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The first fully digital lawyers’ professional liability insurance policy. From quote to purchase for your entire practice in 10 minutes.
How Much Does Attorney Malpractice Insurance Cost
Also known as lawyers’ professional liability or legal malpractice insurance, this is typically the most important insurance policy a lawyer or law firm can purchase. Legal malpractice claims occur when a lawyer is alleged to have failed to perform his duties in accordance with restrictive standards of professional and ethical conduct.
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Furthermore, even if such standards have not been breached, many consumers may see a negative legal consequence as sufficient reason to bring a malpractice suit against your firm.
It is an unfortunate fact of life that even the most diligent law firms are vulnerable to such costly claims. The potential exposures are numerous and include misinterpretations of the law, bad advice, missed deadlines or conflicts of interest.
Given how common legal malpractice lawsuits have become, having the right insurance program is a worthwhile investment for any law firm.
All lawyers need legal malpractice insurance, even if they hope to never have to use it. 80% of lawyers get sued at some point in their careers, and you don’t want to face a lawsuit without legal malpractice insurance. However, certain areas of practice carry significantly higher risk.
Lawyers Need Insurance Too: Legal Malpractice Insurance
Attorneys practicing in intellectual property, loan modification, trust and personal injury cases are considered higher risk by underwriters.
Working with trusts and estates always involves sensitive and personal matters, which leaves lawyers practicing in these areas open to legal malpractice claims from disgruntled family members and non-client beneficiaries.
Additionally, while malpractice claims are subject to statutes of limitations in most jurisdictions, many have an exception that specifically applies to trust and estate attorneys. (The statute of limitations is extended till the death of the original subscriber).
Personal injury cases run the risk of missing deadlines or “failure to calendar”. Additionally, customers often have highly unrealistic expectations about the potential payments they will receive.
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Loan modification attorneys typically work with a very large number of clients. This fact, coupled with strict government regulations, means they are at significantly higher risk of being sued for alleged wrongdoing.
He knows your time is valuable, which is why you can get your legal malpractice insurance quote with us in under 10 minutes by telling us more about your business.
The legal profession is highly regulated, and there are clear professional standards and expectations that all lawyers must adhere to. If a client loses their case and feels that their legal representative failed to meet those standards, they can take legal action and allege that they were the victims of legal malpractice.
If the client proves malpractice and wins, the lawyer will be required to pay them all potential funds they would have received had they won the original case. However, even if the allegations are completely unfounded, just dealing with the claim can consume a lot of time and money.
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In the event of a costly lawsuit, the damages could easily lead to the bankruptcy of your firm. Legal malpractice insurance excludes that possibility by covering both the costs of legal defense and potential damages.
Because of this, one can never be too cautious when dealing with potential legal malpractice claims. Investing in lawyers’ professional liability insurance is always a good idea, should you ever find yourself on the wrong side of a lawsuit.
Even the most comprehensive legal malpractice policy has clearly defined limits on what it will cover. At its core, legal malpractice insurance will protect your firm from mistakes and errors that occur in the course of providing professional services.
This policy will cover the firm as well as individual lawyers. It will cover legal defense costs associated with a malpractice lawsuit, as well as damages and settlements potentially awarded against your firm. A preferred policy will also provide legal defense in cases of fines and penalties alleged against your firm.
How Much Will Your Legal Malpractice Insurance Cost?
However, it is important to note that if the claim arises out of criminal, malicious or fraudulent acts, your firm will not be covered by any legal malpractice insurance policy. Additionally, most policies have an Insured Vs. There will also be an insured exclusion, meaning the policy will not respond to a claim or lawsuit between lawyers who work for both insurance companies.
Legal professional liability will only provide insurance coverage for your firm in its legal capacity. This means that board members, business partners or lawyers occupying other roles will not be covered for their errors and omissions, which is why it is also a good idea to check directors and officers insurance.
Employment-related lawsuits related to discrimination, harassment, failure to promote, and wrongful termination are covered by Employment Practices Liability Insurance (EPLI) and therefore do not fall within the scope of legal malpractice coverage.
Legal malpractice policies will generally exclude claims arising out of bodily injury and property damage, as these claims are usually covered by general liability insurance. An important aspect to note is that breach of fiduciary duty will also be excluded from a legal professional liability policy.
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Also, any claim where the insured firm was aware of a potential claim but did not disclose this information before the policy took effect will not be covered.
One of the main questions regarding attorney malpractice insurance is that there are many different factors that go into determining the premium a law practice will have to pay to secure the right attorney professional liability insurance.
Let’s break down the factors that play a role in determining the cost of your legal professional liability insurance:
One of the determining factors that will determine your premium is the size of the firm, particularly the number of lawyers it employs.
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The length of time each attorney has been with the firm will affect the cost of legal malpractice insurance. This is called a step rating, and insurance companies use it to measure potential exposure as lawyers handle more and more cases for the firm. A lawyer’s premium will be at its lowest during the first year with the firm and will reach full maturity in the sixth year.
Any claims your firm has had in the past will increase your premium. Keep in mind that insurers will not only look at the number of your claims but also at their severity and how much you were at fault in these claims.
Additionally, companies that have not had a single malpractice claim filed against them in the past five years are eligible for acceptable policies, which will generally reduce the cost of insurance.
Certain areas of practice have much greater risk associated with them. Lawyers working on potentially volatile cases involving securities, medical litigation, international law or intellectual property can expect to pay more to be adequately protected. If your company has different clients and areas of practice, insurance companies will consider all your cases while calculating the premium.
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Lawyers practicing in metropolitan areas such as New York or Los Angeles can expect to pay more for insurance than those located in less populated areas.
It is important to note that cheaper is not better when it comes to legal malpractice insurance coverage. Given the potentially crippling costs of malpractice claims, the most important thing is to make sure your insurance fully covers your practice activities.
Another important factor in determining the cost of insurance is the amount of time you have to spend in the process of getting the insurance. If the process takes weeks and occupies hours of your attention, it will directly affect your bottom line.
If you want to learn more about the specific factors that go into determining the cost of legal malpractice insurance check out our latest guide.
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As a digital company, the savings on unnecessary administration are passed on to you – for the most competitive legal professional liability insurance price you’ll find anywhere.
Protect your business with the broadest legal professional liability coverage in the industry. You can tailor policies as per your needs by choosing your own limits and deductibles.
We offer you expert support, no matter your question: contact us 24/7 by phone, email or live chat. You also get a personal account manager to take care of you and your insurance needs.
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A Bergen County jury returned a $343,258 verdict in a legal malpractice lawsuit alleging attorney Robert Lysiak failed to notify his client of potential environmental contamination on the property.
Revolaz, a Cleveland-based tech company, was awarded a $32,262,488.50 legal malpractice judgment against Dentons. In 2015, Dentons was disqualified from representing Revolase in a patent enforcement case, as The Gap, which was the defendant, raised the issue over the conflict.
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