual property, breach of contract, breach of warranty, cost of contract or personal injury. These issues can often be covered by a rider on the original policy.

Legal malpractice insurance is a claims-made form of insurance. It covers claims made against incidents that happen during the time period in which the policy is in effect. Such an incident will usually be covered up to the time when the statute of limitations runs out, even if the insurance lapses before then. A claim which arises from an incident that happens before the policy goes into effect or after it lapses will not be covered.

The cost of legal liability insurance varies considerably depending on the chosen liability limits, the deductible and the claims history of each attorney that will be covered by the policy. Other factors that affect the cost include the size of the firm and its geographic location.